BIP47 Bitcoin Payment Code: Invisible Bitcoin Address, Making Bitcoin Transactions Untraceable

Samourai Wallet developers officially launched the beta version of the Payment Code directory directory last week. Reusable payment codes can improve the privacy of Bitcoin transactions and have greater usefulness.

What is a Bitcoin payment code?

The advent of highly private Bitcoin payment codes for hierarchical deterministic (HD) wallets dates back to 2015, when Bitcoin developer and engineer Justus Ranvier wrote Bitcoin Improvement Proposal 47 (BIP47) to define the technology used to create payment codes.

According to its definition:

“PayTokens are a technology for creating permanent Bitcoin addresses that can be reused and publicly associated with a real-life identity while maintaining financial privacy. They are similar to stealth addresses, but involve some tradeoffs and features that make them more practical.

Last year, Samourai Wallet became the first company to create a full implementation of the BIP payment code, which aims to bring more privacy to public Bitcoin payments.

The payment code is longer than the Bitcoin address and can only be generated in a wallet that supports BIP47. Currently, only the Samourai Wallet has this function.

The sender and receiver of Bitcoin need the Samourai Android wallet to use this feature. The Samourai website explains that when sending Bitcoin using a payment code, a payment channel will be created between the two wallets by sending a special transaction called a "broadcast transaction" on the blockchain. This "broadcast transaction" only requires one network confirmation.

Payment Code Directory

Last week, the startup announced the beta launch of Payment Code.io, a searchable directory of public and reusable payment codes.

Anyone can register for the directory using just an email address, and in the future all users will be able to add their own payment codes and personal information of their choice, such as name, social account and avatar, to the directory.

Using this payment code directory, everyone's payment code can be searched by name, social account username or email address. By scanning the QR code, Bitcoin will be able to send Bitcoin directly. No addresses will be shared or reused, which will make transactions impossible to track.

If other types of Bitcoin wallets introduce BIP47 payment codes in the future, users of these wallets can also add their own payment codes to this directory, making it the central directory for all users' payment codes.

Why use payment code?

Publishing a Bitcoin address online, such as on a forum or social media page, is hardly private, as anyone can track the transaction history associated with that address. A payment code can be publicly associated with an identity without letting anyone track the transaction history of that address. This creates an alternative to Bitcoin addresses that can be made public without Bitcoin users facing any privacy issues.

Raniver explained that users can send bitcoin to a specific bitcoin address, and the recipient can "see the sender's payment code and send bitcoin back, just like replying to an email." Therefore, payment codes are a good option for people who want to receive bitcoin privately. He pointed out:

“You can make your Bitcoin payment code public just like you would make your email address public. Even if everyone knows your payment code, no one can monitor the blockchain to see how much Bitcoin you have received or which Bitcoin transactions are yours.”