to negotiate a coinjoin transaction during a payment between them.
===Copyright===
This BIP is licensed under the 2-clause BSD license.
===Motivation===
When two parties (later referred to as sender and receiver) want to transact,
most of the time, the sender creates a transaction spending their own Unspent Transaction Outputs (UTXOs), signs
it and broadcasts it on the network.
This simple model gave birth to several heuristics impacting the privacy of the parties and of the network as a whole.
* Common input ownership heuristic: In most transactions, all the inputs belong to the same party.
* Change identification from scriptPubKey type: If all inputs are spending UTXOs of a certain scriptPubKey type, then the change output is likely to have the same scriptPubKey type, too.
* Change identification from round amount: If an output in the transaction has a round amount, it is likely an output belonging to the receiver.
We will designate these three heuristics as <code>common-input</code>, <code>change-scriptpubkey</code>, <code>change-round-amount</code>.
The problems we aim to solve are:
* For the receiver, there is a missed opportunity to consolidate their own UTXOs or making payment in the sender's transaction.
* For the sender, there are privacy leaks regarding their wallet that happen when someone applies the heuristics detailed above to their transaction.
Our proposal gives an opportunity for the receiver to consolidate their UTXOs while also batching their own payments, without creating a new transaction. (Saving fees in the process)
For the sender, it allows them to invalidate the three heuristics above. With the receiver's involvement, the heuristics can even be poisoned. (ie, using the heuristics to intentionally mislead blockchain analysis)
Note that the existence of this proposal is also improving the privacy of parties who are not using it by making the three heuristics unreliable to the network as a whole.
=== Relation to BIP79 (Bustapay) ===
Another implementation proposal has been written: [[https://github.com/bitcoin/bips/blob/master/bip-0079.mediawiki|BIP79 Bustapay]].
We decided to deviate from it for several reasons:
* It was not using PSBT, so if the receiver wanted to bump the fee, they would need the full UTXO set.
* Inability to change the payment output to match scriptPubKey type.
* Lack of basic versioning negotiation if the protocol evolves.
* No standardization of error condition for proper feedback to the sender.
* The receiver of the payment, presents a [[bip-0021.mediawiki|BIP 21 URI]] to the sender with a parameter <code>pj=</code> describing a payjoin endpoint.
* The sender creates a signed, finalized PSBT with witness UTXO or previous transactions of the inputs. We call this PSBT the <code>original</code>.
* The receiver replies back with a signed PSBT containing his own signed inputs/outputs and those of the sender. We call this PSBT <code>Payjoin proposal</code>.
* The sender verifies the proposal, re-signs his inputs and broadcasts the transaction to the Bitcoin network. We call this transaction <code>Payjoin transaction</code>.
<pre>
+----------+ +--------+ +-----------------+
| Receiver | | Sender | | Bitcoin Network |
+----+-----+ +---+----+ +-------+---------+
| +-----------------+ | |
+-------+ BIP21 with ?pj= +------->+ |
| +-----------------+ | |
| | |
| +---------------+ | |
+<-------+ Original PSBT +---------+ |
| +---------------+ | |
| | |
| +------------------+ | |
| | Payjoin Proposal | | |
+-------+ PSBT +------>+ |
| +------------------+ | |
| | +--------------+ |
| |---+ Payjoin | |
| | | transaction +-->+
| | +--------------+ |
+ + +
</pre>
The original PSBT is sent in the HTTP POST request body, base64 serialized, with <code>text/plain</code> in the <code>Content-Type</code> HTTP header and <code>Content-Length</code> set correctly.
The payjoin proposal PSBT is sent in the HTTP response body, base64 serialized with HTTP code 200.
To ensure compatibility with web-wallets and browser-based-tools, all responses (including errors) must contain the HTTP header <code>Access-Control-Allow-Origin: *</code>.
