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Combined summary - Privately sending payments while offline with BOLT12

Combined summary - Privately sending payments while offline with BOLT12

Exploring the realm of digital payment security and efficiency, several innovative approaches and proposals have emerged.

The GitHub repository LNURL-withdrawPOS introduces an open-source reference for Point Of Sale (POS) devices to process LNURL-withdraw links via NFC. However, a more secure and dynamic solution has been identified in the form of Bolt Card, employing deterministic rolling withdrawal URIs alongside a special NFC chip, addressing the inherent insecurity of static LNURL withdrawal links.

Further advancements are evident in the bLIP-0028: Paratonnerre proposal, which ambitiously seeks to integrate remote nodes with hardware wallets such as Ledger or Coldcard. This initiative is part of a broader effort to standardize control messages within the Bitcoin Lightning Improvement Proposal framework, aiming to significantly enhance cryptocurrency management and security. The proposal emphasizes the importance of establishing a secure communication protocol between remote controls and high-uptime home nodes through BOLT8, thereby increasing the security and user-friendliness for node interaction remotely.

The differentiation between custodial and non-custodial Liquidity Service Providers (LSPs) underlines a critical decision-making factor for users prioritizing either convenience or control. Custodial LSPs offer streamlined transactions at the expense of user autonomy, while non-custodial services align more closely with blockchain's decentralized ethos by allowing users complete control over their assets. This distinction highlights the inherent trade-offs between ease of use and sovereign asset management.

Innovations in payment facilitation propose encrypted data transfer through onion-message paths, enhancing transaction security and efficiency. This approach allows for secure message transmission, like update_add_htlc, across onion-message paths instead of the conventional BOLT8 tunnel. The proposed standards aim to accommodate various user scenarios, from operating through a mobile phone connected to an LSP to managing transactions via a high-uptime home node, emphasizing versatility and user security.

A novel payment authorization method enables secure transactions at points of sale without requiring the buyer's device to be internet-connected. By pre-computing identifiers and secret keys on a home node, transactions can proceed smoothly through NFC or QR code interactions between the buyer's and seller's devices. This method eliminates the need for online presence during transactions, maintains sender privacy, and suggests a shift towards integrating such systems into smart cards. A suggested adjustment to BOLT12 aims to verify that the received invoice matches the authorized invoice request, enhancing trust and reducing computational demands on nodes. This system presents a more secure alternative to existing methods, like those offered by LNURL-withdrawPOS, by ensuring the scalability and security of offline payment processes.

Discussion History

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andyschroder Original Post
September 14, 2024 07:01 UTC
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September 14, 2024 11:30 UTC
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November 10, 2024 19:32 UTC