Been checking out the splicing feature in the Phoenix wallet. So, does it actually erase the on-chain BTC trail? Here's what I'm thinking:
1. You send BTC to a Phoenix deposit address. This kicks off an on-chain splice-in that locks funds in a Lightning channel.
2. The cash stays in that Lightning channel for as long as you want.
3. When you pull it out to another address, it triggers an on-chain splice-out. What do you guys think?
Splicing by itself doesn’t hide the BTC trail! Sure, if they add some blinded paths in the future, it might change things. But right now, splicing creates on-chain footprints that can be tracked. That's not privacy, just a way to move funds.
Edit: Wow, what was I even saying before?
You’re just keeping everything in one Lightning channel managed by ACINQ and your wallet. How is that even private?
If you’re serious about privacy, send funds to different recipients through varied channels a bunch of times, then merge them back later. And for the love of crypto, don’t use the same counterparty channels!