* Re: [bitcoin-dev] Question about PayJoin effectiveness
2020-06-10 4:01 [bitcoin-dev] Question about PayJoin effectiveness Mr. Lee Chiffre
@ 2020-06-10 6:29 ` ZmnSCPxj
2020-06-10 6:47 ` ZmnSCPxj
2020-06-10 17:49 ` Chris Belcher
1 sibling, 1 reply; 4+ messages in thread
From: ZmnSCPxj @ 2020-06-10 6:29 UTC (permalink / raw)
To: Mr. Lee Chiffre, Bitcoin Protocol Discussion
Good morning Mr. Lee,
> I am trying to learn about payjoin. I have a couple concerns on its
> effectiveness. Are my concerns valid or am I missing something?
>
> concern 1
> If it is known to be a payjoin transaction anyone could determine the
> sender the recipient and amount right?
>
> Lets assume that everyone has a single utxo because payjoin becomes common
> use and payjoin consolidates utxos through "snowballing". If Alice has a
> UTXO of 0.05 btc and Bob has a UTXO of 1.15 btc. Bob can be assumed to
> have more balance because he is a merchant and his customers payjoin him
> payments alot.
>
> If Alice and Bob do a payjoin with Alice paying 0.01 btc to Bob, it would
> probably look like this right?
>
> 0.05---> |____---->1.16
> 1.15---> | ---->0.04
There are multiple interpretations:
* The 0.05 owner is paying the 1.15 owner 0.01 BTC.
* The 1.15 owner is paying the 0.05 owner 1.11 BTC.
* The 0.05 + 1.15 owner is paying an independent user 1.16 BTC using a non-PayJoin transaction (because for example the payee currently has no coins, i.e. a new user).
It is this fact of multiple interpretations that is what PayJoin buys you in practice.
You could argue that paying 0.01 is more likely than paying 1.11 or 1.16, but that still does not give you 100% assurance --- the creators of the transaction are still getting the `100% - probability_of_paying_0.01` benefit, and reducing UTXO set size as well.
Your assertion that this is "very obvious" only exists because you already know that Alice is paying 0.01 to Bob, but that is in fact the very thing that is being obscured here.
>
> It is very obvious here the amount sent and the sender. Even if Alice did
> combine another input it would still be very obvious. In this case Alice
> has another utxo with 0.4 BTC
>
> 0.40---> |
> 0.05---> |____---->1.16
> 1.15---> | ---->0.44
This can be interpreted as well multiple ways:
* 0.05 + 1.15 is the same owner who wants to merge coins, and is paying the 0.40 owner 0.04 BTC.
* 0.40 + 1.15 is the same owner who wants to merge coins, and is paying the 0.05 owner 0.39 BTC.
* 0.40 + 0.05 is the same owner who wants to merge coins, and is paying the 1.15 owner 0.01 BTC.
You should probably be shuffling the inputs and outputs, or using BIP39 consistently, so that inputs and outputs do not correlate (i.e. do not necessarily group together all of Alice inputs).
>
> This is still obvious that Alice paid Bob 0.01 BTC isn't it?
>
> concern 2
> If there is just one consolidated utxo after each payjoin, would it be
> easy to break the privacy of transaction chains?
>
> Alice---payjoin--->Bob
> Clark---payjoin--->Bob
>
> or
>
> Alice---payjoin--->Bob---payjoin--->Clark
>
> For exmaple, lets say that Alice payjoins to Bob. Then later on Clark
> payjoins with Bob. Based on the payjoin between Clark and Bob, Clark now
> knows what UTXO was actually Bob's. And can then know which one was
> actually Alices. By transacting a payjoin with someone, they could decloak
> the payjoins before them right? If so, how far back the chain can they go?
>
> The issue is not that someone knows the utxos of themselves and the entity
> they payjoined with. The issue is that someone can figure out the payjoins
> of others before them with the same entity.
