Async Payjoin is the HTTPS for Bitcoin privacy 

Async Payjoin provides the most privacy for Bitcoin. The model is similar to HTTPS (secure HTTPS), which allows secure payment for web-based transactions. Payjoin foundation This privacy toolkit has been developed in secret and must be used by many Bitcoin wallets to achieve privacy on a mass scale. 

Modeled after the Bitcoin and Lightning dev kits — which have become quite popular among wallet developers — and built with the same cryptographic primitives already in Bitcoin core, such that it can be easily integrated into the main Bitcoin implementation, Async Payjoin is designed from the bottom up for mass adoption. 

Follow in the footsteps Let’s EncryptAsync Payjoin, which led to the adoption of HTTPS in 2010 via free, open-source software, aims to address Bitcoin’s privacy issues through an open standard. Async Payjoin – unlike specific privacy wallets, such as Samourai Wallet, Wasabi and others – is a standard software library which any bitcoin payments application can use. It joins an open privacy standard, like HTTPS. 

Async Payjoin (also known by the Foundation as Payjoin V2) is different from V1, which was an earlier implementation, and required both users be online at the same time to make a transaction. Payjoin Foundation V1 and V2 are supported by a growing number of Bitcoin wallets today.  

Payjoin Async is backwards-compatible, so users who do not have wallets supporting the new standard can still use QR codes and Payjoin addresses without any friction. Bitcoiners who are interested in privacy can ask their wallet provider to implement this open-source standard. Developers will find technical references at Bip 77Alongside their plug-and-play dev kit on GitHub. 

PayJoin Foundation Team

OpenSats as well as Cake Wallet provide financial support to PayJoin Foundation. SpiralHuman Rights Foundation MaelstromBrink and, have provided support to many open-source contributors. They GitHub shows 37 contributors Only on Rust’s implementation of Async Payjoin.

The development of Async Payjoin, or Payjoin V2 through Bip 77 is led by Dan GouldFounder and executive director of Payjoin Foundation. Lead maintainer for the Payjoin DevKit. Dan is a pioneer in Bitcoin privacy since TumbleBit, forked Wasabi Wallet to be used on mobile devices, and coauthored BIP 77 along with Yuval KogmanSpiral BTC Wizard and advisory board members with more than 20 years’ experience. Kogman is a Bitcoin privacy expert who has developed WabiSabi DoS Protections, as well as whistleblower vulnerabilities. CoinJoin implementations. 

Armin Sabouri has also joined the team as R&D lead with prior roles as CTO at Botanix and engineer at Casa, co-winner of the 2021 MIT Bitcoin Hackathon by getting Bip 78 CoinJoin working on Mac OS via TorThe author of BIP 347 is BIP 347. 

Gould said to Bitcoin Magazine they were always raising money. “none of this work is possible without the funders.” The Payjoin Foundation was chosen over a profit-making entity because of the following reasons: “Bitcoin privacy — for-profits have basically been killed.” 

Gould says that nonprofits are more likely to be able to resolve the issue because they align the incentives. “I think the for-profits have an incentive to sell something that doesn’t necessarily guarantee privacy because if they make a sale, they earn profit. And we’ve seen on the internet that it was attempted. Phil Zimmerman started a company that developed PGP. But HTTPS was a decentralized nonprofit effort, as was Tor”. Gould reports that Payjoin Foundation is in the process of applying for its 501 (c), which has yet to be approved. Contact him by email at donate@payjoin.org. 

What is Payjoin?

Payjoin offers privacy for Bitcoin transactions by breaking the common transaction pattern where an input is split into two and then used to pay. One of the outputs is most likely the payment, and the second the change to sender. 

UTXOs are like coins in pockets. When a transaction tries sending more than what is contained in one UTXO (unspent transaction output), it pulls from another. This links two pockets of coins that may not have been connected on the blockchain up to this point. In the eyes of analysts of the blockchain, this reduces privacy for users. They can presume that the two UTXO packages belong to the exact same entity. 

