Bitcoin doesn’t use typical “accounts.” Instead, with each payment, the funds are sent to a unique “transaction output.” In such an output, the Bitcoin address can potentially be reused, in which case the address would act a bit like a Bitcoin account. Reusing addresses in this way, however, makes it trivial to link different coins and transactions to the same user, which is horrible for privacy. Bitcoin users are instead encouraged to generate a new address for each receiving payment.
While a best practice for privacy, Spanish developer José Femenías Cañuelo believes this isn’t exactly user friendly.
“We are somewhat used to Bitcoin payments the way they are, but it’s really an atrocity,” Cañuelo told Bitcoin Magazine. “It’s like using the internet without domain names, relying only on IP addresses — only worse, because crypto addresses are way longer, uglier and constantly changing.”
To solve this issue, over the past year, the developer figured out how to bolt an account system on top of Bitcoin. Having extensively detailed the idea in a new white paper, Femenías is now proposing his Layer 2 protocol: Easypaysy.
While preserving Bitcoin’s most valuable attributes — such as privacy and self-sovereignty (no need to rely on custodians) — the Spaniard believes his proposal would improve the Bitcoin user experience significantly: It would enable non-repudiation, recurring payments, and more.
Easypaysy Bitcoin Accounts
As a key property of Femenías’ proposal, Easypaysy would not depend on any outside source. Both setting up the account as well as using it all happens on the Bitcoin blockchain itself.
This is possible because an account is created with a special transaction. This transaction has one input (the “sending” half of the transaction), which includes a two-of-two multisignature (multisig) address. This means that two public