This is an opinion editorial by Seth For Privacy, a privacy advocate and host of the “Opt Out Podcast.”
One of the most basic keys to improving your privacy on Bitcoin has long been avoiding the re-use of addresses for multiple payments. But while doing so may seem simple these days, with most wallets automatically generating new addresses for each payment, what do you do when you need to simply accept payments repeatedly, from multiple people, or without complex infrastructure in place?
This is where the concept of a “reusable payment code,” sometimes called a “Stealth Address,” comes into play, enabling simple static addresses to be used for repeat payments while preserving on-chain privacy by making it harder to link payments together.
Why Does Bitcoin Need Reusable Payment Codes?
While it is currently possible to use more complex infrastructure, like the payment processing system offered by BTCPay Server[1], to accept donations or payments without re-using addresses, the need to set up an entirely separate server alongside a Bitcoin node makes the more simple use cases for receiving payments far too complex for most people.
If you simply want to be able to run a donation campaign, let friends send you bitcoin repeatedly, or let others tip you for your work, right now you generally either have to run complex infrastructure or have extremely poor privacy by using a static Bitcoin address.
Enter reusable payment codes, a concept that dates back to 2015 with the original stealth address BIP[2] created by Peter Todd. While the original proposal never officially became a proposed BIP (despite being given the BIP number 63), a successor, BIP47[3], has started to see an increase of usage in recent years in wallets like Samourai Wallet
