RT @BitcoinMagazine: In case you missed it, pseudonymous Lightning developer ZmnSCPxj has proposed self-payments as a way of adding more privacy to Lightning Network transactions.
I recently wrote about Payswap, ZmnSCPxj's simple-but-effective trick to benefit Bitcoin privacy. As mentioned in that article, the idea was actually based on a proposal to improve Lightning privacy.
This follow-up article explains the Lightning version:
That writeup seems to totally ignore onion-layers. In the A-> B -> D example "B" would only know that "next hop is D" he wouldn't know if that was final destination or not. Further, more they don't know if A is sender or not....only that he was previous node.
The point is that onion routing is not sufficient for privacy in case of highly connected, centralized spy nodes.
>But unfortunately, in this example, it would be easy for Bob to correctly assume that Alice paid Dave 3 coins. He knows the amount because he forwarded it, while if Alice wanted to pay Carol, or Carol wanted to pay Dave, they could have done so directly, without depending on Bob as an intermediary.
Love these "outside the box" approaches to solving problems in the ecosystem.
In 20 years, textbooks will have these types of breakthroughs and compare them to innovations such as being able to add/subtract in binary, or asymmetrical cryptography. Maybe not to that degree of innovation that grew ontop of it, but maybe.