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How Crypto Payment Processors Handle Wallet Balance Privacy?

Started by Bitcoin, Apr 01, 2022, 06:22 am

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Bitcoin

How Crypto Payment Processors Handle Wallet Balance Privacy?

If an online store accepts crypto payments directly into its wallet there is a problem:



"Anyone can make a small transfer to any BTC address derived from the MPK so they can watch the store's and its client's funds as soon as the owner transfers funds from her wallet. I suppose possibly that the person who did this wanted to know if cracking the store worth the effort."



In a previous question a user replied that a solution to this is to use a crypto payment processor like BitPay but:




  • How they handle wallet privacy? Isn't it the same? The BTC only gets
    to make a higher number of transactions between different addresses
    but still, they can be traced to the store owner's wallet and her
    client's afaik.


  • Or if the transaction is too small to match the price of the
    purchase, BitPay returns the transaction to the originating address
    and the BitPay address that accepted the transaction gets dumped so
    it can't be used to trace BitPay's customer real address?


  • Another way I think this could be avoided as well is if BitPay
    converts the payment to fiat, then to BTC again and then transfer the
    funds to the customer wallet.


  • Wouldn't it be easier just to avoid payment processors and convert
    the BTC to a privacy coin like Monero? For example using a
    transitional wallet in the store to accept payments, making smaller
    transactions to an exchange, converting to Monero and back to BTC and
    then transfer to the owner's real wallet?


  • Could this method conceal the store owner and her client's wallet
    balance to any potential hacker who makes a small transaction to any
    store wallet MPK derived address?


  • Or the only way is to use a payment processor? If so, then how they
    conceal their customer's wallet balance?




Thanks for your attention, it's a confusing subject for me and I hope to have written my questions as succinctly & understandably as possible.


Source: How Crypto Payment Processors Handle Wallet Balance Privacy?