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Cc: Bitcoin Protocol Discussion <bitcoin-dev@lists.linuxfoundation.org>
Subject: Re: [bitcoin-dev] Boost Bitcoin circulation,
 Million Transactions Per Second with stronger privacy
Precedence: list

After introducing Sabu protocol as a solution for Bitcoin scaling
(https://raymo-49157.medium.com/time-to-boost-bitcoin-circulation-million-transactions-per-second-and-privacy-1eef8568d180),
I shared this idea with Bitcoin developers through the bitcoin-dev
mailing list.
I got some constructive feedbacks and critiques leading me to add this
part to the proposal which I was skipped due to brevity of proposal
introduction.

Here I will investigate on more real live scenarios, general usages and
corner cases, and the consequences of some attacks or buggy
implementation of protocol, as well as different actors (malicious,
irrational, profit seeker, griefer, stupid, reckless, incompetent, etc.)
activity effects.

In proposal introduction (previous post), I did not talk about Lightning
deliberately, although it seems that this solution is an alternative to
Lightning.
Most of readers misunderstood Sabu and asking what differs it from
Lightning?
Indeed, Sabu has nothing with Lightning. It has totally different
design, network architecture, security model and implementation. The
only thing in common with Lightning is both are intended to cover micro
payments.
The good thing about Bitcoin is that it does not require any kind of
permission. Consequently, related products do not need to ask permission
too. We are in a permission-less free market. I think Sabu will work
perfectly and if a group of users think like me, we are done. Sabu will
work parallel the other scaling solutions without need to drive them
out.
However, I have made a comparison between Sabu, on-chain and Lightning
transactions to get a clearer understanding of the advantages and
disadvantages of Sabu and answer to “why we should implement and use
Sabu in our day-to-day deals”.
Most probably this paper is not comprehensive document, therefore this
article will be updated.

You will find the complete post here:
https://raymo-49157.medium.com/scaling-bitcoin-by-sabu-protocol-risks-and-benefits-62157f8a664e

