bitcoin-dev
Combined summary - Redefine packages to discourage address reuse
The discussion revolves around the concerns and potential solutions regarding address re-use in Bitcoin transactions, highlighting its significant privacy risks for all transaction parties.
A suggestion has been made to alter the mempool policy to reject transactions that involve address re-use. However, this proposal seems insufficient on its own. An alternative solution involves redefining package transactions as outlined in BIP 331, which presents a conceptual framework where transactions are organized in a Directed Acyclic Graph (DAG), linking each transaction based on the output it spends from another within the same package. By adopting this new definition, transactions with address re-use could be excluded from package relay by nodes using the SENDPACKAGES P2P message protocol, potentially enhancing privacy without changing the fundamental operations of Bitcoin transactions.
Despite its potential benefits, this approach faces several challenges, including the technical difficulty and increased time required to scan for address re-use among transactions. This complexity suggests a compromise might be necessary, such as limiting address reuse checks to transactions within the same chain, to maintain feasibility and efficiency. Moreover, there is concern over the willingness of BIP authors to revise current standards and the need for integrating these changes into Bitcoin Core to ensure effective implementation. These issues indicate the complexities involved in addressing privacy concerns within Bitcoin transactions and underscore the importance of ongoing dialogue and innovation within the developer community.