Date: Mon, 11 Feb 2019 04:29:42 +0000
To: "Kenshiro \\[\\]" <tensiam@hotmail.com>,
	Bitcoin Protocol Discussion <bitcoin-dev@lists.linuxfoundation.org>
From: ZmnSCPxj <ZmnSCPxj@protonmail.com>
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Subject: Re: [bitcoin-dev] Implementing Confidential Transactions in
	extension blocks
Precedence: list

Good morning Kenshiro,

> - Soft fork: old nodes see CT transactions as "sendtoany" transactions

There is a position that fullnodes must be able to get a view of the UTXO s=
et, and extension blocks (which are invisible to pre-extension-block fullno=
des) means that fullnodes no longer have an accurate view of the UTXO set.
SegWit still provides pre-SegWit fullnodes with a view of the UTXO set, alt=
hough pre-SegWit fullnodes could be convinced that a particular UTXO is any=
one-can-spend even though they are no longer anyone-can-spend.

Under this point-of-view, then, extension block is "not" soft fork.
It is "evil" soft fork since older nodes are forced to upgrade as their int=
ended functionality becomes impossible.
In this point-of-view, it is no better than a hard fork, which at least is =
very noisy about how older fullnode versions will simply stop working.

> - Safe: if there is a software bug in CT it's impossible to create new co=
ins because the coins move from normal block to normal block as public tran=
sactions

I think more relevant here is the issue of a future quantum computing breac=
h of the algorithms used to implement confidentiality.

I believe this is also achievable with a non-extension-block approach by im=
plementing a globally-verified publicly-visible counter of the total amount=
 in all confidential transaction outputs.
Then it becomes impossible to move from confidential to public transactions=
 with a value more than this counter, thus preventing inflation even if a f=
uture QC breach allows confidential transaction value commitments to be ope=
ned to any value.

(do note that a non-extension-block approach is a definite hardfork)

> - Capacity increase: the CT signature is stored in the extension block, s=
o CT transactions increase the maximum number of transactions per block

This is not an unalloyed positive: block size increase, even via extension =
block, translates to greater network capacity usage globally on all fullnod=
es.

Regards,
ZmnSCPxj