Raymo

On 2021-07-07 03:20, Billy Tetrud wrote:
>>  As far as I know the “claw back” mechanism doesn’t exist in
> Bitcoin
> system, and probably most Bitcoiners won’t be agree on it.
> 
> It certainly doesn't. And it would definitely be a hard sell.
> 
>> It looks the miners still can abuse Sabu, but as I told before the
> mineror better say the mining pool must be issuer .. or must be
> creditor .. or collaborate one of them in a
> conspiracy.
> 
> Yes. But it certainly incentivizes miners to become creditors and scam
> people. Even if a small miner who mines one block a year does this,
> they can mine all Guarantee Transactions in their possession. Larger
> miners that mine one block every few days can scam that much more
> often. Even with $5 credits, that could be an extra $9000 gained in a
> block. That's pretty substantial when fees are totaling around $45,000
> per block.
> 
>> would be resolved by a slightly upgrade in Bitcoin protocol by
> applying the BIPxxx “for flagging/unflagging promised UTXOs”
> 
> As others have mentioned tho, doing something like that would be at
> very least quite complex, and at worst impossible to do securely. The
> whole reason why bitcoin's blockchain exists in the first place is to
> be a single source of truth for transactions. The mempool is not a
> source of truth for consensus. The Sabu network could not be a source
> of truth either for consensus, without some serious innovations (that
> may not be possible). It isn't as simple as you seem to be thinking.
> 
>>  The new transaction will use same 40,000 UTXO as input and the
> outputs will be 6,500 Sat for creditor (he pays 2,500 Sat for
> transaction fee) 4,500 Sat for creditor 2
> 
> This is the part I was unable to find/understand quickly enough in the
> original write up. So for creditor 1 to pay creditor 2, a new main
> transaction and guarantee transaction are created that credit the
> appropriate people, right? FYI, the MT and GT acronyms make it harder
> for me to read/understand, so I'm preferring to write them out. But
> that helps. Let me write this out in a different (more compact) way:
> 
> 1. Creditor A $5 -> Issuer
> 
> 2. Issuer creates and shares transactions:
> 
> Main Transaction (40k sats):
> * Issuer: 19k sats
> * Creditor A: 11k sats
> * Fee: 10k sats (4k from creditor, 6k from issuer)
> 
> Guarantee Transaction (40k sats):
> * Issuer: 13,300 sats
> * Creditor A: 1650 sats
> * Fee: 25,050 sats
> 
> 3. Creditor A, 6k sats -> Creditor B. Issuer creates and shares
> transactions:
> 
> Main Transaction (40k sats):
> * Issuer: 19k sats* Creditor A:  6,500 sats
> * Creditor B:  4,500 sats
> 
> * Fee: 10k sats (4k from creditor, 6k from issuer)
> 
> Guarantee Transaction (40k sats):
> * Issuer: 13300 sats* Creditor A: 975 sats
> * Creditor B: 675 sats
> * Fee: 25050 sats
> 
> Is this right?
> 
>> The miner attack is just a failed plan as I explained before
> 
> I thought you acknowledged that the miner attack is an issue above.
> No?
> 
>>> Sabu has slightly greater risk comparing lightning
>> It is not true,
> 
> What I mean is that a violation of trust results in more damaging
> effects with Sabu than with lightning. In lightning, if your channel
> partner cheats, at worst you must simply pay a normal transaction fee.
> With Sabu, if a creditor cheats, you will likely pay an abnormally
> large transaction fee. This is what I mean by "greater risk". Some
> attackers are what's known as griefers - these are people willing to
> spend time and money hurting someone else, even if they don't make a
> profit from it (other than schadenfreude). It seems clear there is a
> greater risk of being griefed in Sabu than in lightning.
> 
> Furthermore, while in lightning, if you perform the protocol properly,
> your funds can never be stolen except in very extreme circumstances
> (eg widespread long-running network congestion that prevents
> confirming a revoke transaction). By contrast, Sabu has a significant
> likelihood that a cheating transaction could be mined instead of the
> guarantee transaction. Perhaps the likelihood is approximately 2
> seconds / 10 minutes (0.3% chance), but a 0.3% is clearly larger than
> approximately 0% chance in lightning. Again, this is another part of
> what I mean by "higher risk".
> 
> These are both real counterparty risks that you shouldn't simply
> ignore. It may be true that no rational actor will attempt an attack,
> however not all actors are rational. People also make mistakes, write
> buggy software, etc etc. The existence of risk doesn't ruin your idea
> - every protocol has risks. But identifying the specific risks is the
> only way to compare the properties against alternatives (like on chain
> transactions or the lightning network). I think its important to
> acknowledge these risks in your write up.
> 
>> I explained before this kind of attacks will not happened never
> 
> If people use your protocol, some will inevitably use it wrong. Those
> that use it wrong should be the ones that pay the price for it - but
> it is a downside of the protocol if the counter party of the person
> that makes a mistake (or attempts something malicious) is harmed as a
> result. Again, these kinds of trade offs are ok, but you should not be
> assuming that attacks like this will never happen. They will happen
> sometimes. You must assume that. The question is what is the result
> when an attack is attempted? And how will that affect what kinds of
> actors will attempt an attack (malicious, profit seeking, honest,
