Newsletters: add 62 (2019-09-04)

_posts/en/newsletters/2019-09-04-newsletter.md

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+---
+title: 'Bitcoin Optech Newsletter #62'
+permalink: /en/newsletters/2019/09/04/
+name: 2019-09-04-newsletter
+slug: 2019-09-04-newsletter
+type: newsletter
+layout: newsletter
+lang: en
+---
+This week's newsletter relays a security announcement for LN
+implementations, describes a non-interactive coinjoin proposal, and
+notes a few changes in popular Bitcoin infrastructure projects.
+
+{% comment %}<!-- include references.md below the fold but above any Jekyll/Liquid variables-->{% endcomment %}
+{% include references.md %}
+
+## Action items
+
+- **Upgrade LN implementations:** one or more issues that are scheduled
+  to be disclosed at the end of this month affect older LN
+  implementations.  If you are using any of the following software
+  versions, upgrading to a more recent version is [strongly
+  recommended][cve ln]:
+
+    - C-Lightning < 0.7.1
+    - LND < 0.7
+    - Eclair <= 0.3
+
+## News
+
+- **SNICKER proposed:** Adam Gibson [posted][snicker email] to the Bitcoin-Dev mailing
+  list with a [proposal][snicker] for *Simple Non-Interactive Coinjoin
+  with Keys for Encryption Reused* (SNICKER), a method for
+  allowing wallets to create coinjoins non-interactively in two steps, a
+  *proposer step* and a *receiver step*.  In the proposer step,
+  Alice's wallet uses the block chain and UTXO set to find UTXOs for
+  which she knows (or can infer) the owner's public key.
+  She selects one of those UTXOs whose value is less than the amount
+  controlled by her wallet and creates a proposed coinjoin between that
+  UTXO and her wallet's UTXOs, producing three outputs:
+
+  1. Coinjoin output to Alice
+
+  2. Coinjoin output to the owner of the selected UTXO (Bob).  Both
+     coinjoin outputs pay the same amount to make them indistinguishable
+     to third parties looking at the block chain
+
+  3. Change output to Alice returning any of her money in excess of the
+     coinjoin amount
+
+  Addresses that already have transaction history can't be reused or the
+  privacy benefits of coinjoin are lost, so Alice generates new unique
+  addresses for her two outputs.  However, Bob has no way in this
+  non-interactive protocol to tell Alice what addresses to use for his
+  output.  Instead, Alice can use Bob's public key and [Elliptic Curve
+  Diffie-Hellman][ECDH] (ECDH) to derive a shared secret that Bob will
+  also be able to derive from Alice's public key.  With the shared
+  secret and Bob's public key, Alice is able to create a new public key
+  that only Bob can sign for.  That new public key is used to create the
+  new address for Bob's coinjoin output.  No one besides Alice and Bob
+  can tell the difference between the addresses, ensuring privacy for
+  the coinjoin.
+
+  With information about the inputs and the outputs, Alice creates a
+  [BIP174][] Partially-Signed Bitcoin Transaction (PSBT) containing the
+  signatures for her UTXO or UTXOs.  She can then upload this PSBT to a
+  public server (and she can encrypt it so that only Bob can decrypt it).
+  This completes the proposer step in SNICKER.
+
+  If Bob participates in the scheme, his wallet can begin the
+  receiver step by periodically checking the server to see if
+  anyone like Alice has sent him a proposed PSBT.  If so, Bob can
+  evaluate the PSBT to ensure it's correct, add his signature for his
+  UTXO to finalize it, and broadcast the transaction to complete the
+  coinjoin.
+
+  The key advantage of this proposal is that no interaction is required
+  between Alice and Bob.  They each perform their steps independently
+  and aren't limited by having each other as potential partners.  Alice
+  can create as many proposals as she wants at no cost (except server
+  storage space) and Bob can receive multiple proposals from different
+  people via a variety of servers, selecting whichever proposal he
+  prefers (or none at all).  Either party can also spend their UTXO
+  normally at any time, automatically invalidating any pending proposals
+  without any harm done.  The PSBTs can be exchanged using any medium that doesn't require users to identify themselves,
+  such as a via a simple FTP server over Tor, making it easy for anyone to host a
+  SNICKER exchange server.
+
+  The main downside of the proposal is that it requires the proposer
+  (Alice) know the public key of the receiver (Bob).  Almost all
+  transaction outputs today pay addresses that don't directly include public keys,
+  although that may change if the proposed [taproot][bip-taproot]
+  soft fork is activated and becomes widely adopted.  In the meantime,
+  the SNICKER proposal suggests scanning for reused addresses where public keys
+  have been revealed via the block chain, or by using a public key
+  from the input of a transaction that creates a UTXO.  For a more
+  detailed overview of the proposal, see [Gibson's blog post][snicker
+  blog].
+
+## Notable code and documentation changes
+
+*Notable changes this week in [Bitcoin Core][bitcoin core repo],
+[LND][lnd repo], [C-Lightning][c-lightning repo], [Eclair][eclair repo],
+[libsecp256k1][libsecp256k1 repo], [Bitcoin Improvement Proposals
+(BIPs)][bips repo], and [Lightning BOLTs][bolts repo].*
+
+- [C-Lightning #3002][] makes several small changes to comply with
+  recent updates to the [LN specification][BOLTs], including the
+  [BOLT4][] update to remove the `final_expiry_too_soon` error message
+  as described in [last week's newsletter][bolts608].
+
+- [Eclair #899][] implements extended queries as proposed in [BOLTs
+  #557][], allowing an LN node to request only gossip updates that
+  arrived after a certain time or which have a different checksum than
+  those the node has already seen.
+
+- [Eclair #954][] adds a sync whitelist.  If empty, the node will sync
+  its gossip store with any peer. If not empty, the node will only sync
+  with the specified peers.
+
+{% include linkers/issues.md issues="3002,899,557,954" %}
+
+[cve ln]: https://lists.linuxfoundation.org/pipermail/lightning-dev/2019-August/002130.html
+[bolts608]: /en/newsletters/2019/08/28/#bolts-608
+[bolts]: https://github.com/lightningnetwork/lightning-rfc/
+[snicker]: https://gist.github.com/AdamISZ/2c13fb5819bd469ca318156e2cf25d79
+[ecdh]: https://en.wikipedia.org/wiki/Elliptic_curve_Diffie-Hellman
+[snicker email]: https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2019-September/017283.html
+[snicker blog]: https://joinmarket.me/blog/blog/snicker/