Subaddress

Subaddresses serve two purposes.

Prevent payer from linking your payouts together

To prevent the payer from linking your payouts together simply generate a new subaddress for each payout. This way services like Shapeshift wouldn't know it is you again receving Monero.

Group incoming payments

Think income streams.

Subaddresses allow you to group your incoming transactions within a single wallet.

You may want to organize your incoming funds into a streams like "donations", "work", "pool payouts", etc.

At first glance this is similar to subaccounts in your bank account. There is a very important difference though.

In Monero funds don't really sit on public addresses. Public addresses are conceptually a gateway or a routing mechanism. Funds sit on the unspent outputs. Thus, a single transaction can aggregate and spent outputs from multiple addresses. This means you can spend more than any individual address balance.

Why not multiple wallets?

The advantage over creating multiple wallets is that you only have a single seed to manage. All subaddresses can be derived from the wallet seed.

Caveates

  • Subaddress cannot be used to receive transactions having multiple destinations (e.g. pool payouts). Only the standard address (the one with index == 0) can receive such transactions.
  • It is not recommended to sweep all the balances of subaddress to main address in a single transaction. That links the subaddresses together on the blockchain. However, this only concerns privacy against specific sender and the situation will never get worse than not using subaddresses in the first place. If you need to join funds while preserving maximum privacy do it with individual transactions (one per subaddress).

Implementation

Each subaddress has an index (with 0 being the base standard address). User interface allows to assign convenience labels to subaddresses. However, labels are not preserved when recreating from seed.

Index Size in bytes Description
0 1 identifies the network and address type; 42 - main chain; 63 - test chain

TODO: finish

Reference