If Clark can hack Alice (even just read-only access to Alice logs), they can go by one more transaction.
If Clark cannot hack Alice, then that is the sole extent Clark knows: Clark know that Bob transacted with somebody for a resulting N BTC (which is relatively uninteresting, obviously somebody who uses BTC is going to be transacting with random BTC users in BTC), without being sure that Bob was the payer or the payee in that situation.
Regards,
ZmnSCPxj
^ permalink raw reply [flat|nested] 4+ messages in thread
* Re: [bitcoin-dev] Question about PayJoin effectiveness
2020-06-10 4:01 [bitcoin-dev] Question about PayJoin effectiveness Mr. Lee Chiffre
2020-06-10 6:29 ` ZmnSCPxj
@ 2020-06-10 17:49 ` Chris Belcher
1 sibling, 0 replies; 4+ messages in thread
From: Chris Belcher @ 2020-06-10 17:49 UTC (permalink / raw)
To: bitcoin-dev
On 10/06/2020 05:01, Mr. Lee Chiffre via bitcoin-dev wrote:
> I am trying to learn about payjoin. I have a couple concerns on its
> effectiveness. Are my concerns valid or am I missing something?
>
> concern 1
> If it is known to be a payjoin transaction anyone could determine the
> sender the recipient and amount right?
>
> Lets assume that everyone has a single utxo because payjoin becomes common
> use and payjoin consolidates utxos through "snowballing". If Alice has a
> UTXO of 0.05 btc and Bob has a UTXO of 1.15 btc. Bob can be assumed to
> have more balance because he is a merchant and his customers payjoin him
> payments alot.
>
> If Alice and Bob do a payjoin with Alice paying 0.01 btc to Bob, it would
> probably look like this right?
>
> 0.05---> |____---->1.16
> 1.15---> | ---->0.04
>
> It is very obvious here the amount sent and the sender. Even if Alice did
> combine another input it would still be very obvious. In this case Alice
> has another utxo with 0.4 BTC
>
> 0.40---> |
> 0.05---> |____---->1.16
> 1.15---> | ---->0.44
>
> This is still obvious that Alice paid Bob 0.01 BTC isn't it?
>
>
>
> concern 2
> If there is just one consolidated utxo after each payjoin, would it be
> easy to break the privacy of transaction chains?
>
> Alice---payjoin--->Bob
> Clark---payjoin--->Bob
>
> or
>
> Alice---payjoin--->Bob---payjoin--->Clark
>
> For exmaple, lets say that Alice payjoins to Bob. Then later on Clark
> payjoins with Bob. Based on the payjoin between Clark and Bob, Clark now
> knows what UTXO was actually Bob's. And can then know which one was
> actually Alices. By transacting a payjoin with someone, they could decloak
> the payjoins before them right? If so, how far back the chain can they go?
>
> The issue is not that someone knows the utxos of themselves and the entity
> they payjoined with. The issue is that someone can figure out the payjoins
> of others before them with the same entity.
>
>
> I surely must be missing something here. What am I not understanding?
>
Adding to what other people have written, it's an important point that
PayJoin breaks the common-input-ownership heuristic. I.E. if PayJoins
become even moderately popular then it will no longer be a safe
assumption that all the inputs to a transaction are owned by the same
entity (taking away all the obvious breaks like equal-output-coinjoins).
This assumption is a huge reason why blockchain surveillance is so
effective. A good paper on that is here:
https://arxiv.org/abs/1605.06369 (The Unreasonable Effectiveness of
Address Clustering Harrigan, Martin & Fretter, Christoph. (2016))
The assumption is mentioned by Satoshi in the whitepaper where he
laments that the privacy loss is unavoidable. (One of the few outright
errors in the paper, perhaps the only error). The fact that we have
technology to break this assumption is a massive deal, and that's a big
value-add of PayJoin.
^ permalink raw reply [flat|nested] 4+ messages in thread