With a single code, the wallet internally derives a different address for each payment received.
Wireless hardware wallets are now supported; those that connect via USB, not yet.
Sparrow Wallet announced the incorporation of silent payments in its version v2.5.0, released this May 21. With this update, users can share a single fixed receipt code and receive bitcoin (BTC) without anyone, not even the payer, being able to see how many payments entered the account or link them to each other.
In conventional wallets, every time someone shares their address to receive a payment, that address is publicly recorded on the blockchain. If the same person reuses it for several payments (something common), Anyone can track the complete history of that account.
Silent payments solve this automatically: although the user always shares the same code, The wallet internally generates a different address for each transaction received. The history is not exposed because each charge appears in the chain with a different address that cannot be linked to the others. This mechanism eliminates address reuse, a problem that also exposes users to potential quantum attacks in the future.
This new modality also eliminates the gap limit (the limit of consecutive empty addresses that traditional systems tolerate before stopping searching for transactions), an issue that can cause a wallet to ‘lose track’ of real funds when restoring a backup. Silent payment wallets do not have that problem.
Hardware and server support for silent payments
Users with hardware wallets that operate without an internet connection and use QR codes or MicroSD cards can now sign silent payment transactions with this new version of Sparrow Wallet. Devices that connect via USB cable or direct wireless will receive support in a future update, as those manufacturers update their own systems.
To process silent payments, the wallet needs to review the history of the blockchain more intensively than in the conventional scheme: it must calculate, for each recorded transaction, whether any of its combined entries generate an address that corresponds to it.
Version 2.5.0 includes by default a connection to the public server frigate.2140.devspecifically designed to run that calculation remotely and accelerated using the server graphics card: What previously could take an hour is now done in less than half a second, as reported by CriptoNoticias.
Using that server involves sharing the wallet scan keys with it during the session, a privacy concession equivalent to that of any traditional Electrum server that most light Bitcoin wallets already use.
Address reuse is still standard practice in most wallets available today. The incorporation of this protocol in Sparrow, one of the most used desktop programs in the bitcoin ecosystem, is a relevant step so that silent payments are no longer an advanced technical option and become available to any user without additional configuration.