A new proposal to improve the privacy of Bitcoin through a payment system called Pay-to-EndPoint (P2EP) was announced. The plan seeks to increase the interchangeability of the cryptocurrency and decrease the chances of tracking it.
The proposal was published on Blockstream‘s website, as well as on the nopara73’s blog, a developer who has focused his work on improving the privacy of this network. The objective of Pay-to-EndPoint is to invalidate Meiklejohn’s heuristic (2013), which states that a set of different public keys in the entries of a transaction belong to the same user. In this way, the blockchain tackers cannot discover the origin of the coins.
P2EP requires that both the issuer and the receiver interact in the transaction simultaneously, contributing with coordinated entries that scatter the possession of the UTXO in a transaction.
The method of the succession of inputs requires that both parties are in line for the success of the operation while a huge number of entries are mixed.
The basic premise of P2EP is that both the sender and the receiver provide inputs to a transaction through a coordinated interaction which uses an endpoint that the recipient presents using a URI that complies with BIP 21. quote
These transactions are not quickly identifiable because they do not have a fingerprint. Furthermore, it is not necessary to be adopted by the entire ecosystem, it is enough for a small group to use it, and it becomes impossible to know which transactions use it and which do not.
The mechanism of the system
The developers explain that the first step to carry out a P2EP payment is to start a transaction with the receiver, who issues a URI that complies with BIP 21 and offers as a final stage the “endpoint.” If the recipient is not online when making the payment, the transaction is made traditionally. If he is online, the recipient signs a UTXO ownership test and sends some transactions to be approved by the sender. Only one of these has the real UTXO of the receiver.
Blockstream raises an example where Alice wants to pay Bob a total of 1 BTC. For this, she carries out a transaction of 3 BTC while Bob lends a total of 5 BTC. All these entries are mixed, returning 2 BTC to Alice who is the remaining balance of the transaction and sending a total of 6 BTC to Bob.
The developers stated that there are two ways to carry out this group of transactions:
- sending them in series -where the operations are arriving one after another;
- or in parallel -where all the transactions are transmitted at the same time.
Pay-To-EndPoint provides improved privacy, cancels the examination of subsets in transactions.
One of the most critical aspects of this proposal is that it does not require a code change for its implementation. Participants can make these types of payments without having to apply a fork to the Bitcoin network. As a disadvantage, Blockstream accentuated that the transactions will be slower and more expensive. Also, the receiver can only have online portfolios and access to a complete node. However, this system is not yet fully developed and is a proposal that will continue to be studied.