bitcoin-dev

Redefine packages to discourage address reuse

Original Postby /dev /fd0

Posted on: October 20, 2024 06:19 UTC

Address re-use in Bitcoin transactions poses a significant privacy risk, impacting all parties involved in the transaction.

A proposed strategy to mitigate this issue involves modifying the mempool policy to reject transactions that reuse addresses. However, this approach alone may not be effective. Instead, redefining package transactions offers a more promising solution. According to BIP 331, packages are conceptualized as a list of unconfirmed transactions organized in a Directed Acyclic Graph format, where each transaction is connected based on the output it spends from another transaction within the package.

Implementing this new definition would mean that transactions involving address reuse would not be eligible for package relay by nodes employing the SENDPACKAGES P2P message protocol. This adjustment could significantly enhance privacy by limiting address re-use without fundamentally altering the core operational dynamics of Bitcoin transactions. Nonetheless, this proposition is not without its challenges. One notable concern is the increased scanning time required to identify address reuse among transactions. This raises questions about the feasibility and efficiency of such checks, suggesting that a compromise, such as limiting address reuse verification to only those transactions within the same chain, might be necessary.

The potential reluctance of BIP authors to amend the current standards and the necessity of incorporating these changes into Bitcoin Core for effective implementation also present hurdles. These factors underscore the complexity of addressing privacy concerns within Bitcoin transactions and highlight the need for continued discussion and innovation within the developer community.