Private Overlays with P2PKH Transactions
An index does not have to build its view purely from what is written on chain. This shows how one can track ordinary payments privately, keeping the interesting details off the public record.
Summary
- Why
- Overlay networks need a way to carry private, off-chain information inside transactions that otherwise look like ordinary payments, so that only the intended party can later reveal and use that information.
- What
- BRC-81 describes techniques for hiding private, off-chain data inside standard P2PKH (Pay to Public Key Hash) transactions submitted to BRC-22 overlay networks, without breaking the recipient's ability to spend the funds.
- How
- A user hashes some off-chain secret data and adds that hash to the recipient's real public key to produce the public key actually used in the transaction, then later reveals the secret data to an overlay node so it can recompute the hash, confirm the link, and identify the intended recipient.
What this lets you do
- Encode off-chain secret data into a P2PKH public key without altering spendability
- Reveal a secret later to prove a link to a specific transaction output
- Let an overlay node identify a recipient from revealed off-chain data
- Submit transactions that look like ordinary P2PKH spends while carrying hidden metadata
- Build private access or membership signals on top of BRC-22 overlay tracking
Written by claude-sonnet-5 from the specification text. Where the two differ, the original is correct.
Reference for an AI
Everything an assistant needs to answer questions about BRC-81 accurately, including what it depends on.
The specification
Abstract
In BRC-22 overlay networks, various forms of state tracking for UTXOs can be incorporated. Servers can track UTXOs according to many criteria, enabling many use-cases. There is no fundamental requirement that a server relies on strictly on-chain data for these operations. In this document, we explore the use of off-chain secrets and offset values, enabling private overlay networks to be tracked among transactions that, on the surface, appear only to be normal P2PKH spends. Various models will be explored, from overlay network secrets to data linkages revealed off-chain. All of these methodologies rely on the isomorphic properties of the curve, enabling the owners of the UTXOs to retain spendability rights even when the P2PKH outputs also contain other information stored within offsets from the root key. This information is used to make on-chain record of private, off-chain data, which can later be revealed.
Use Case #1 — Network Access Secrets
In the first use-case, a user sends a transaction to an overlay. The transaction pays some Bitcoins to a P2PKH address. The user reveals the public key to the overlay node at time of transaction submision. The user has computed the pblic key used as follows:
- Take off-chain data (d) and hash it to get h
- Add the hash to the actual recipient key to obtain the final public key
Now the user can also reveal to the overlay node the value for d which produced h, and can identify the party who is receiving it.