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If on-chain data is useless why are best practices before opening and after closing channels to coinjoin? Although better than purely transacting on Bitcoins blockchain, that is an obvious drawback of building a privacy layer on a transparent blockchain. That's one of it's weak links. For best possible privacy you would build a privacy L2 on an encrypted blockchain.

Not sure what you're implying with the view keys thing

Elephant in the root 11mo ago 💬 2

It's not best practice universally. E.g. if you got your coins completely anonymously CJ before LN channel open is useless. Similarly, if you're going to open another channel with the closed UTXO CJ won't help you much. The key thing here is you could transact billions in Bitcoin inside $1000 channel and after you close it noone would know.

View keys in Monero allow anyone posessing them to see the entire transaction history. Popular Monero wallets used by random people simply leak them to centralized server.

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Discussion

Saberhagen The Nameless 11mo ago

Anything I've ever read or listened to go over basics of privacy on Lightning always recommends CJing before opening channels. And presumably if you're running your own LN node, the most private way to use Lightning, you would be doing that.

I feel like all this is moot though because thats not how the vast majority use it they're all on custodians like WoS that see everything.

The view key thing already assumes you're protecting those keys the same way you would protect your xpubs or private keys for Bitcoin/Lightning. Unless you think that applies to those as well for any wallet and crypto?

What popular wallets are leaking view keys?

The most popular wallets are all non-custodial and your wallet syncs the chain (Cake, Monerujo, Stack, Feather, CLI/GUI, etc)

Even if using someone elses node they can't see your view keys so no clue what you're talking about

Node Runner 11mo ago 💬 2

If best practice is to coin join before opening a channel, and after closing your channel, what about things like boltz.exchange swapping out btc to and from your channel?

Saberhagen The Nameless 11mo ago

Are you really asking me or do you know the answer? I don't know but I'm interested what the answer is

Node Runner 11mo ago

I really don't know, but it seems like payjoin might be a better solution if your coins are kyc'd. Coinjoins don't give you plausible deniability.