BIP352: PSBT support

The conversation primarily centers on identifying and addressing the gaps present in current specifications, such as BIP 370 (PSBTv2), BIP 371 (Taproot PSBT fields), BIP 340 (Schnorr signatures), and BIP 373 (MuSig2 PSBT Fields), with an emphasis on crafting a viable method to sign transactions involving silent payments. One proposed solution involves the introduction of a new PSBT field, which arises from limitations associated with utilizing existing PSBT_IN_PROPRIETARY types. These limitations include brittleness and the necessity for exact synchronization across differing implementations, which are seen as significant hurdles under the current BIP 352 specification that does not adequately cater to the nuances of silent payment transactions.

Further exploration into the technical aspects of this integration delves into the potential use of the PSBT_IN_TAP_MERKLE_ROOT field, given its conceptual alignment with the mechanics required for silent payment tweaking. However, challenges emerge due to the specific tagged hash (TapTweak) employed in taproot tweaking, which does not align with the hashing requirements for silent payments. A theoretical adjustment to the hash tag could permit interoperability without undermining the security or verification processes central to taproot trees and silent payments. Nonetheless, such adjustments would necessitate revisions to BIP 352, raising questions about the feasibility of these changes within the existing framework.

The dialogue also raises intriguing questions regarding the initial design considerations behind the PSBT_IN_TAP_MERKLE_ROOT, particularly why it wasn't engineered to directly incorporate taproot tweaks. This oversight complicates the inclusion of silent payment tweaks within the PSBT structure and suggests that a more inclusive approach to raw tweaks might benefit a broader range of applications without requiring an intermediate tagged hash step. Additionally, discussions touch upon a practical method for incorporating spend public keys into the PSBT through modifications that could potentially negate the need for adding new fields or encoding extra data. By possibly adjusting the spend public keys to fit within the PSBT_IN_TAP_INTERNAL_KEY field, albeit with minor alterations such as omitting the first byte, there's a proposition to streamline compatibility and maintain integrity during the transaction signing phase.

This complex narrative underscores the intricacies involved in refining PSBT standards to support silent payments, indicating that ongoing collaboration and innovation are essential. The development of a BIP Draft, aimed at introducing a PSBT_IN_SP_TWEAK field specifically for spending silent payment outputs, represents a significant stride towards resolving these challenges. The draft, along with a call for feedback through platforms like GitHub and bitcoin-dev mailing lists, signifies a collective effort towards enhancing the privacy and security frameworks of cryptocurrency transactions.