diff --git a/sphinx.go b/sphinx.go
new file mode 100644
index 000000000..377d593ba
--- /dev/null
+++ b/sphinx.go
@@ -0,0 +1,103 @@
+package main
+
+import (
+	"crypto/sha256"
+	"math/big"
+
+	"github.com/btcsuite/btcd/btcec"
+	"github.com/btcsuite/btcd/wire"
+	"github.com/btcsuite/btcutil"
+)
+
+type LnEndpoint string
+type LnAddr btcutil.Address
+type NodePubKey *btcec.PublicKey
+
+type SharedSecret wire.ShaHash
+
+var zeroNode wire.ShaHash
+
+type MixHeader []byte
+
+// SphinxHeader...
+type SphinxHeader struct {
+}
+
+// GenerateSphinxHeader...
+// TODO(roasbeef): or pass in identifiers as payment path? have map from id -> pubkey
+func GenerateSphinxHeader(dest LnAddr, identifier wire.ShaHash, paymentPath []NodePubKey) (*MixHeader, []SharedSecret, error) {
+	// Each hop performs ECDH with our ephemeral key pair to arrive at a
+	// shared secret. Additionally, each hop randomizes the group element
+	// for the next hop by multiplying it by the blinding factor. This way
+	// we only need to transmit a single group element, and hops can't link
+	// a session back to us if they have several nodes in the path.
+	numHops := len(paymentPath)
+	hopEphemeralPubKeys := make([]*btcec.PublicKey, numHops)
+	hopSharedSecret := make([][sha256.Size]byte, numHops)
+	hopBlindingFactors := make([][sha256.Size]byte, numHops)
+
+	// Generate a new ephemeral key to use for ECDH for this session.
+	sessionKey, err := btcec.NewPrivateKey(btcec.S256())
+	if err != nil {
+		return nil, nil, err
+	}
+
+	// Compute the triplet for the first hop outside of the main loop.
+	// Within the loop each new triplet will be computed recursively based
+	// off of the blinding factor of the last hop.
+	hopEphemeralPubKeys[0] = sessionKey.PubKey()
+	hopSharedSecret[0] = sha256.Sum256(btcec.GenerateSharedSecret(sessionKey, paymentPath[0]))
+	hopBlindingFactors[0] = computeBlindingFactor(hopEphemeralPubKeys[0], hopSharedSecret[0][:])
+
+	// x * b_{0} mod n
+	cummulativeBlind := new(big.Int).Mul(sessionKey.X, new(big.Int).SetBytes(hopBlindingFactors[0][:]))
+	cummulativeBlind.Mod(cummulativeBlind, btcec.S256().N)
+
+	// Now recursively compute the ephemeral ECDH pub keys, the shared
+	// secret, and blinding factor for each hop.
+	for i := 1; i < numHops-1; i++ {
+		// a_{n} = a_{n-1} x c_{n-1}
+		// hopEphemeralPubKeys[i] = ScalarBaseMult(cummulativeBlind.Bytes())
+		hopEphemeralPubKeys[i] = blindGroupElement(hopEphemeralPubKeys[i-1], cummulativeBlind.Bytes())
+
+		// s_{n} = sha256( y_{n} x c_{n-1} )
+		hopSharedSecret[i] = sha256.Sum256(blindGroupElement(paymentPath[i], cummulativeBlind.Bytes()).X.Bytes())
+
+		// b_{n} = sha256(a_{n} || s_{n})
+		hopBlindingFactors[i] = computeBlindingFactor(hopEphemeralPubKeys[i], hopSharedSecret[i][:])
+
+		// c_{n} = c_{n-1} * b_{n} mod curve_order
+		cummulativeBlind.Mul(cummulativeBlind, new(big.Int).SetBytes(hopBlindingFactors[i][:]))
+		cummulativeBlind.Mod(cummulativeBlind, btcec.S256().N)
+	}
+
+	return nil, nil, nil
+}
+
+// ComputeBlindingFactor for the next hop given the ephemeral pubKey and
+// sharedSecret for this hop. The blinding factor is computed as the
+// sha-256(pubkey || sharedSecret).
+func computeBlindingFactor(hopPubKey *btcec.PublicKey, hopSharedSecret []byte) [sha256.Size]byte {
+	sha := sha256.New()
+	sha.Write(hopPubKey.SerializeCompressed())
+	sha.Write(hopSharedSecret)
+
+	var hash [sha256.Size]byte
+	copy(hash[:], sha.Sum(nil))
+	return hash
+}
+
+// blindGroupElement blinds the group element by performing scalar
+// multiplication of the group element by blindingFactor: G x blindingFactor.
+func blindGroupElement(hopPubKey *btcec.PublicKey, blindingFactor []byte) *btcec.PublicKey {
+	newX, newY := hopPubKey.Curve.ScalarMult(hopPubKey.X, hopPubKey.Y, blindingFactor[:])
+	return &btcec.PublicKey{hopPubKey.Curve, newX, newY}
+}
+
+// SphinxPayload...
+type SphinxPayload struct {
+}
+
+// SphinxPacket...
+type SphinxPacket struct {
+}