A new Bitcoin Improvement Proposal titled “Chain Code Delegation for Private Collaborative Custody” has been opened on the Bitcoin BIPs repository, targeting a long-standing privacy leak in multisig collaborations that rely on shared extended public keys.

The technique, authored by Bitkey engineers and collaborators, with a public explainer from Bitkey, proposes withholding BIP32 chain codes from non-privileged participants so that cosigners can help with recovery and policy enforcement without gaining sweeping visibility into a user’s balances and transaction history. Bitkey says it plans to implement the scheme first if it becomes an accepted standard.

How The BIP Enhances Bitcoin Privacy

The crux of the privacy problem is well known to wallet engineers and custodial partners: in typi

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