Privacy-focused bitcoin wallet, Samourai, integrates BIP 47, Reusable Payment Codes

Samourai Wallet is designed to allow users to send, receive, and store bitcoins in a private and secure way. Although the wallet is currently in alpha testing, Samourai already gives users fine grained control over privacy, with no address reuse, random change outputs, Tor and VPN support.

Adding to the features list, the wallet development team recently announced the integration of Reusable Payment Codes for Hierarchical Deterministic Wallets, otherwise known as Bitcoin Improvement Proposal (BIP) 47.

Originally released in early 2015, by bitcoin developer and engineer Justus Ranvier, BIP 47 defines a technique for creating a “payment code” that can be publicly advertised, and associated with a real-life identity, without creating any loss of security or privacy.

“You can publicize your payment code in the same way that you can publicize your email address. Even if everyone knows your payment code, nobody can monitor the blockchain to see how many payments you have received or which transactions are yours.”

• Justus Ranvier, Bitcoin Developer and Engineer

Once addresses are used, anyone can see the balance and transaction history, as Bitcoin transactions are public, traceable, and permanently stored in the Bitcoin network. Since users usually have to reveal their identity in order to receive goods or services, Bitcoin addresses and their associated payment histories cannot remain fully anonymous, and may become trivial to trace in the future.

Reusable payment codes can direct funds to a unique bitcoin address for every transaction. Unlike DarkWallet-style stealth addresses, payments sent to a payment code are indistinguishable from traditional Bitcoin transactions on the block chain. They cannot be identified, cannot be easily censored, and it’s virtually impossible to analyze the transactions using existing technologies.

An increasing number of platforms are beginning to adopt BIP 47, including Stash, a trustless transaction platform. Stash combines the Bitcoin blockchain with Open-Transactions, an extremely fast and low cost off-blockchain transaction system, which augments Bitcoin without forcing users to trust a server with their money.

With payment codes, “you can use the same address every time,” explained Chris Odom, the founder and developer behind Stash. “you have a single address. People can always send to that same address, and that means they don’t have to ask you first for an address to send to,“

“Whenever you receive a payment through a payment address (or payment code, BIP 47), there is a return address. Both parties can see a complete history of all the transactions that were sent between them; the critical point is no one else can.”

• Chris Odom, Open Transactions Creator

Other established bitcoin startups and wallet platforms, including Mycelium, are working on the implementation and development of a similar concept called CoinJoin, which anonymizes bitcoin transactions using a system proposed by Bitcoin Core developer Gregory Maxwell.

CoinJoin provides a way for multiple parties to combine transfers into a single transaction that has multiple inputs and multiple outputs, in a way that prevents analysis of ownership through public data. Someone observing the blockchain no longer knows which output correlates to each input, obscuring the financial transactions. CoinJoin-based mixing isn’t a type of transaction, it’s a way to make a transaction. Once the transaction is made, it looks no different from any other, which provides censorship resistance.

One of the leading developers of the CoinJoin project, Mycelium, proposed that Samourai share their implementation of BIP 47, to compare the efficiencies and benefits. “Is your BIP47 fully open source? We’ll finish CoinJoin, you finish BIP47, and we share?,” the Mycelium team asked on Twitter.

“BIP47 is just days away. We are using it internally amongst us devs.”

– Samourai Wallet

Through the development and implementation of CoinJoin, the Mycelium team aims to deliver privacy-focused bitcoin wallet services that surpass the ratings of Armory wallet and Darkwallet.

According to a report called “Spring 2015 Wallet Privacy Rating Report,” Mycelium has already been rated exceptionally well, as the world’s third best wallet for privacy, by bitcoin experts including BIP 47 creator Justus Ranvier. The wallet scored higher than competitors including blockchain, multibit, airbitz, and electrum.

Mycelium was the best performer of all mobile wallets in that round of rating, by the Open Bitcoin Privacy Project, but its score suffered from the method via which the wallet obtains balance information. Mycelium wallets obtain their balance information from dedicated Mycelium servers instead of connecting to Bitcoin network peers “while this does provide substantial benefits in terms of performance and battery life, this practice places Mycelium in a position to collect identifying information about their users,” stated the organization.