The sender must ensure that the url refers to a scheme or protocol using authenticated encryption, for example TLS with certificate validation, or a .onion link to a hidden service whose public key identifier has already been communicated via a TLS connection. Senders SHOULD NOT accept a url representing an unencrypted or unauthenticated connection.
* <code>pj=</code>: Represents an http(s) endpoint which the sender can POST the original PSBT.
* <code>pjos=0</code>: Signal to the sender that they MUST disallow [[#output-substitution|payment output substitution]]. (See [[#unsecured-payjoin|Unsecured payjoin server]])
When the payjoin sender posts the original PSBT to the receiver, he can optionally specify the following HTTP query string parameters:
* <code>v=</code>, the version number of the payjoin protocol that the sender is using. The current version is <code>1</code>.
This can be used in the future so the receiver can reject a payjoin if the sender is using a version which is not supported via an error HTTP 400, <code>version-unsupported</code>.
If not specified, the receiver will assume the sender is <code>v=1</code>.
If the receiver does not support the version of the sender, they should send an error with the list of supported versions:
<pre>
{
"errorCode": "version-unsupported",
"supported" : [ 2, 3, 4 ],
"message": "The version is not supported anymore"
}
</pre>
* <code>additionalfeeoutputindex=</code>, if the sender is willing to pay for increased fee, this indicate output can have its value substracted to pay for it.
If the <code>additionalfeeoutputindex</code> is out of bounds or pointing to the payment output meant for the receiver, the receiver should ignore the parameter. See [[#fee-output|fee output]] for more information.
* <code>maxadditionalfeecontribution=</code>, if the sender is willing to pay for increased fee, an integer defining the maximum amount in satoshis that the sender is willing to contribute towards fees for the additional inputs. <code>maxadditionalfeecontribution</code> must be ignored if set to less than zero. See [[#fee-output|fee output]] for more information.
Note that both <code>maxadditionalfeecontribution=</code> and <code>additionalfeeoutputindex=</code> must be specified and valid for the receiver to be allowed to decrease an output belonging to the sender.
This fee contribution can't be used to pay for anything else than additional input's weight.
* <code>minfeerate=</code>, a decimal in satoshi per vbyte that the sender can use to constraint the receiver to not drop the minimum fee rate too much.
* <code>disableoutputsubstitution=</code>, a boolean indicating if the sender forbids the receiver to substitute the receiver's output, see [[#output-substitution|payment output substitution]]. (default to <code>false</code>)
In some situation, the sender might want to pay some additional fee in the payjoin proposal.
If such is the case, the sender must use both [[#optional-params|optional parameters]] <code>additionalfeeoutputindex=</code> and <code>maxadditionalfeecontribution=</code> to indicate which output and how much the receiver can substract fee.
There is several cases where a fee output is useful:
* The sender's original transaction's fee rate is at the minimum accepted by the network, aka <code>minimum relay transaction fee rate</code>, which is typically 1 satoshi per vbyte.
In such case, the receiver will need to increase the fee of the transaction after adding his own inputs to not drop below the minimum relay transaction fee rate.
* The sender's wallet software is using round fee rate.
If the sender's fee rate is always round, then a blockchain analyst can easily spot the transactions of the sender involving payjoin by checking if, when removing a single input to the suspected payjoin transaction, the resulting fee rate is round.
When a sender pick a specific fee rate, the sender expects the transaction to be confirmed after a specific amount of time. But if the receiver adds an input without bumping the fee of the transaction, the payjoin transaction fee rate will be lower, and thus, longer to confirm.
Our recommendation for <code>maxadditionalfeecontribution=</code> is <code>originalPSBTFeeRate * vsize(sender_input_type)</code>.
* If the sender included inputs in the original PSBT owned by the receiver, the receiver must either return error <code>original-psbt-rejected</code> or make sure they do not sign those inputs in the payjoin proposal.
* If the sender's inputs are all from the same scriptPubKey type, the receiver must match the same type. If the receiver can't match the type, they must return error <code>unavailable</code>.
