Definition
BIP47 defines reusable payment codes: a way to publish a single, permanent code that anyone can pay to without the address reuse that normally leaks privacy. A PayNym is the friendly representation of a BIP47 code — a robot avatar and handle (like +example) mapping to the underlying cryptographic payment code. Senders and receivers use the code to deterministically derive a fresh on-chain address for every payment, so repeat payments to the same person are not publicly linkable.
The notification transaction
The first time Alice pays Bob's payment code, her wallet broadcasts a one-time "notification transaction" containing data encrypted to Bob and placed in an OP_RETURN output. Bob's wallet watches his notification address, decrypts the payload with his private key, and learns the stream of one-time addresses Alice will send to. Although the notification is visible on-chain, only Bob can derive the resulting addresses, so future payments stay private to outside observers.
Strengths and limits
BIP47 lets users advertise a stable identity (on a website, a tip jar, or social media) while keeping their actual receiving addresses confidential. The trade-offs are that establishing a new sender requires an on-chain notification transaction — a small fee and a public, if encrypted, footprint — and that both wallets must support the standard. These limitations motivated the later Silent Payments (BIP352) design, which removes the notification step.
D-Central has published a hands-on guide to PayNyms and BIP47 for readers who want to set one up. For the broader concept, see stealth address.
In Simple Terms
BIP47 defines reusable payment codes: a way to publish a single, permanent code that anyone can pay to without the address reuse that normally leaks…