DIP: aj-hd-mixing

Author: coolaj86

dip-aj-hd-mixing.md

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+<pre>
+  DIP: aj-hd-mixing
+  Title: Coin Mix Tracking in HD Wallets via HDPath
+  Authors: coolaj86
+  Special-Thanks: Rion Gull
+  Comments-Summary: No comments yet.
+  Status: Draft
+  Type: Standard
+  Created: 2023-06-28
+  License: CC0-1.0
+</pre>
+
+## Table of Contents
+
+- [Table of Contents](#table-of-contents)
+- [Abstract](#abstract)
+- [Prior Art](#prior-art)
+- [Motivation](#motivation)
+- [Specification](#specification)
+  - [Coin Mix Tracking via HDPath](#coin-mix-tracking-via-hdpath)
+- [Other Considerations](#other-considerations)
+- [Copyright](#copyright)
+
+## Abstract
+
+This DIP proposes to track "coin mixing" in HD Wallets using the HDPath.
+
+keywords: CoinJoin PrivateSend mobile coin mixing mix hdpath mixpath
+
+## Prior Art
+
+- [Multi-Account Hierarchy for Deterministic Wallets](https://github.com/bitcoin/bips/blob/master/bip-0044.mediawiki)
+
+## Motivation
+
+Currently there's no strategy for tracking "coin mixing" on mobile devices, or
+sharing "coin mixing" enabled wallet accounts between devices - such as in the
+case where a second device should do the mixing because the mobile device cannot
+reasonably do so.
+
+Preferably we want a strategy that doesn't require syncing indexes, especially
+not in one-off formats.
+
+This solves all of those problems with minimal complexity.
+
+This won't break any existing wallets - those that are unaware of mixing will
+still be aware - and will enable shared data via an offline indexing scheme
+protocol rather than requiring a new or custom format or online synced data.
+
+## Specification
+
+[lextx]: https://github.com/bitcoin/bips/blob/master/bip-0069.mediawiki
+
+[Lexicographical Indexing of Transaction Inputs and Outputs][lextx] MUST be used
+for all mixing transactions.
+
+The _Usage_ component (at index 4) of the HDPath is designated for tracking coin
+mixes for mixed accounts.
+
+HDPaths are used in this format:
+
+```text
+m/<bip44>'/<coin>'/<account>'/<mixcount>/<index>
+m/44'/5'/0'/0/0
+```
+
+Accounts should be designated as either Mixed or Unmixed. However, if any path
+in the format of `m/44'/5'/<account>'/0/<index>` has only a single coin which is
+a recognizable denomination, it should be searched from
+`m/44'/5'/<account>'/1/<index>` up through `m/44'/5'/<account>'/<n>/<index>` to
+the first unused address to find unspent mixed, denominated coins.
+
+### Coin Mix Tracking via HDPath
+
+**Summary of BIP-44**
+
+The index to a particular private key or address of an HDPath is defined in this
+format:
+
+```text
+m/<bip44>'/<coin>'/<account>'/<usage>/<index>
+m/44'/5'/0'/0/0
+```
+
+The _Usage_ path component is presently used to indicate either:
+
+- `0` as _External_, for sending money
+- `1` as _Internal_ for receiving change
+
+**Applied to Coin Mixing**
+
+There are many factors that effect the viability of coin mixing, so for this
+specification and these examples we'll make 2 assumptions:
+
+1. mixed coins are generally not used in a scenarios where change is returned
+2. any return change is denominated and its transaction adheres to
+   [Lexicographical Indexing of TX Inputs & Outputs][lextx]
+
+Given those assumptions either A) _Usage_ will _never_ represent return change
+or B) the return change will already have some measure of entropy added to it.
+
+This means that the _Usage_ path can be used in for tracking the mix count with
+coming into conflict with unmixed coins.
+
+```text
+m/<bip44>'/<coin>'/<account>'/<mixcount>/<index>
+m/44'/5'/0'/0/0 - newly denominated coin
+m/44'/5'/0'/1/0 - coin which has been mixed once
+m/44'/5'/0'/...
+m/44'/5'/0'/16/0 - a fully mixed coin
+m/44'/5'/0'/... - an overmixed coin
+```
+
+## Other Considerations
+
+1.  Mixed accounts could be designated to start at 2147483648 and count _down_
+    rather than starting at 0 and counting up.
+    ```text
+    m/44'/5'/2147483648'/0/0 - newly denominated coin on first mixed account
+    m/44'/5'/2147483647'/0/0 - newly denominated coin on second mixed account
+    ```
+    Counterpoint: More complexity, no benefit. Software either will or won't be
+    able to restore mixed accounts. This doesn't help.
+2.  A new HDPath designation path could be introduced.
+    ```text
+    m/dipXX'/5'/0'/0/0
+    ```
+    Counterpoint: Software that follows the 44' spec can still follow this spec,
+    so changing the identifier probably only makes it more difficult to adapt
+    otherwise working software. DASH software will know to check for mixed
+    funds.
+3.  A new HDPath component could be introduced.
+    ```text
+    m/<bip44>'/<coin>'/<account>'/<usage>/<index>/<mixcount>
+    m/dipXX'/5'/0'/0/0
+    ```
+    Counterpoint: Same as above, but more so.
+
+## Copyright
+
+Copyright 2023 AJ ONeal.
+
+DIP to Secure Transactions - Patch Data Leak Vulnerability via Deterministic
+Index Ordering
+
+Written in 2023 by AJ ONeal <coolaj86@proton.me> \
+To the extent possible under law, the author(s) have dedicated all copyright \
+and related and neighboring rights to this software to the public domain \
+worldwide. This software is distributed without any warranty. \
+
+You should have received a copy of the CC0 Public Domain Dedication along with \
+this software. If not, see <https://creativecommons.org/publicdomain/zero/1.0/>.