Bitcoin Silent Payments: Sparrow, BlueWallet & Cake Wallet Tutorial

Added: 2026-05-25

[00:00:00]In this video, we are taking a look at Bitcoin silent payments. First, I will explain what silent payments are, how they work, and the problem they solve.

[00:00:09]Then, we'll take a look at how to actually do silent payments. We'll mainly be looking at Sparrow Bitcoin wallet, and I will show you how to send and receive using Blue Wallet and Cake Wallet as well. Before we begin, my name is Cole, and I'm the host of the Southern Bitcoin YouTube channel you are currently watching. I also help people secure their Bitcoin one-on-one. So, if you need help with anything Bitcoin, whether it be setting up your cold storage or running a Bitcoin node, you can reach out to me at the link below.

[00:00:37]With that, let's jump right into the video. The first thing you need to understand is that Bitcoin is a completely public ledger. Anyone can see every single transaction ever made. The worst thing you can do for your Bitcoin privacy is constantly reuse the same Bitcoin address. And that is because all your financial history, all your transaction data, and all your balances will be associated with one single address. And anybody with that address can see all that information. So, think about it like this. Every time you receive Bitcoin, you give that person your address. And every time you send Bitcoin, they will see your address as well. So, everybody you transact with can see every transaction you've ever made, which is obviously terrible for your privacy. The solution to this problem has always been to generate a new Bitcoin address for each transaction. So, every time you want to receive Bitcoin, you open your wallet, you click receive, you create a brand new fresh Bitcoin address, and you give that address to the sender. Now, silent payments are the solution to this problem. A silent payment address gives you a static address that you can reuse all the time. But, every time you receive Bitcoin, the funds actually arrive in a brand new fresh Bitcoin address. So, basically, you have just one static address that you can give to anyone and everyone, but every time they send you Bitcoin, it will come to a brand new address. And therefore, we solve the problem of address reuse. Now, silent payments are still developing and not many wallets have adopted this technology yet. So, support across different wallets is quite limited for the moment. Another issue is that you need to connect to a specific type of server for silent payments to work. And the reason for that is because your Bitcoin wallet doesn't actually know when you've received a silent payment.

[00:02:34]The wallet needs to search the blockchain for any payments that might belong to your wallet. Most Bitcoin nodes and servers don't do this by default, so you will see now when we open Sparrow wallet, we do need to connect to a specific Bitcoin node or server. Now that we understand a bit about silent payments and how they work, let's start by creating a new wallet within Sparrow. Here I am in Sparrow wallet now, and what we need to do is create a new wallet that supports silent payments. So, what I will do is click on new wallet over here. I will call this silent payments and click on create wallet.

[00:03:12]Now, at the top of our screen, things will look a bit different inside of Sparrow wallet. We now have the option to change the policy type over here to single signature SP or silent payments.

[00:03:26]And that is what we need, so I will click on that and the script type will be set to Taproot. So, right now this only works for Taproot addresses, and therefore it defaults to Taproot. What we'll do is create a new seed phrase and a new wallet, so I will go new or imported software wallet. I will change this to 12 words. I will generate a new seed phrase, and now I will quickly write the seed phrase down somewhere safe. Okay, so I wrote that seed phrase down. I will click on confirm backup and re-enter words and I'll quickly re-enter the words I've written down. All right, all 12 words are in. I will click on create keystore, import keystore, and now everything is ready to go. If you're familiar with Sparrow and your other Bitcoin wallets, you may notice a few things are different here. So, for example, this derivation path looks a bit different than usual and so does this uh where the XPub would usually sit, we can see something that says SB scan. So, everything looks good to me. I will click on apply and it will ask me for a password. This is just a demonstration video, so I'm not going to set a password, but of course, if you're actually securing funds in this wallet, you should set a password. So, I will click on it no password. Now, this wallet is ready to go and it can start receiving payments, but the problem is that I'm still connected to my own Bitcoin node and we need to connect to the dedicated silent payment node. And you can see that there's an error over here because at the top left of my screen, I have a little red exclamation mark.

