Subject: Re: [bitcoin-dev] Multisig Enhanced Privacy Scheme

From: "David A. Harding" <[email-masked]>
Date: Sat, 24 Jul 2021 18:49:24 -1000

On Tue, Jul 20, 2021 at 07:44:19PM +0000, Michael Flaxman via bitcoin-dev wrote:
> I've been working on ways to prevent privacy leaks in multisig
> quorums, and have come up with a creative use of BIP32 paths.

It seems to me like it would be rare for an attacker to obtain a private
BIP32 seed but not simultaneously learn what HD paths it's being used with.
I assume basically everyone is storing their descriptors (or descriptor
equivalents) alongside their seeds; doing so helps ensure a robust
recovery.

However, to the degree that privacy from seed thieves is a problem we
want to solve, I think it's largely fixed by using taproot with
multisignatures and threshold signatures.  As long as participants
aren't reusing the same keys in different contexts, it shouldn't be
possible for a third party who doesn't know all involved pubkeys to
determine that any particular aggregated pubkey contained material from
a certain base pubkey.

I would suggest that it's probably more beneficial for wallet authors to
work on implementing support for taproot and MuSig or MuSig2 than
support for this scheme, although maybe I'm misunderstanding this
scheme's motivation.

-Dave