<code>*</code>: Interactive receivers are not required to validate the original PSBT because they are not exposed to [[#probing-attack|probing attacks]].
*** The amount that was substracted from the output's value is less than or equal to <code>maxadditionalfeecontribution</code>. Let's call this amount <code>actual contribution</code>.
*** Make sure the actual contribution is only paying fee: The <code>actual contribution</code> is less than or equals to the difference of absolute fee between the payjoin proposal and the original PSBT.
*** Make sure the actual contribution is only paying for fee incurred by additional inputs: <code>actual contribution</code> is less than or equals to <code>originalPSBTFeeRate * vsize(sender_input_type) * (count(payjoin_proposal_inputs) - count(original_psbt_inputs))</code>. (see [[#fee-output|Fee output]] section)
** Verify that all sender's outputs (ie, all outputs except the output actually paid to the receiver) from the original PSBT are in the proposal.
* Once the proposal is signed, if <code>minfeerate</code> was specified, check that the fee rate of the payjoin transaction is not less than this value.
* The sender must allow the receiver to add/remove or modify the receiver's own outputs. (if payment output substitution is disabled, the receiver's outputs must not be removed or decreased in value)
* If no input have been added, the sender's wallet implementation should accept the payjoin proposal, but not mark the transaction as an actual payjoin in the user interface.
Our method of checking the fee allows the receiver and the sender to batch payments in the payjoin transaction.
It also allows the receiver to pay the fee for batching adding his own outputs.
==Rationale==
There is several consequences of our proposal:
* The receiver can bump the fee of the original transaction.
* The receiver can modify the outputs of the original PSBT.
* The sender must provide the UTXO information (Witness or previous transaction) in the PSBT.
===Respecting the minimum relay fee policy===
To be properly relayed, a Bitcoin transaction needs to pay at least 1 satoshi per virtual byte.
When blocks are not full, the original transaction might already at the minimum relay fee rate (currently 1 satoshi per virtual byte), so if the receiver adds their own input, they need to make sure the fee is increased such that the rate does not drop below the minimum relay fee rate.
In such case, the sender must set both <code>maxadditionalfeecontribution=</code> and <code>additionalfeeoutputindex=</code>.
===Defeating heuristics based on the fee calculation===
Most wallets are creating a round fee rate (like 2 sat/b).
If the payjoin transaction's fee was not increased by the added size, then those payjoin transactions could easily be identifiable on the blockchain.
Not only would those transactions stand out by not having a round fee (like 1.87 sat/b), but any suspicion of payjoin could be confirmed by checking if removing one input would create a round fee rate.
Because the receiver needs to bump the fee to keep the same fee rate as the original PSBT, it needs the input's UTXO information to know what is the original fee rate. Without PSBT, light wallets like Wasabi Wallet would not be able to receive a payjoin transaction.
The validation (policy and consensus) of the original transaction is optional: a receiver without a full node can decide to create the payjoin transaction and automatically broadcast the original transaction after a timeout of 1 minute, and only verify that it has been propagated in the network.
This is not a concern for interactive receivers like Wasabi Wallet, because those receivers can just limit the number of original PSBT proposals of a specific address to one. With such wallets, the attacker has no way to generate new deposit addresses to probe the UTXOs.
Small change inside wallets are detrimental to privacy. Mixers like Wasabi wallet, because of its protocol, eventually generate such [[https://docs.wasabiwallet.io/using-wasabi/ChangeCoins.html#first-round-coinjoin-change|small change]].
A common way to protect your privacy is to donate those spare changes, to deposit them in an exchange or on your favorite merchant's store account. Those kind of transactions can easily be spotted on the blockchain: There is only one output.
However, if you donate via payjoin, it will look like a normal transaction.
On top of this the receiver can poison analysis by randomly faking a round amount of satoshi for the additional output.
Unless disallowed by sender explicitely via `disableoutputsubstitution=true` or by the BIP21 url via query parameter the `pjos=0`, the receiver is free to decrease the amount, remove, or change the scriptPubKey output paying to himself.
