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From: Sjors Provoost <sjors@sprovoost.nl>
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	Rhavar <rhavar@protonmail.com>
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Subject: Re: [bitcoin-dev] bustapay BIP :: a practical sender/receiver
 coinjoin protocol
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> Op 30 aug. 2018, om 22:24 heeft Ryan Havar via bitcoin-dev =
<bitcoin-dev@lists.linuxfoundation.org> het volgende geschreven:
>=20
> =3D=3DMotivation=3D=3D
>=20
> One of the most powerful heuristic's employed by those whose goal is =
to undermine
> bitcoin's fungiblity has been to assume all inputs of a transaction =
are signed by
> a single party. In the few cases this assumption does not hold, it is =
generally
> readibly recognizable (e.g. traditional coinjoins have a very obvious =
structure,
> or multisig outputs are most frequently validated onchain).

In addition to mixers, custodial wallets and exchanges also contribute =
to breaking this heuristic; even though there=E2=80=99s a single entity =
signing multiple inputs, that entity doesn=E2=80=99t represent a single =
owner of the funds. As with mixers, exchanges and custodial wallets can =
sometimes be spotted as well, but we don=E2=80=99t know what percentage =
is missed.

Breaking this heuristic at scale would be good, but do we know to what =
degree it=E2=80=99s already broken? Is there any empirical research =
measuring its accuracy and false positive rate?

> Should bustapay enjoy widespread adoption, a "v2" specification
> will be created with desired extensions.

I would not put future promises in a BIP. Rather, explain how extension =
might work.

> =3D=3DSpecification=3D=3D
>=20
> A bustapay payment is made from a sender to a receiver.
>=20
> Step 1. Sender creates a bitcoin transaction paying the receiver
>=20
> This transaction must be fully valid, signed and all inputs must use =
segwit. This transaction is known as the "template transaction=E2=80=9D.

Using PSBT?

> This transaction must not be propagated on the bitcoin network.

This can=E2=80=99t be guaranteed, and even after step 5 a reorg could =
cause it to get confirmed. It=E2=80=99s useful to explain why this =
doesn=E2=80=99t matter.

>=20
> Step 2. Sender gives the "template transaction" to the receiver
>=20
> This would generally be done as an HTTP POST.
> The exact URL to submit it to could be specified with a bip21 encoded =
address. Such as =
bitcoin:2NABbUr9yeRCp1oUCtVmgJF8HGRCo3ifpTT?bustapay=3Dhttps://bp.bustabit=
.com/submit <https://bp.bustabit.com/submit> and the HTTP body should be =
the raw transaction hex encoded as text.

This seems too detailed. If you want to specify the message protocol, =
maybe that can have it=E2=80=99s own section where you list each of the =
messages, the URL, parameters and encoding. Then you can keep this =
overview section shorter.

The use of HTTPS kind of forces sender and recipient to use a 3rd party =
service, even though this could done bilaterally. What if the payment =
request contained a (single-use) Onion URL an expiration date? The =
recipient would have to keep a hidden service up until the expiration =
date, though the sender could try again if there=E2=80=99s temporary =
reachability issue.

Adding a (onion) URL to the the payment request also makes gradual =
adoption easier, because recipients don=E2=80=99t need to worry if =
senders support this protocol.

> Step 3. Receiver processes the transaction and returns a partially =
signed coinjoin
>=20
> The receiver validates the transaction is valid, pays himself and is =
eligible for propation. The receiver then adds one of his own inputs =
(known as the "contributed input") and increase the output that pays =
himself by the contributed input amount. Doing so will invalidate the =
"template transaction"'s original input signatures, so the sender needs =
to return this "partial transaction" back to the receiver to sign. This =
is returned as a hex-encoded raw transaction a response to the original =
HTTP POST request.

> * Bustapay could be abused by a malicious party to query if you own a =
deposit address or not. So never accept a bustapay transaction that pays =
an already used deposit address


Indeed, once the recipient adds funds, they reveal more about themselves =
to the sender then they would otherwise. I think that needs more =
elaboration.

I assume the transaction in step (1) is some sort of collateral to =
insure they=E2=80=99re not just trying to extract private information =
from you? However if fees are low they could still double-spend it after =
the recipient revealed their address, especially because the recipient =
has no way of RBF=E2=80=99ing the original (though CPFP could help). =
Perhaps require that the original transaction pays a fee based on the =
expected size of the final transaction?

