(for background: I did a lot of the design work with Gavin on the payment
protocol and suggested/prototyped using x.509 in the way we do).

So, I'm not a fan of weird hacks involving non-existent domain names.
There's a clean way to implement this and we decided to punt on it for v1
in order to get something shippable, but if you're volunteering ... :) then
indeed having a custom cert type that chains onto the end is the way to go.

It doesn't have to be X.509. It can just be a regular protocol buffer. Even
if we re-used X.509 it wouldn't be accepted by OpenSSL or any other SSL
stack, so it wouldn't buy us anything and it's not like ASN.1 is easy to
work with. Chaining an additional Bitcoin-specific cert onto the end also
solves the problem of delegation ... a lot of merchants are using BitPay
but probably don't want to share their SSL private keys with a third party.
That means today the payments would show up as paid to BitPay Inc which is
misleading and weird, they're just an intermediary. So if the merchant can
run a simple command line tool that you point to the private key, and it
spits out a signed protobuf that contains a new (ecdsa) public key and
saves the private key to a file, then you can send that cert and key off to
your payment processor. The identity is still taken from your CA cert but
the actual signing keys used are different.

Another use case - a company has a lot of roving sales agents, like in a
supermarket or waiters at a restaurant. The company wants the agents to be
able to sign with their corporate EV identity but the agents are not highly
trusted. So they can be issued a 24-hour expiring Bitcoin-specific cert at
the start of each working day and then they sign payment requests with that.
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