Subject: [Bitcoin-development] Payment ID #'s for Stealth Addresses

From: Peter Todd <[email-masked]>
Date: Wed, 6 Aug 2014 23:33:09 +0000

Real-world experience with stealth address implementations used by
Cryptonote/Monero/etc. have shown that being able to attach a number of
some kind to each stealth-sent txout is valuable. For instance an
exchange with many customers can use such #'s to disambiguate payments
and credit the correct customer's account. Similarly an informal
person-to-person transaction can attach a number short enough to be
communicated verbally or on paper. Finally multiple payments with the
same ID # can be merged together in wallet UI's, allowing
merge-avoidance to be conveniently used with stealth addresses.

To avoid accidental collision such payment #'s should be at least
64-bits; to avoid privacy loss the encoded size should be the same for
all users. Thus we pick 64-bits or 8-bytes. In addition for the purposes
of CoinJoin and multiple outputs it would be desirable for all
stealth-using outputs the option of sharing a single 33-byte ephemeral
pubkey. Thus our OP_RETURN output becomes:

    OP_RETURN <ephemeral pubkey> <payment ID 1> {<ID 2> ... <ID n>}

Of course, this can't be accomodated within the existing 40-byte, one
OP_RETURN per tx, IsStandard() rules, something which is already causing
issues w/ Dark Wallet when users try to send to multiple stealth
addresses at once, and when multiple stealth sends are CoinJoin'd
together.

1) "Merge avoidance", Dec 11th 2013, Mike Hearn,
    https://medium.com/@octskyward/merge-avoidance-7f95a386692f