Date: Mon, 22 Apr 2019 17:06:43 +0000
To: ZmnSCPxj <ZmnSCPxj@protonmail.com>,
	Bitcoin Protocol Discussion <bitcoin-dev@lists.linuxfoundation.org>
From: ZmnSCPxj <ZmnSCPxj@protonmail.com>
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Subject: Re: [bitcoin-dev] Payjoin2swap: Enabling Payjoin Without Merchant
	Purchases
Precedence: list

Good morning list,

I observe that if the Lightning Network supports:

1.  Wumbo channels (>167.772215mBTC channels)
2.  Dual-funded channels

Then payjoin2swap is implementable using LN operations.
Given two UTXOs V and W you want to transfer some value S from V to W.

1.  Connect to an LN node on Tor and listen to gossip, then disconnect.
2.  Create two fake node addresses (A and B) and assign a unique Tor hidden=
 service to each.
3.  Select two actual LN nodes with long uptime (use the lifetime of the ch=
annels they have as a rough estimate) and a short distance between them wit=
h good capacity and many alternate routes between them.
4.  Connect A to one node and create a channel using V.
    Indicate that the channel should be unpublished (the LN protocol has a =
flag existing for this already).
    Publishing channels is good for privacy if you intend to stay long on L=
N (it invites "normal" traffic to hide your own payments in), but we do not=
 intend to stay long on LN here, so keep the channels unpublished.
5.  Connect B to the other node and create a channel with dual-funding, req=
uesting at least S from the other node to put in the channel, using W as yo=
ur own UTXO.
    Again indicate the channel should be unpublished.
6.  Transfer S satoshi over LN from the channel of A to the channel of B.
7.  Cooperatively close both channels.
    It is possible to time the closes to be some blocks apart to make them =
harder for blockchain analysis to link.

This rides payjoin2swap on top of existing infrastructure.
The drawback is that it is unlikely that existing LN implementations will a=
pply ZeroLink for onchain funds, since much of the privacy on LN is with pa=
ying over the long-lived offchain channels.
This can erode privacy if either of the nodes you connect to uses the resul=
t of the cooperative closes to later fund a published channel, possibly mix=
ing it with other coins of their own.

Regards,
ZmnSCPxj