Anonymous payment once again becomes a subject of interest for Bitcoin proponents

The technology which has enabled virtual currency to attract the attention of global regulators and make its way into the mainstream has been an instrumental factor in elevating the image of virtual currency from association with illicit trade and unbacked, unpredictable price swings to global acceptance.

As 2014 subsides, a year in which many venture capital funds invested in Bitcoin technology whilst British, American and Swiss regulators embraced it as a future global currency, the anonymity of those wishing to participate in electronic commerce without their identity being revealed is yet again being explored, this time in the form of a method which is dubbed stealth payments.

Stealth payments are a technique for protecting the privacy of recipients in a Bitcoin transaction.

Standard transactions are pseudonymous. ECDSA key pairs abstract the identity of users. No mechanism exists to hide or encrypt standard transaction information in the block chain.

With stealth payments the exception, full transaction history is available for every Bitcoin address. A service like is able to calculate balances this way.

Conceptualized for Bitcoin by Peter Todd, but first mentioned in ByteCoin, Stealth Transactions enable stealth payments. The data for these payments is public, however, using a little cryptographic resourcefulness, the transaction remains anonymous.

A standard Bitcoin transaction contains a list of inputs and a list of outputs. In a stealth payment, the transaction outputs come in pairs, and the first output contains stealth metadata. The recipient of the payment combines their stealth keys with the metadata to generate a private key.

The second output is the same as a standard transaction’s output. However, in a stealth payment, the second output is paid to the address for the private key hidden in the first output’s metadata.

A report today by Cryptocoinsnews explains the detailed functionality of such payments, which can be read in full by clicking here.

Photograph courtesy of

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