[00:05:01]So, what I will do is click on Sparrow at the top left of my screen and then click on settings.

[00:05:07]And then server.

[00:05:09]Now, I need to edit which server I'm connected to, so I will click on edit existing connection and then I will click on public server.

[00:05:18]Now, over here, you will click on this box and make sure that you are connected to this one, which is frigate 2140 dev and that says supports silent payments.

[00:05:31]So, I will click on that and click on test connection. Now, one thing to keep in mind is that we are connecting to a public server now. So, if you're running your own Bitcoin node, but now you're changing to somebody else's server, there are some privacy leaks being made.

[00:05:46]You are now sending information to this third-party server. At the moment, it is quite difficult to use silent payments with your own server, but that should change in the future. So, for now, you will have to connect to this public server. I've done that. I've clicked test connection, and everything looked good. So, I will click on close now, and then I can click on transactions, and we can see it says loading transactions, but of course, there are no transactions because we are yet to receive Bitcoin. Now, if we click on receive, things will start to look a bit different. Here we can see we have one single address with a large QR code, and this address looks different from a normal Bitcoin address. It starts in SP1Q, and this is our static silent payment address. So, we can give this address to multiple people, and it won't ruin your privacy. Every time one of them sends you Bitcoin, it will arrive in a new Bitcoin address.

[00:06:47]You will also notice that if you click addresses over here, we now have no receive addresses and change addresses visible at the moment because we haven't received coins yet. So, let's now take a look at how to receive coins. To receive, you'll just click on receive, and you will share your static address with anyone sending you Bitcoin. I'm going to load up BlueWallet on my phone and pay this address now. Here I am on my phone now, and we are inside of BlueWallet. And BlueWallet does support sending to silent addresses, but it doesn't currently support receiving silent addresses. So, we will be able to send Bitcoin from this wallet to our Sparrow wallet address.

[00:07:33]What I will do is click on send, and then I will scan this QR code I'm seeing on screen.

[00:07:39]And there we go, we can see it's picked up that address beginning in SP1Q. I will now set an amount, so we'll send about 0.0005 Bitcoin. I will click on next and then we will send the funds over.

[00:07:55]Now we will wait a moment and we should see that arrive in Sparrow wallet shortly. And there we go, it says new mempool transaction 0.0005 Bitcoin. So if we go over to our transactions tab over here, we can see we have now received one transaction. And then if we go over to addresses, we can see the first Bitcoin address that our wallet used. Here is the actual address that received coins. This is just a normal Taproot Bitcoin address. Now let's take a look at another example. I will click receive again and I will use the exact same static Bitcoin address. I will click on copy and then I'm going to go over to a different Sparrow wallet I have.

[00:08:40]I will click on send and I will pay to that address. So I'll paste in the address over here. Oh, and by the way, I have my first transaction confirmation, so I'll close those.

[00:08:52]But anyway, I will pay to this static address. I will label it test and I will set the amount to 0.0005 23 Bitcoin.

[00:09:03]Then I will just bump the fee up slightly. I will create transaction, finalize for signing and sign and then broadcast that transaction.

[00:09:13]Now, if I open my silent payments wallet, we should see those funds arrive shortly. So I'll click on transactions over here and we will give it a moment to receive the funds. And there we go, we have new mempool transaction. We have funds coming into the silent payments wallet and we have funds leaving my video wallet. So I will close those notifications And now, here's the important part. If I click on addresses, we can see both of these addresses are different, although we sent both payments to the same static address.

[00:09:51]We'll take a look at one more example here. So, if I click on receive, of course, it's the exact same address.

[00:09:56]Now, on my phone, I have Cake Wallet open. I will click on send, and then I will scan the address I'm seeing on screen.

[00:10:05]Now, we can see it begins in SP1Q, so that is a silent address. I will send the entire value.