Note that if payment output substitution is disallowed, the reveiver can still increase the amount of the output. (See [[#reference-impl|the reference implementation]])
For example, if the sender's scriptPubKey type is P2WPKH while the receiver's payment output in the original PSBT is P2SH, then the receiver can substitute the payment output to be P2WPKH to match the sender's scriptPubKey type.
A receiver might run the payment server (generating the BIP21 invoice) on a different server than the payjoin server, which could be less trusted than the payment server.
In such case, the payment server can signal to the sender, via the BIP21 parameter <code>pjos=0</code>, that they MUST disallow [[#output-substitution|payment output substitution]].
Our proposal of payjoin is breaking the following blockchain heuristics:
* Common inputs heuristics.
Because payjoin is mixing the inputs of the sender and receiver, this heuristic becomes unreliable.
* Change identification from scriptPubKey type heuristics
When Alice pays Bob, if Alice is using P2SH but Bob's deposit address is P2WPKH, the heuristic would assume that the P2SH output is the change address of Alice.
This is now however a broken assumption, as the payjoin receiver has the freedom to mislead analytics by purposefully changing the invoice's address in the payjoin transaction.
If Alice pays Bob, she might be tempted to pay him a round amount, like <code>1.23000000 BTC</code>. When this happens, blockchain analysis often identifies the output without the round amount as the change of the transaction.
When the receiver creates a payjoin proposal, they expose one or more inputs belonging to them.
An attacker could create multiple original transactions in order to learn the UTXOs of the receiver, while not broadcasting the payjoin proposal.
While we cannot prevent this type of attack entirely, we implemented the following mitigations:
* When the receiver detects an original transaction being broadcast, or if the receiver detects that the original transaction has been double spent, then they will reuse the UTXO that was exposed for the next payjoin.
* While the exposed UTXO will be reused in priority to not leak other UTXOs, there is no strong guarantee about it. This prevents the attacker from detecting with certainty the next payjoin of the merchant to another peer.
Note that probing attacks are only a problem for automated payment systems such as BTCPay Server. End-user wallets with payjoin capabilities are not affected, as the attacker can't create multiple invoices to force the receiver to expose their UTXOs.
===On the sender side: Double payment risk for hardware wallets===
For a successful payjoin to happen, the sender needs to sign two transactions double spending each other: The original transaction and the payjoin proposal.
The sender's software wallet can verify that the payjoin proposal is legitimate by the sender's checklist.
However, a hardware wallet can't verify that this is indeed the case. This means that the security guarantee of the hardware wallet is decreased. If the sender's software is compromised, the hardware wallet would sign two valid transactions, thus sending two payments.
Without payjoin, the maximum amount of money that could be lost by a compromised software is equal to one payment (via [[#output-substitution|payment output substitution]]).
Note that the sender can disallow [[#output-substitution|payment output substitution]] by using the optional parameter <code>disableoutputsubstitution=true</code>.
<code>RequestPayjoin</code> takes the bip21 URI of the payment, the wallet and the <code>signedPSBT</code>.
The <code>signedPSBT</code> represents a PSBT which has been fully signed, but not yet finalized.
We then prepare <code>originalPSBT</code> from the <code>signedPSBT</code> via the <code>CreateOriginalPSBT</code> function and get back the <code>proposal</code>.
While we verify the <code>proposal</code>, we also import into it informations about our own inputs and outputs from the <code>signedPSBT</code>.
At the end of this <code>RequestPayjoin</code>, the proposal is verified and ready to be signed.
We logged the different PSBT involved, and show the result in our [[#test-vectors|test vectors]].
Special thanks to Kukks for developing the initial support to BTCPay Server, to junderw, AdamISZ, lukechilds, ncoelho, nopara73, lontivero, yahiheb, SomberNight, andrewkozlik, instagibbs, RHavar for all the feedback we received since our first implementation.
