Am I understanding this correctly?
If I use silent payments, even if I have to tell the government the owner of the receiving address when sending from an exchange (like the law will be in Europe), they can't follow me on-chain after the next hop?
#asknostr
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I have no idea. Shit’s moving so fast it’s hard to keep up.
No, I think silent payments are to have a permanent receive address for new coins, where third party observers (like the state) cannot see how much you received on that address, from whom and where you sent it after receiving.
Okay. So the sender can still follow on chain activity after the next hop?!
Yes, you do not gain any privacy from the sender but only from third parties trying to identify payments between you two. This is very valuable for donations to NGOs for example. If they posted a static permanent address on their website, a evil government could look up that address and see how much was donated to that party/NGO and where the funds came from i.e. who donated.
If you want to read some more about it:


Bitcoin Magazine
Bitcoin Silent Payments And Secret Blinding Keys
One issue with Bitcoin’s privacy, the ability to receive funds without giving up valuable information, is addressed with “silent payments.”