[00:10:12]We will go ahead now and create this transaction.

[00:10:16]And there we go, transaction sent. And we should see those coins arrive in Sparrow shortly. And there we can see new mempool transaction. What I will do is click on addresses, and here we can see three completely different Bitcoin addresses with different balances.

[00:10:34]Although we used the same static address every time we sent coins to that address, a brand new on-chain Bitcoin address was created. What this means for users now is that you can share this address with anyone, and no matter how many times people send you Bitcoin, you will never leak privacy to any one of those people. The only time you will leak privacy is if you later go to your UTXOs tab, and you join all these UTXOs together. Then it will be revealed to all those different parties what Bitcoin you might own. But that is a topic for a different video. Now, there are two more things I want to show you. Firstly, paying from Sparrow Wallet to another wallet that supports silent payments.

[00:11:19]So, right now, Blue Wallet does not support receiving silent payments, although it does support sending silent payments. Cake Wallet, on the other hand, supports both receiving and sending. So, here within Cake Wallet, what I will do is click on receive, and here it says standard in the middle of the screen. I will click on that, and we will switch this to silent payments. And here we can see my silent payments address within Cake. What we'll do now inside of Sparrow Wallet is open the camera feature next to pay to, and I will just show this address to the computer like that. And now there is a bit of a weird issue with Cake Wallet where it exports the word Bitcoin at the beginning. So, what you can do is just remove that word Bitcoin, and at the end it seems to put a question mark. So, I will remove the question mark as well, and now it is a valid silent payment address. I will label this to Cake just like that. I will set the amount 2.001, and then we can create transaction, finalize for signing, sign, and then broadcast that transaction. Now, here in Cake Wallet, the funds are not showing up for me quite yet. So, what you need to do is click on the settings at the top right of your screen, and you need to make sure that you're connected to one of these nodes that does support silent payments. So, I will click on nodes over here, then at the top right I'm going to click on this refresh button, and it says silent payment scanning. So, you can either scan for Bitcoin payments from a particular block height or from a particular date. So, what I will do is click on scan from date, I will set this just to yesterday like that, and I will click on rescan.

[00:13:08]Now, it says change current node. Your current node does not support silent payments. I will click on confirm, and it will change which node I'm connected to, and then if I go back to my home screen, we can see it's currently scanning through about 370 blocks to go.

[00:13:25]And once that's done, we should see the funds arrive. And there we go, the funds have now arrived in Cake Wallet. We can see I have 0.00119765 Bitcoin. We received these coins to our silent payment address, but they actually just sit in a normal Taproot Bitcoin address inside of Cake Wallet.

[00:13:46]Now, one final thing I want to show you inside of Sparrow Wallet, if I close this, is that we can send funds from this silent payment wallet to normal Bitcoin addresses as well. So, what I will do is just open my video wallet over here. I will copy this Bitcoin address, and we'll go back to my silent payments wallet. Now, if I click on send and I paste that address in, we can see there's no problem. I can pay that Bitcoin address. It's completely valid.

[00:14:17]So, I will label this to video wallet. I will set the amount to max, and then I will go through with this transaction.

[00:14:26]And I will broadcast that transaction, and the funds will be sent just to a standard Bitcoin address. There is no need to pay silent Bitcoin addresses only. And there we go, that was a complete look at silent payments. We took a look at Sparrow, Cake Wallet, and Blue Wallet. Now, silent payments are great for your privacy, but things aren't very developed at the moment. We still have a lot of work to do. Not many wallets support silent payments, and even the ones that do, like Blue Wallet, don't support receiving and sending.

[00:14:58]Another issue is that most node implementations won't support the scanning for silent payments quite yet.

[00:15:05]So, you do need to connect to a public server. Things should improve in the future, more wallets should adopt this technology, and as a result, we should all gain from more Bitcoin privacy. That is the end of this video, and I will see you in the next one. Cheers.