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Paykit

Feb 16, 20264 min read

Paykit: Decentralized Payment Protocol (Work in Progress)

⚠️ NOTE: Paykit is currently under active development and is NOT production-ready. The protocol and implementation are subject to significant changes. Integration work in Bitkit serves as a testbed for protocol development.

Overview

Paykit is a payment protocol (work in progress) built on Pubky that aims to enable payment discovery, negotiation, and coordination across multiple payment methods (Bitcoin onchain, Lightning Network, and potentially others).

Core Concept

Paykit abstracts payment complexity behind a single, static Pubky public key. Your public key becomes a universal payment identifier - recipients would discover your available payment methods by querying your Homeserver’s public directory at /pub/paykit.app/v0/.

This enables applications where users pay directly to profiles, offering an intuitive experience when multiple payment methods are possible.

Proposed Architecture (Under Development)

Three-Layer System

  1. Public Directory Layer (paykit-lib)

    • Publish payment methods to Pubky Homeservers
    • Discover methods from other users’ public keys
    • Public read access for discovery

  2. Interactive Payment Layer (paykit-interactive)

    • Encrypted channels using Pubky Noise for private negotiation
    • Receipt exchange and payment coordination
    • End-to-end encrypted communication

  3. Subscription & Automation Layer (paykit-subscriptions)

    • Recurring payment agreements with cryptographic signatures
    • Auto-pay rules with spending limits
    • Payment request system with expiration

Key Features (In Development)

Payment Method Discovery

Query any Pubky identity to discover their available payment methods (onchain, Lightning, or custom).

Encrypted Payment Negotiation

Private channels for payment coordination using Pubky Noise, a Noise Protocol (IK pattern) implementation built for the Pubky ecosystem. This avoids revealing payment details publicly.

Pubky Noise provides:

  • End-to-end encrypted communication channels
  • Three-step IK handshake for secure connections
  • WebSocket and TCP transport support
  • Integration with Pubky identity system

Subscriptions & Recurring Payments

  • Cryptographically signed subscription agreements
  • Flexible billing frequencies (daily, weekly, monthly, yearly)
  • Auto-pay with configurable spending limits
  • Replay protection via nonce tracking

Security Model (Evolving)

Sealed Blob v1 Encryption: Sensitive data on public Pubky paths is encrypted:

  • Payment requests encrypted to recipient’s Noise public key
  • Subscription proposals/agreements encrypted per-party
  • X25519 ECDH + HKDF-SHA256 + ChaCha20-Poly1305
  • Prerequisite: Noise endpoint published at /pub/paykit.app/v0/noise

See Pubky Noise for details on the encrypted channel implementation.

Current Implementation Status

Current Version: 1.0.1 (Work in Progress)

  • 🚧 Core library under development
  • 🚧 Interactive protocol (WIP)
  • 🚧 Subscription system (WIP)
  • 🚧 Security model evolving
  • 🚧 Protocol specification in flux
  • 🚧 Integration testing in Bitkit (iOS/Android)

Demo Applications

  • CLI: Command-line reference implementation (WIP)
  • Web: WebAssembly browser demo
  • iOS Demo: SwiftUI prototype with Keychain storage
  • Android Demo: Jetpack Compose prototype

Testing Integrations

  • Bitkit iOS: Protocol testing integration (~80 files)
  • Bitkit Android: Protocol testing integration (~97 files)
  • Pubky Ring: Identity and key management integration

Potential Use Cases (Future)

Direct Peer Payments

Pay directly to profiles using Pubky identity without requesting addresses or invoices.

Content Monetization

  • Paywalls for content
  • Tip jars for creators
  • Micropayments for API access

Subscription Services

  • Magazine subscriptions
  • SaaS billing
  • Recurring donations

E-Commerce

  • Online store checkouts
  • Marketplace payments
  • Service bookings

Technical Details (Subject to Change)

Storage Paths

  • Payment methods: /pub/paykit.app/v0/{methodId} (public)
  • Noise endpoint: /pub/paykit.app/v0/noise (public)
  • Payment requests: /pub/paykit.app/v0/requests/{id} (encrypted)
  • Subscriptions: /pub/paykit.app/v0/subscriptions/* (encrypted)

Supported Payment Methods (Planned)

  • onchain: Bitcoin on-chain addresses
  • lightning: BOLT11 invoices, LNURL-pay, Lightning addresses
  • Custom: Extensible to other methods (under consideration)

Key Management

  • Ed25519: Identity signing and verification
  • X25519: Noise Protocol key exchange
  • Derived from same seed via HKDF (Pubky Ring integration)

Relationship to Pubky Core

Paykit is designed as a layer 2 protocol on top of Pubky Core:

  • Uses Pubky Homeservers for storage
  • Leverages Pubky’s public-key identity system
  • Integrates with Pubky’s DHT-based discovery
  • Extends Pubky with payment-specific functionality

Development Status & Roadmap

  • ⏳ Protocol specification stabilization
  • ⏳ Security audit and hardening
  • ⏳ Cross-platform testing and validation
  • ⏳ Production deployment planning
  • ⏳ Interoperability testing
  • ⏳ Performance optimization

Atomicity Protocol - Peer-to-peer mutual credit system research exploring trust-based payment routing using Pubky’s Semantic Social Graph. Designed as settlement infrastructure for credit issuance and transfer across economic scales from peer-to-peer to institutional banking. Currently in research phase.

Resources

⚠️ Important: Do not use Paykit for production applications. The protocol is a work in progress and subject to breaking changes.

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