Silent payments are a type of payment that can be made to a unique onchain address for every payment even though the receiver provided the spender with a reusable (offchain) address. This helps improve privacy.

Traditionally, a user who receives payments should generate a new Bitcoin address for every payment. This is because receiving multiple payments to the same address reveals that the same user received those payments, even if the outputs are later spent in separate transactions. This is known as address reuse.

Using a new address often requires a secure interaction between sender and receiver so that the receiver can provide a fresh address every time. However, interaction is often infeasible and in many cases undesirable.

With silent payments, a receiver can generate and publish a single silent payment address, eliminating the need for interaction. The sender then selects one or more of their chosen inputs and uses their secret key(s) together with public key of the silent payment address to derive a shared secret which is used to generate the destination.

The intended recipient detects the payment by scanning transactions in the blockchain and performing an ECDH calculation with the summed input public keys of the transaction and the scan key from their address. The main downside is that it is more computationally expensive than simply scanning the UTXO set for a scriptPubKey as in BIP32-style wallets. Additionally, using silent payments in a collaborative setting such as coinjoining is left for future work, and it remains an open question whether such collaboration can be made provably secure.

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