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From: Lloyd Fournier <lloyd.fourn@gmail.com>
Date: Tue, 15 Jun 2021 13:08:37 +1000
Message-ID: <CAH5Bsr0XNiMUbCDXBxW7DWmmUrqNY53WbZfv+iChnnr18sK1EQ@mail.gmail.com>
To: Antoine Riard <antoine.riard@gmail.com>
Content-Type: multipart/alternative; boundary="000000000000e23df205c4c54b23"
Cc: Bitcoin Protocol Discussion <bitcoin-dev@lists.linuxfoundation.org>
Subject: Re: [bitcoin-dev] A Stroll through Fee-Bumping Techniques :
 Input-Based vs Child-Pay-For-Parent
Precedence: list

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On Tue, 15 Jun 2021 at 10:59, Lloyd Fournier <lloyd.fourn@gmail.com> wrote:

>
>
> On Tue, 15 Jun 2021 at 02:47, Antoine Riard <antoine.riard@gmail.com>
> wrote:
>
>> > This makes a lot of sense as it matches the semantics of what we are
>> trying
>> to achieve: allow the owner of an output (whether an individual or group)
>> to reduce that output's value to pay a higher fee.
>>
>> Note, I think you're still struggling with some trust issue that anchor
>> upgrade is at least eliminating for LN, namely the pre-agreement among a
>> group of signers about the effective feerate to use at some unknown time
>> point in the future. If you authorize your counterparty for a broadcast at
>> feerate X, how do you prevent a broadcast at feerate Y, where Y is far
>> under X, thus maliciously burning a lot of your fee-bumping reserve ?
>>
>> Of course, one mitigation is to make a contribution to a common
>> fee-bumping output reserve proportional to what has been contributed as a
>> funding collateral. Thus disincentivizing misuse of the common fee-bumping
>> reserve in a game-theoretical way. But if you take the example of a LN
>> channel, you're now running into another issue. Off-chain balances might
>> fluctuate in a way that most of the time, your fee-bumping reserve
>> contribution is out-of-proportion with your balance amounts to protect ?
>> And as such enduring some significant timevalue bleeding on your
>> fee-bumping reserve.
>>
>> Single-party managed fee-bumping reserve doesn't seem to suffer from this
>> drawback ?
>>
>
> I claim that what I am suggesting is a single-party managed fee-bumping
> system that solves all fee-bumping requirements of lightning without
> needing external utxos and without additional interaction or fee
> pre-agreement between parties. On the commit tx you have your balance going
> exclusively towards you which you can unilaterally reduce to increase the
> fee up to whatever threshold you want. With a HTLC or PTLC you also always
> have a tx with an output that you can unilaterally drain to bump fee
> (either the hltc-success or htlc-timeout). Are you saying that there are
> protocols where this would require pre-arrangement or are you saying that
> it would require pre-arrangement in lightning for some reason I don't see?
>

Ok now I see what I am missing: We don't really know who owns certain
outputs in lightning until the most-recent-state-enforcement mechanism has
done its job. i.e. the outputs are 2-of-2s up until that has been resolved.
I was operating on some simplified imaginary lightning. Indeed this makes
the proposal far less attractive and does require interaction and
pre-agreement. This complexity here makes it worse than just keeping
external fee-bumping utxos around (as undesirable as this is). Thanks for
helping me figure this out.

LL

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<div dir=3D"ltr"><div dir=3D"ltr"><br></div><br><div class=3D"gmail_quote">=
<div dir=3D"ltr" class=3D"gmail_attr">On Tue, 15 Jun 2021 at 10:59, Lloyd F=
ournier &lt;<a href=3D"mailto:lloyd.fourn@gmail.com">lloyd.fourn@gmail.com<=
/a>&gt; wrote:<br></div><blockquote class=3D"gmail_quote" style=3D"margin:0=
px 0px 0px 0.8ex;border-left:1px solid rgb(204,204,204);padding-left:1ex"><=
div dir=3D"ltr"><div dir=3D"ltr"><br></div><br><div class=3D"gmail_quote"><=
div dir=3D"ltr" class=3D"gmail_attr">On Tue, 15 Jun 2021 at 02:47, Antoine =
Riard &lt;<a href=3D"mailto:antoine.riard@gmail.com" target=3D"_blank">anto=
ine.riard@gmail.com</a>&gt; wrote:<br></div><blockquote class=3D"gmail_quot=
e" style=3D"margin:0px 0px 0px 0.8ex;border-left:1px solid rgb(204,204,204)=
;padding-left:1ex"><div dir=3D"ltr">&gt; This makes a lot of sense as it ma=
tches the semantics of what we are trying<br>to achieve: allow the owner of=
 an output (whether an individual or group)<br>to reduce that output&#39;s =
value to pay a higher fee.<br><br>Note, I think you&#39;re still struggling=
 with some trust issue that anchor upgrade is at least eliminating for LN, =
namely the pre-agreement among a group of signers about the effective feera=
te to use at some unknown time point in the future. If you authorize your c=
ounterparty for a broadcast at feerate X, how do you prevent a broadcast at=
 feerate Y, where Y is far under X, thus maliciously burning a lot of your =
fee-bumping reserve ?<br><br>Of course, one mitigation is to make a contrib=
ution to a common fee-bumping output reserve proportional to what has been =
contributed as a funding collateral. Thus disincentivizing misuse of the co=
mmon fee-bumping reserve in a game-theoretical way. But if you take the exa=
mple of a LN channel, you&#39;re now running into another issue. Off-chain =
balances might fluctuate in a way that most of the time, your fee-bumping r=
eserve contribution is out-of-proportion with your balance amounts to prote=
ct ? And as such enduring some significant timevalue bleeding on your fee-b=
umping reserve.<br><br>Single-party managed fee-bumping reserve doesn&#39;t=
 seem to suffer from this drawback ?<br></div></blockquote><br></div><div c=
lass=3D"gmail_quote">I claim that what I am suggesting is a single-party ma=
naged fee-bumping system=20
that solves all fee-bumping requirements of lightning without needing exter=
nal utxos and without additional interaction or fee pre-agreement between p=
arties. On the commit tx you have your balance going exclusively towards yo=
u which you can unilaterally reduce to increase the fee up to whatever thre=
shold you want. With a HTLC or PTLC you also always have a tx with an outpu=
t that you can unilaterally drain to bump fee (either the hltc-success or h=
tlc-timeout). Are you saying that there are protocols where this would requ=
ire pre-arrangement or are you saying that it would require pre-arrangement=
 in lightning for some reason I don&#39;t see?</div></div></blockquote><div=
><br></div><div>Ok now I see what I am missing: We don&#39;t really know wh=
o owns certain outputs in lightning until the most-recent-state-enforcement=
 mechanism has done its job. i.e. the outputs are 2-of-2s up until that has=
 been resolved. I was operating on some simplified imaginary lightning.  In=
deed this makes the proposal far less attractive and does require interacti=
on and pre-agreement. This complexity here makes it worse than just keeping=
 external fee-bumping utxos around (as undesirable as this is).=20
Thanks for helping me figure this out.<br></div><div><br></div><div>LL<br><=
/div><div> <br></div></div></div>

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