Pay-to-IP

Pay-to-IP (sometimes called "IP-to-IP transaction") was an early Bitcoin feature, present in Satoshi's original 2009 client, that let you send coins directly to someone's IP address without exchanging a Bitcoin address first. The sender's client would connect directly to the recipient's running node, request a fresh receive address, and immediately broadcast the payment.

How it worked:

1. Sender types the recipient's IP address (or hostname) into their Bitcoin client.
2. Sender's client opens a TCP connection to the recipient's node.
3. Recipient's node generates a fresh address on demand and returns it.
4. Sender's client constructs and signs a transaction paying to that address.
5. Transaction is broadcast to the network normally.

Why it was removed:

• Privacy nightmare. The sender's IP was exposed to the recipient. The recipient's IP was effectively a payment endpoint that anyone monitoring connections could associate with Bitcoin activity.
• Network architecture problems. It required recipients' nodes to be reachable on the public internet. Behind NAT or firewall? Can't receive.
• Identity / impersonation risk. Anyone running a node at a known IP could be impersonated by anyone who could BGP-hijack or DNS-spoof the connection.
• Doxing vector. Tying Bitcoin payments to IP addresses defeated the pseudonymity of the address-based model.
• Functionally redundant. Once Bitcoin addresses became the standard payment endpoint, Pay-to-IP was just a more dangerous way to do what addresses already did.

Pay-to-IP was disabled by default in Bitcoin 0.5 (2011) and removed in Bitcoin 0.8 (2013). For a decade-plus now it has been a museum piece, occasionally referenced when explaining how early Bitcoin worked or as a counterexample to "what not to do for privacy."

Modern equivalents that actually work:

• Standard Bitcoin addresses with QR codes for in-person and BIP 21 URIs for digital sharing.
• Lightning invoices and BOLT 12 offers for fast, recipient-anonymous payment endpoints.
• PayJoin / BIP 78 for sender-recipient interactive payment flows when needed, with proper privacy properties.

The lesson: Bitcoin's mechanisms have generally evolved away from "trust the network connection" toward "trust the cryptographic identity." Pay-to-IP is what the former looks like at the design level. Modern Bitcoin is the latter, and the difference is real.