Bitcoin Optech newsletter #169 is here:

- summarizes a proposal to add transaction heritage identifiers to Bitcoin
- continues the 'how to prepare for taproot' series: output linking
- LND 0.13.3-beta release

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A post by pseudonymous developer John Law was submitted to the Bitcoin-Dev and Lightning-Dev mailing lists. Law proposed a soft fork to add Inherited Identifiers (IIDs) which would allow referencing the txid of a transaction’s ancestor and the position of the outputs leading to the current input. For example, `0123...cdef:0:1` indicates the current transaction input is spending the second child of the first output of txid `0123...cdef`.

After taproot activates, users will begin receiving payments to P2TR outputs. Later, they’ll spend those outputs. In some cases, they’ll make payments to non-P2TR outputs but will still return their change to themselves using a P2TR change output.

It’s easy for an expert or an algorithm observing such a transaction to reasonably infer that the P2TR output is the user’s own change output, making the other output the payment output.

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