I've just finished writing an implementing of this, and extremely happy with 
how it turned out. So I'd like to go and try go down the path of more formally 
describing it and getting some comments and ultimately encourage its 
wide-spread use.


The way bitcoin transactions are overwhelming used is known to leak more
information than desirable. This has lead to fungibility concerns in bitcoin
and a raise of unreasonably effective blockchain analysis.

Bustapay proposes a simple, practical way to bust these assumptions to immediate
benefit of the sender and recievers. Furthermore it does so in such a way that
helps recievers avoid utxo bloat, a constant problem for bitcoin merchants.


This BIP is in the public domain.


One of the most powerful heuristic's employed by those whose goal is to 
bitcoin's fungiblity has been to assume all inputs of a transaction are signed 
a single party. In the few cases this assumption does not hold, it is generally
readibly recognizable (e.g. traditional coinjoins have a very obvious structure,
or multisig outputs are most frequently validated onchain).

Bustapay requires no changes to bitcoin and creates bitcoin transactions that 
indistinguishable from normal ones.

It is worth noting that this specification has been intentionally kept as simple
as possible to encourage adoption. There are almost an endless amount of 
possible but the harder the implementation of clients/server the less likely it
will ever be done. Should bustapay enjoy widespread adoption, a "v2" 
will be created with desired extensions.


A bustapay payment is made from a sender to a receiver.

Step 1. Sender creates a bitcoin transaction paying the receiver

This transaction must be fully valid, signed and all inputs must use segwit. 
This transaction is known as the "template transaction". This transaction must 
not be propagated on the bitcoin network.

Step 2. Sender gives the "template transaction" to the receiver

This would generally be done as an HTTP POST. The exact URL to submit it to 
could be specified with a bip21 encoded address. Such as 
 and the HTTP body should be the raw transaction hex encoded as text.

Step 3. Receiver processes the transaction and returns a partially signed 

The receiver validates the transaction is valid, pays himself and is eligible 
for propation. The receiver then adds one of his own inputs (known as the 
"contributed input") and increase the output that pays himself by the 
contributed input amount. Doing so will invalidate the "template transaction"'s 
original input signatures, so the sender needs to return this "partial 
transaction" back to the receiver to sign. This is returned as a hex-encoded 
raw transaction a response to the original HTTP POST request.

Step 4. Receiver validates, re-signs, and propagates on the bitcoin network

The receiver is responsible in making sure the "partial transaction" returned 
by the sender was changed correctly (it should assume the connection has been 
MITM'd and act accordingly), resign its original inputs and propagates this 
transaction over the bitcoin network. The client must be aware that the server 
can reorder inputs and outputs.

Step 5. Receiver observes the finalized transaction on the bitcoin network

Once the receiver has seen the finalized transactions on the network (and has 
enough confirmations) it can process it like a normal payment for the sent 
amount (as opposed to the amount that it looks like on the network). If the 
receiver does not see the finalized transaction after a timeout will propagate 
the original "template transaction" to ensure the payment happens and function 
a strong anti-DoS mechanism.

=== Implementation Notes ===
For anyone wanting to implement bustapay payments, here are some notes for 

* A transaction can easily be checked if it's suitable for the mempool with 
testmempoolaccept in bitcoin core 0.17
* Tracking transactions by txid is precarious. To keep your sanity make sure 
all inputs are segwit. But remember segwit does not prevent txid malleability 
unless you validate the transaction. So really make sure you're using 
testmempoolaccept at the very least
* Bustapay could be abused by a malicious party to query if you own a deposit 
address or not. So never accept a bustapay transaction that pays an already 
used deposit address
* You will need to keep a mapping of which utxos people have showed you and 
which you revealed. So if you see them again, you can reveal the same one of 
your own
* Check if the transaction was already sorted according to BIP69, if so ensure 
the result stays that way. Otherwise probably just shuffle the inputs/outpus

Notes for sending applications:

* The HTTP response must *not* be trusted. It should be fully validated that no 
unexpected changes have been made to the transaction.
* The sender should be aware the original "template transaction" may be 
propagated at any time, and in fact can intentionally be
  done so for the purpose of RBF as it should have a slightly higher fee rate.

== Credits ==
The idea is obviously based upon Dr. Maxwell's seminal CoinJoin proposal, and 
reduced scope inspired by a simplification of the "pay 2 endpoint" (now 
offline) blog post by blockstream.

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