Silent Payments (BIP352)

What are Silent Payments?

Silent Payments provide privacy-preserving static addresses for Bitcoin. Traditionally, if you post a single Bitcoin address (e.g., for donations), everyone can see every transaction sent to that address, compromising both your privacy and that of your donors.

Silent Payments solve this by allowing a receiver to share one static address while ensuring that every sender generates a unique, one-time address on the blockchain that only the receiver can identify and spend.

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Key Technical Concepts

1. Static Address (The “Payment Code”): Instead of the standard bc1... address, a Silent Payment address starts with sp1.... This address is longer because it encodes two public keys:
   • Scan Key: Used by the receiver to “watch” the blockchain for incoming funds.
   • Spend Key: Used to actually sign and move the funds.
2. ECDH (Elliptic-Curve Diffie-Hellman): This is the “magic” math behind the protocol. It allows the sender and receiver to create a shared secret using only their public information.
   • The Sender uses their own transaction inputs (UTXOs) and the receiver’s Silent Payment address to calculate a “tweak.”
   • The Receiver uses their private scan key to find that same tweak on the blockchain.
3. Indistinguishability: On-chain, a Silent Payment looks exactly like a standard Taproot (P2TR) transaction. An outside observer cannot tell if a transaction was a normal payment or a Silent Payment, nor can they link it back to the sp1... address.

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How It Operates (The Process)

Step 1: The Setup (Receiver)

The receiver generates a Silent Payment address (sp1...) in a compatible wallet and shares it (e.g., on a website or social media).

Step 2: Sending (The Tweak)

When Alice sends Bitcoin to Bob’s sp1... address:

• Alice’s wallet selects the coins (UTXOs) she wants to spend.
• The wallet mathematically combines the private keys of Alice’s inputs with Bob’s public scan key.
• This creates a unique one-time Taproot address. Alice sends the funds to this new address.

Step 3: Receiving (The Scan)

Bob’s wallet is constantly “scanning” new blocks. For every transaction on the network, his wallet:

• Looks at the inputs used in that transaction.
• Performs a calculation using his private scan key.
• If the result matches one of the outputs in that transaction, the wallet “sees” the payment and adds it to Bob’s balance.

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Practical Step-by-Step Instructions

To Receive Funds:

1. Get a Compatible Wallet: Use a wallet that supports BIP352 (e.g., Cake Wallet, BitBox02, or Silentium).
2. Generate your sp1 Address: Locate the “Silent Payments” section in your wallet and copy your static address.
3. Share the Address: You can safely post this address anywhere. Unlike traditional addresses, reuse here is impossible—every donor will automatically generate a fresh address for you.
4. Sync/Scan: Because your wallet has to “calculate” your balance by looking at every transaction, you may need to let it scan for a few minutes to find new payments.

To Send Funds:

1. Paste the sp1 Address: Enter the recipient’s Silent Payment address in your wallet’s “Send” field.
2. Choose Inputs: Your wallet will automatically select your Taproot or SegWit inputs to use for the math.
3. Send: Confirm the transaction. You don’t need to ask the receiver for a “new” address; the protocol handles the privacy for you.

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Real-World Use Cases

• Political Dissidents & Human Rights: An activist can post a single donation address on a public website. Even if the government knows the static address, they cannot see how many people have donated or what the total balance is because every donation appears as a random, disconnected address on the blockchain.
• Social Media Tips: You can put your sp1 address in your “X” (Twitter) or Nostr profile. Friends can send you tips repeatedly without you ever having to generate and send them a fresh address for every tip.
• Business Invoicing: A company can print one QR code on an invoice. Every customer who scans it will pay into a unique address, preventing competitors from analyzing the company’s total revenue through a block explorer.

Bitcoin Privacy Revolution

This video provides a practical demonstration of how to use Silent Payments in daily transactions to enhance your financial privacy.