>=20
> Notes for sending applications:
>=20
> * The HTTP response must *not* be trusted. It should be fully =
validated that no unexpected changes have been made to the transaction.

Not trusting anything is obvious. :-) It=E2=80=99s better to explicitly =
state what exactly needs to be verified (amounts, destinations, inputs, =
etc), and maybe list a few obvious shenanigans to watch out for.

A more general concern is that the sender can=E2=80=99t know for sure =
the recipient really supports this protocol, so it should assume that =
whatever information it pings to some API could be used maliciously. In =
what ways could it be abused?

Sjors

--Apple-Mail=_48127117-8F35-4700-ADFA-F388148ACF8B
Content-Transfer-Encoding: quoted-printable
Content-Type: text/html;
	charset=utf-8

<html><head><meta http-equiv=3D"Content-Type" content=3D"text/html; =
charset=3Dutf-8"></head><body style=3D"word-wrap: break-word; =
-webkit-nbsp-mode: space; line-break: after-white-space;" class=3D""><div =
class=3D""><br class=3D""></div><div><blockquote type=3D"cite" =
class=3D""><div class=3D"">Op 30 aug. 2018, om 22:24 heeft Ryan Havar =
via bitcoin-dev &lt;<a =
href=3D"mailto:bitcoin-dev@lists.linuxfoundation.org" =
class=3D"">bitcoin-dev@lists.linuxfoundation.org</a>&gt; het volgende =
geschreven:</div><div class=3D""><div class=3D""><br class=3D""></div><div=
 class=3D"">=3D=3DMotivation=3D=3D<br class=3D""></div><div class=3D""><br=
 class=3D""></div><div class=3D"">One of the most powerful heuristic's =
employed by those whose goal is to undermine<br class=3D""></div><div =
class=3D"">bitcoin's fungiblity has been to assume all inputs of a =
transaction are signed by<br class=3D""></div><div class=3D"">a single =
party. In the few cases this assumption does not hold, it is =
generally<br class=3D""></div><div class=3D"">readibly recognizable =
(e.g. traditional coinjoins have a very obvious structure,<br =
class=3D""></div><div class=3D"">or multisig outputs are most frequently =
validated onchain).</div></div></blockquote><div><br =
class=3D""></div><div>In addition to mixers, custodial wallets and =
exchanges also contribute to breaking this heuristic; even though =
there=E2=80=99s a single entity signing multiple inputs, that entity =
doesn=E2=80=99t represent a single owner of the funds. As with mixers, =
exchanges and custodial wallets can sometimes be spotted as well, but we =
don=E2=80=99t know what percentage is missed.</div><div><br =
class=3D""></div><div>Breaking this heuristic at scale would be good, =
but do we know to what degree it=E2=80=99s already broken? Is there any =
empirical research measuring its accuracy and false positive =
rate?</div><div><br class=3D""></div><blockquote type=3D"cite" =
class=3D""><div class=3D""><div class=3D"">Should bustapay enjoy =
widespread adoption, a "v2" specification</div><div class=3D"">will be =
created with desired extensions.<br =
class=3D""></div></div></blockquote><div><br class=3D""></div><div>I =
would not put future promises in a BIP. Rather, explain how extension =
might work.</div><br class=3D""><blockquote type=3D"cite" class=3D""><div =
class=3D""><div class=3D"">=3D=3DSpecification=3D=3D<br =
class=3D""></div><div class=3D""><br class=3D""></div><div class=3D"">A =
bustapay payment is made from a sender to a receiver.<br =
class=3D""></div><div class=3D""><br class=3D""></div><div class=3D"">Step=
 1. Sender creates a bitcoin transaction paying the receiver<br =
class=3D""></div><div class=3D""><br class=3D""></div><div class=3D"">This=
 transaction must be fully valid, signed and all inputs must use segwit. =
This transaction is known as the "template =
transaction=E2=80=9D.</div></div></blockquote><div><br =
class=3D""></div><div>Using PSBT?</div><br class=3D""><blockquote =
type=3D"cite" class=3D""><div class=3D""><div class=3D""> This =
transaction must not be propagated on the bitcoin network.<br =
class=3D""></div></div></blockquote><div><br class=3D""></div><div>This =
can=E2=80=99t be guaranteed, and even after step 5 a reorg could cause =
it to get confirmed. It=E2=80=99s useful to explain why this doesn=E2=80=99=
t matter.&nbsp;</div><br class=3D""><blockquote type=3D"cite" =
class=3D""><div class=3D""><div class=3D""><br class=3D""></div><div =
class=3D"">Step 2. Sender gives the "template transaction" to the =
