This protocol introduces the use of a distinct invreq_payer_id for each contact, a method that significantly improves domain separation. By segregating keys used for communication with different nodes, the protocol effectively reduces the risks associated with privacy breaches and security threats, especially considering these keys' role in cryptographic signatures.

The discourse further explores augmenting user experience in digital payments, specifically through the introduction of an optional text field to denote the sender's identity in transactions (e.g., from: Alice). Drawing parallels with Ocean's implementation in Bolt12 methods, which aids in identifying payer details and combating spam without cumbersome verification processes, this approach suggests potential benefits in simplicity and functionality. Moreover, it contemplates allowing users to selectively reveal their identities to trusted contacts using a contact_key, thus maintaining privacy while ensuring transparency among trusted parties. However, concerns are raised about the complexity and management of per-contact invreq_payer_id, questioning the necessity versus its privacy advantages.

The conversation also delves into the vulnerabilities and design considerations in cryptocurrency wallets, particularly around managing contacts and payment codes. A hypothetical scenario illustrates the risk of deceptive practices, such as associating a malicious key with a trusted contact's name, underscoring the importance of clear and secure wallet designs to prevent such fraud. The dialogue touches on the implications of compromised contact keys, highlighting the need for effective user education on security practices and the potential flexibility offered by supporting multiple keys or offers for a single contact.

Addressing phishing attacks within payment systems reveals the criticality of educating users to trust only the payment amount, rather than the apparent source of the payment. This section discusses the potential risks posed by attackers manipulating contact addition processes and the consequences of compromised contact keys, stressing a more straightforward and possibly more secure approach of focusing user attention solely on the payment amount.

In exploring the use of a payer_note field and the absence of mutual authentication, the discussion underscores the challenges in distinguishing trustworthy communications from phishing attempts. Proposing wallets to default payment notes as "untrusted" aims at cautioning users against unverified messages, emphasizing the need for clear indicators of reliability in payment-related communications.

Lastly, the inquiry into employing cryptographic methods for mutual authentication during financial exchanges underscores the delicate balance between convenience and security. While identifying the sender in transactions could be beneficial in specific contexts, such as making payments on behalf of others, it also raises security concerns regarding the potential for impersonation. This nuanced perspective highlights the ongoing challenge of designing payment systems that cater to diverse needs for authentication and representation, alongside maintaining privacy and security standards.

The evolving discussion reflects a concerted effort to refine digital payment protocols, such as Bolt 12, to enhance user experiences without compromising on privacy or security. Feedback from developers and implementers is sought to fine-tune the proposed methods for enabling selective identity revelation, aiming at creating a standard that balances user experience, privacy, and security in the realm of digital transactions.