The cities with the longest distance between them would provide the biggest time advantage, says Haug, who notes that if successful it’s likely that such neutrino technology would be quickly adapted between every major financial market.īut Haug says financial info-tech companies could also be interested since they would likely be assured of getting a full return on their investment. Transacting with wallets which use the Neutrino protocol means that your bitcoin transactions, whether on-chain or on the Lightning Network, will be a little less susceptible to leaking information.Communication times between financial centers. Privacy leaks are ultimately security leaks as information about you can be used against you.
This does not mean that you’ll have complete anonymity, especially from chain analysis, but you will be able to achieve a large portion of the privacy that full nodes currently enjoy without storing, transmitting or verifying the entire blockchain. And that means that your bitcoin wallet will be far more effective in preserving privacy. Once Neutrino arrives to Bitcoin Core, Lightning Wallets will be able to run as a light client much more easily. It is for this reason that Wasabi has had to make their own servers with similar super-compressed block data. Neutrino is available in btcd, but not in Bitcoin Core yet, so until it’s available in Bitcoin Core, light wallets are going to have a tough time finding nodes to get data from. Setting up a Lightning node is currently difficult, in part because you have to run a full node which takes a long time to sync. It turns out that Neutrino is not just useful for Bitcoin wallets, it's also useful for Lightning. For sending money, however, Neutrino doesn't really help and there are a lot of privacy concerns there still (though Tor and Dandelion can help). Usually, these are transactions where the wallet is receiving money. Privacy is preserved while looking for transactions that the wallet has participated in.
Neutrino messaging verification#
Assuming about one transaction per day, that's about 100 bytes per block overall for BIP0037, which means Neutrino is more expensive from a bandwidth standpoint.įurther, there is more validation to do on the client side as the client now has to do additional verification to prove that the data sent by the server is true. While 1.4MB to 20KB is a pretty large reduction in bandwidth, BIP0037 allowed an even bigger reduction as servers only transmitted about 3KB of data for blocks where there were transactions the wallet participated in and only 80 bytes for blocks without such transactions. First, there's more data being sent back and forth. Of course, by adding privacy, we do have some trade-offs to consider. It turns out the server can know a lot about the light wallet (like what balance it might have, whom its transacting with, possibly even what it's buying) by looking for certain kinds of patterns. In addition, there are denial-of-service vectors (by having to run lots of filters) to exploit servers that respond to BIP0037 requests.įurthermore, the privacy aspects of BIP0037 turned out to not be as strong as was thought. The Mycelium wallet calls servers that the Mycelium company runs. The Electrum wallet, for example, uses its own proprietary protocol which isn't privacy-preserving. Among others, it was seen as being difficult to implement and most light wallets have opted to use something else. Unfortunately, BIP0037 has a few drawbacks. The client then verifies the proof and looks at the transactions to see if any of them belong to the wallet. The server then runs the filter over all the transactions of a new block and reports back those transactions, along with proof that they're in the block, to the client. To achieve this, the light client gives the server a filter.
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