Saturday, July 27, 2019

/u/neonzzzzz on Why exactly does privacy need to be achieved on base layer? Andreas Antonopulous' analogy with internet's "base layer" privacy. Isn't LN enough?

Schnorr complicates the chain analysis afaik

No, not by itself. But Schnorr can make CoinJoin transactions cheaper in the future.

do we really want CT with potential drawbacks (harder to validate, taking more space, ...) instead of just using LN as a mix?

CT isn't the only way how to hide amounts in on-chain transactions. Technique called PayJoin (pay-to-end-point), which is a variant of CoinJoin, can be used for such purpose too. Does not require any changes in Bitcoin base protocol and is already possible today. Currently supported by JoinMarket and Samourai Wallet.

what if I use 2 of my own LN nodes in scenario like this

It will not hide anything. In the simplest way, involving only channel opening, single LN transaction and channel closing, on-chain you will have channel opening transaction (sending funds from address A to HTLC address B) and channel closing transaction (sending all funds from HTLC address B to address C).

LN only provides privacy for individual LN payments itself. Usually channel closing transaction will send part of the funds of HTLC (payment channel) address to address C (LN node 1 wallet address), part to the address D (LN node 2 wallet address), but chain analysis will have no idea, how much payments and forwardings have been made between channel opening and closing and their details.

/u/neonzzzzz



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