On 06/19/2013 03:29 PM, Jeremy Spilman wrote:
If you have two parties who want to form a persistent relationship, by exchanging and verifying public keys beforehand, then I think the canonical way to do this with BIP32 is for the parties to exchange PubKey and *ChainCode*.
 
I don’t understand the use case for handing out individual multipliers, if what you desire is a persistent relationship. If each party dedicates a child-wallet for receiving coins, and saves a PubKey/ChainCode for sending coins, the two parties can transaction securely forever without ever exchanging any more information, and without any address reuse.
 
I think ideally, the default behavior is that wallets always dedicate a new child node {PubKey, ChainCode} to each party they transact with. At the presentation layer, you have a “contact” and each contact has a transaction history. You can send coins to a contact at any time, and internally the wallet picks the next address in their sequence. Any funds received on pubkeys from contact’s sequence are attributed to that contact. The wallet can organize the contacts, and roll-up the transaction history into ‘ledgers’ and ‘balances’ however they want – it could be based on the underlying BIP32 hierarchy or perhaps not. The cost of watching large a number of pubkeys, even if you ‘look ahead’ 100 pubkeys for each contact, is relatively small versus the benefits.
 


What you just described is complimentary to what I am proposing.  There is nothing stopping you from doing it that way, except that it may be inconvenient in some circumstances.  BIP 32 does not prescribe a way to use multiple chains like you described with the convenient type-2 derivation (though we could create a variant that does).  And all separate chains with their 100-address look-aheads may be fine for your desktop or mobile device, but maybe not a HW signing device with 128 kB of memory. 

So, some use cases might prefer having a different parent public key [and chaincode] per contact, some may prefer to synchronize across many contacts.  For instance, maybe there's a benefit to using the same parent pubkey across multiple services, as a form of identity.   If I don't want that, I use your method.  If I do want that, I use my method.  Given its simplicity, I don't know why both can't be options.

Actually, it doesn't have to be specific to the payment protocol, it can just be alternative address encoding that some apps would use if they have a need for it.

-Alan