receiver<br class=3D""></div><div class=3D""><br class=3D""></div><div =
class=3D"">This would generally be done as an HTTP =
POST.</div></div></blockquote><blockquote type=3D"cite" class=3D""><div =
class=3D""><div class=3D"">The exact URL to submit it to could be =
specified with a bip21 encoded address. Such as =
bitcoin:2NABbUr9yeRCp1oUCtVmgJF8HGRCo3ifpTT?bustapay=3D<a =
href=3D"https://bp.bustabit.com/submit" =
class=3D"">https://bp.bustabit.com/submit</a> and the HTTP body should =
be the raw transaction hex encoded as text.<br =
class=3D""></div></div></blockquote><div><br =
class=3D""></div><div><div>This seems too detailed. If you want to =
specify the message protocol, maybe that can have it=E2=80=99s own =
section where you list each of the messages, the URL, parameters and =
encoding. Then you can keep this overview section shorter.</div><div><br =
class=3D""></div><div>The use of HTTPS kind of forces sender and =
recipient to use a 3rd party service, even though this could done =
bilaterally. What if the payment request contained a (single-use) Onion =
URL an expiration date? The recipient would have to keep a hidden =
service up until the expiration date, though the sender could try again =
if there=E2=80=99s temporary reachability issue.</div><div><br =
class=3D""></div><div>Adding a (onion) URL to the the payment request =
also makes gradual adoption easier, because recipients don=E2=80=99t =
need to worry if senders support this protocol.</div><div><br =
class=3D""></div></div><blockquote type=3D"cite" class=3D""><div =
class=3D""><div class=3D"">Step 3. Receiver processes the transaction =
and returns a partially signed coinjoin<br class=3D""></div><div =
class=3D""><br class=3D""></div><div class=3D"">The receiver validates =
the transaction is valid, pays himself and is eligible for propation. =
The receiver then adds one of his own inputs (known as the "contributed =
input") and increase the output that pays himself by the contributed =
input amount. Doing so will invalidate the "template transaction"'s =
original input signatures, so the sender needs to return this "partial =
transaction" back to the receiver to sign. This is returned as a =
hex-encoded raw transaction a response to the original HTTP POST =
request.<br class=3D""></div></div></blockquote><div><br =
class=3D""></div><div><blockquote type=3D"cite" class=3D""><div =
class=3D"">* Bustapay could be abused by a malicious party to query if =
you own a deposit address or not. So never accept a bustapay transaction =
that pays an already used deposit =
address</div></blockquote></div><div><br class=3D""></div><div>Indeed, =
once the recipient adds funds, they reveal more about themselves to the =
sender then they would otherwise. I think that needs more =
elaboration.</div><div><br class=3D""></div>I assume the transaction in =
step (1) is some sort of collateral to insure they=E2=80=99re not just =
trying to extract private information from you? However if fees are low =
they could still double-spend it after the recipient revealed their =
address, especially because the recipient has no way of RBF=E2=80=99ing =
the original (though CPFP could help). Perhaps require that the original =
transaction pays a fee based on the expected size of the final =
transaction?</div><div><br class=3D""><blockquote type=3D"cite" =
class=3D""><div class=3D""><div class=3D""><br class=3D""></div><div =
class=3D"">Notes for sending applications:</div><div class=3D""><br =
class=3D""></div><div class=3D"">* The HTTP response must *not* be =
trusted. It should be fully validated that no unexpected changes have =
been made to the transaction.<br =
class=3D""></div></div></blockquote><div><br class=3D""></div><div>Not =
trusting anything is obvious. :-) It=E2=80=99s better to explicitly =
state what exactly needs to be verified (amounts, destinations, inputs, =
etc), and maybe list a few obvious shenanigans to watch out =
for.</div><div><br class=3D""></div><div>A more general concern is that =
the sender can=E2=80=99t know for sure the recipient really supports =
this protocol, so it should assume that whatever information it pings to =
some API could be used maliciously. In what ways could it be =
abused?</div></div><br class=3D""><div =
class=3D"">Sjors</div></body></html>=

--Apple-Mail=_48127117-8F35-4700-ADFA-F388148ACF8B--

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