Payjoin dispels the standard heuristic of input by facilitating the coordination between sender and receiver. The result is transactions with two inputs, two outputs where the one input comes from the receiver. Payjoin ensures that the receiver receives the exact amount they expect. What was a two-output single input transaction has now become a two-input and two-output two-output one, which confuses on-chain analyst. This is because the more this type of transaction exists, the more the single-input-heuristic fails. The result? More privacy for everyone, since the assumption that underlies on-chain analyses breaks down.   

The transaction will not be valid if neither party agrees. This is because the process is non-custodial and both parties have full control of amounts. 

Gould warned about the amount of information that is being leaked by normal Bitcoin transactions. He referred to Chain Analysis which, under certain circumstances, can gain access to user data in order to identify the owner of a particular UTXO. “if you snoop on that, you can see who you’ve transferred money to in the past. You can see who someone transfers money to in the future. You can see how much money someone has. You can see how much money someone makes.”

This type of enhancement to Bitcoin privacy is crucial for the success of Bitcoin, as it enforces the fungibility (an important characteristic of sound money) of the asset. Fungibility is the idea that all coins can be used interchangeably and are equal. The history of a coin does not affect its fungibility. 

Zcash, Monero and other cryptocurrencies that are geared towards maximizing privacy in the blockchain, such as Zcash, provide higher levels of default privacy because they encrypt all amounts being transferred between parties. The cost is high, as the verification of total coin supply in alternative cryptocurrency systems can be very difficult. Bugs in cryptography can lead to undetectable inflation bugs, which could undermine scarcity, an important quality of sound currency.

Payjoin, in turn, provides Bitcoin with a greater degree of privacy on the chain without encrypting amounts transferred between the parties. This respects the scarcity and fungibility of Bitcoin. This is the biggest trade-off, as it cannot be implemented at a protocol level; wallets must adopt it and users will engage.

The fact that a fiat-level system is closed and private protects the user from third-party analyses, or at least tries to. The government and bank executives have a much better understanding of user balances than organized crime. Async Payjoin aims to bring Bitcoin up to the level of privacy laws that exist in many countries. 

Async network privacy using V2 and client-server models. 

Payjoin’s traditional system had the disadvantage that both parties needed to be on-line to create the transaction. Payjoin V2 uses the Oblivious HTTP standard to implement a blinded director server that provides asynchronous Payjoin co-ordination between parties.

Gould tells Bitcoin Magazine “the cool thing is the protocol has the directory server blinded. The directory server is only reachable by oblivious HTTP, which is basically a forced proxy. So the IP addresses (of users) are never leaked to the directory server.” Add that to your list. “the payload (pre-signed transaction) is actually end-to-end encrypted between the sender and the receiver anyway. So the directory just gets an 8-kilobyte uniform encrypted blob. They don’t see anything.”

Gould compared Tor to OHTTP, explaining that “The reason we used it is because it’s a web standard. So it’s gone through the rigorous review process. OHTTP is literally supported in the iOS operating system. It’s used in browsers.” Add that “OHTTP it’s kind of like the minimal viable product of Tor where Tor layers encryption and does multiple hops and this is just the most minimal version where you just have one hop. You just have one layer of encryption.” Lightning Network uses multi-hop network cryptography to protect users’ privacy. 

Payjoin V2 server operators receive no compensation for their work, just as Tor exit nodes have done since decades.  

Compliance?

As a result of this, regulators and exchange operators are often concerned about Bitcoin privacy technology, because they perceive it to conflict with compliance topics. Gould says that it is not true. “the reality is that a compliance regime is totally independent from the nature of the chain. If an exchange wants to collect your baby’s name, know the place you live, your phone number, and what source of funds, having privacy by default doesn’t stop them from doing that. Doesn’t stop them from asking for it in order to do business with the user.” Add that “It just doesn’t give them complete insight into your whole wallet, past, present, and future. So it puts the power to consent to reveal the information about your money in your own hands.”