Nostr Protocol Offers Improved Bitcoin Privacy & Scalability

• Nostr is a new communication protocol developed in 2021 which enables smart clients and dumb servers, increasing censorship resistance for users.
• In December 2022, the Nostr community received a 14 BTC grant from Twitter Founder Jack Dorsey, bringing unprecedented attention to the protocol.
• The Nostr protocol could bring improvements to Bitcoin privacy such as BIP47 and improve scalability while protecting user privacy.

What is Nostr?

Nostr, short for “Notes and other stuff transmitted through relays,” is a new communication protocol developed in 2021 by Lightning Network developer fiatjaf, which evolved out of LNBits developer Ben Arc’s attempt at a fully-decentralized marketplace called Diagon Alley. As opposed to other communication solutions, which mostly function via dumb clients and smart servers, Nostr offers smart clients and dumb servers, which heightens censorship resistance for users.In Nostr, all data is stored locally with users and merely distributed via relays, rather than stored on central servers, such as via Twitter. In the case of social media, Nostr increases censorship resistance, as users are enabled to fully own their own content and profiles.

The Attention Around Nostr

In light of recent controversies around Twitter’s censorship policies, users began migrating toward the federated communications solution Mastodon. However, in Mastodon, ownership over content and profiles lies with those running the Mastodon servers users signed up with. While federations such as Mastodon offer more censorship resistance than centralized servers — as users are able to simply sign up to another server when censored — criticism has arisen around potential censorship on Mastodon through server owners. In December 2022, the Nostr community received a 14 BTC grant from Twitter Founder Jack Dorsey, which brought unprecedented attention to the protocol. As applications built on Nostr evolved, the mobile client Damus jumped to number one in social networking on the iOS app store in China, resulting in its ban. In an apparent effort to contain the #MarchOffTwitter Movement , Twitter CEO Elon Musk shortly banned the publication of Nostr-related content along with bans on other third-party platforms such as Instagram; however this was ineffective in suppressing interest around it .

Privacy Protection

A public key shared via Twitter in 2022 Although Nostr is not a privacy protocol per se — among other issues , clients by default leak users’ IP addresses to relays — it can still contribute greatly towards privacy protection . The Nostr protocol can bring improvements to Bitcoin privacy , particularly BIP47 , which creates reusable payment codes while protecting user privacy . Without BIP47 , people needlessly generate new addresses by hand every time they make a transaction , leading them vulnerable address reuse . Reusing an address allows anyone watching blockchain cluster all transactions belonging that address form graph user’s payment history . By implementing BIP47 , reusing same address multiple times without compromising individual’s personal information .

Improvement Of Scalability

In addition providing better privacy protections for Bitcoin transactions , using BIP47 also has potential increase scalability Bitcoin network . Currently each transaction requires miners confirm order include transaction valid block chain . With BIP47 however , miners only need confirm single code generated once then reused many times across different transactions within single block chain ; therefore reducing amount work miners need perform increase speed bitcoin transactions occur .


Overall , introducing refined version existing protocols like BIP47 into networks like nostril could provide both significant increase security well improvement scalability of entire system overall . This would create safer environment individuals operate free fear data being leaked malicious actors government entities alike gain access sensitive information finances etc …