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To: Bitcoin Protocol Discussion <bitcoin-dev@lists.linuxfoundation.org>
From: Pieter Wuille <bitcoin-dev@wuille.net>
Reply-To: Pieter Wuille <bitcoin-dev@wuille.net>
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Subject: Re: [bitcoin-dev] Rebroadcast mechanism in Bitcoin P2P network
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> It is that the solution to privacy is to use privacy-enhancing network
> communications, such as TOR. I am not against a mechanism to rebroadcast
> transactions more robustly if the mempool of adjoining nodes has
> forgotten about them, but the truth is, all transactions originate from
> some node, and there are methods that allow an individual node to be
> identified as the likely source of a transaction unless privacy-enabled
> networks are utilised. Having a different method to cause rebroadcast
> does not obfuscate the origin.

You're talking about distinct aspects of transaction privacy.

The rebroadcasting approach as it exists on the network, where wallets are =
responsible for their own rebroadcasting, directly reveals to your peers a =
relation between nodes and transactions: whenever any node relays the same =
transaction twice, it almost certainly implies they are the origin.

This is just a node-transaction relation, and not necessarily IP-transactio=
n relation. The latter can indeed be avoided by only connecting over Tor, o=
r using other privacy networks, but just hiding the relation with IP addres=
ses isn't sufficient (and has its own downsides; e.g. Tor-only connectivity=
 is far more susceptible to partition/Eclipse/DoS attacks). For example see=
ing the same node (even without knowing its IP) rebroadcast two transaction=
 lets an observe infer a relation between those transactions, and that too =
is a privacy leak.

I believe moving to a model where mempools/nodes themselves are responsible=
 for rebroadcasting is a great solution to improving this specific problem,=
 simply because if everyone rebroadcasts, the original author doing it too =
does not stand out anymore. It isn't "fixing privacy", it's fixing a specif=
ic leak, one of many, but this isn't a black and white property.

Cheers,

--
Pieter