> stupid, wreckless, incompetent, other types of actors etc etc)?
> 
>> I didn’t find any case Lightning can compete with Sabu.
> 
> As I explained above related to risk, there are trade offs. I would
> like to see in your write up a clear list of these trade offs. The
> additional risk (as I explained it above) is one trade off. It sounds
> like there are limits in which a creditor or issuer can safely rely on
> incentives to prevent attacks. Did you specify what those limits are?
> The Lightning network also has limits - eg a lightning node can't
> allow its channel partner to spend 100% of their coins without taking
> on additional risk of attack. How do those limits compare in Sabu? For
> example, an issuer couldn't allow any creditor to spend so much of
> their credited bitcoin that their credit goes below the amount they
> would receive in any past Guarantee Transaction without taking on the
> risk that the creditor would post that guarantee transaction and
> receive coins they shouldn't own anymore. I would love to see a more
> detailed comparison of Sabu to lightning.
> 
> If your protocol works out, there are obvious benefits: transactions
> that could be done with no on-chain footprint. However, even if the
> protocol works out, there are trade offs and those trade offs should
> be made very clear. Even if the comparative downsides are small.
> 
> ~BT
> 
>> Hi Billy
>>> high-level overview of how all the pieces (How Sabu protocol
>> works).
>>> how normal transactions happen in their entirety.
>> Ok, lets re-explain Sabu. In Sabu protocol we have two type of
>> actors.
>> The issuers who own Bitcoin (they own UTXOs on Bitcoin blockchain),
>> and
>> the creditors who will own Bitcoins (the UTXOs on Bitcoin
>> blockchain),
>> if the issuer or the creditor sends the prepared transaction to
>> Bitcoin
>> network. But for know creditors have the transaction in their hand.
>> Before sending this transaction to Bitcoin network it acts (in Sabu
>> protocol and Sabu network) as a liability of issuer.
>> The story always starts from issuer, the person who get money or
>> goods
>> or services from a creditor and in exchange creates and sings a
>> valid
>> Bitcoin transaction by which the issuer spends his UTXO and as a one
>> of
>> the outputs of the transaction, there will be an output for
>> creditor’s
>> address equal to the money issuer already get paid.
>> This transaction is a valid transaction which is signed “only”
>> by
>> issuer. The outputs of transaction are just and exact balance of the
>> parties (issuer and creditor).
>> Lets, imagine the creditor payed 5$ (almost equal to 15,000 Sat) to
>> issuer. Thus, issuer will create and sign a transaction by which he
>> spends 40,000 Sat and the outputs will be
>> 11,000 for creditor (the creditor has to pay 4,000 Sat in favor of
>> transaction fee),
>> 10,000 for Bitcoin-transaction-fee (4,000 by creditor and 6,000 by
>> issuer) and
>> 19,000 change back to issuer account address.
>> It is our Main Transaction (MT) which is a pretty normal and valid
>> transaction.
>> Alongside the MT, issuer creates and signs a Guarantee Transaction
>> (GT).
>> In GT issuer spends same 40,000 Sat UTXO as input, and as outputs
>> the creditor will get 15% of his 11,000 Sat in Main Transaction.
>> Thus
>> the creditor output will be 1,650 Sat and the rest of creditor’s
>> money
>> (11,000 – 1,650 = 9,350 Sat) will be added to transaction fee.
>> In GT also issuer will lose a part of his money. New output for
>> issuer
>> will be 19,000 * 70% = 13,300 and the rest will be added to
>> transaction
>> fee (19,000 – 13,300 = 5,700 Sat)
>> Thus, the new transaction fee in GT will be 10,000 + 9,350 + 5,700 =
>> 25,050 Sat
>> Now the creditor has 2 valid transactions (MT and GT) in his hands.
>> He
>> can send either MT or GT or both to Bitcoin Network. But in all
>> cases,
>> he will lose a portion of his money in favor of transaction fee
>> (miner’s
>> income). So, rationally he will never send transactions to Bitcoin
>> network unless he wants consciously hurt himself.
>> The creditor always prefers to spend his credit inside the Sabu
>> protocol. It is “how normal transactions happen in their
>> entirety.”
>> Creditor has equal to 15,000 Sat credit. Say he wants to buy a caffe
>> worth 6,000 Sat. He has to ask the issuer to nullify previous MT and
>> GT,
>> and create and sign new transaction and cut 6,000 Sat from his
>> credit
>> and transfer it to a new creditor (say C2).
>> The new transaction will use same 40,000 UTXO as input and the
>> outputs
>> will be
>> 6,500 Sat for creditor (he pays 2,500 Sat for transaction fee)
>> 4,500 Sat for creditor 2 (he has to pay 1,500 Sat for transaction
>> fee as
>> well)
>> 10,000 for Bitcoin-transaction-fee (4,000 by two creditors and 6,000
>> by
>> issuer) and
>> 19,000 change back to issuer account address.
>> This is the new MT, and as you can see the C1 and C2 have their new
>> credit in transaction.
>> You can calculate the new GT as well.
>> Note: due to simplicity I just rounded the numbers and skipped the
>> Sabu-transaction-fee
>> I just wrote this long story to explain how creditors just transfer
>> money in between.
>> If we take a snapshot of Sabu network, we will see millions of valid
>> transactions flowing in network and none of the issuers or creditors
>> will send these transactions to Bitcoin network due the transaction
>> fee,
>> while in Bitcoin blockchain nothing is changed! The UTXOs are
>> untouched,
>> and no one can say which UTXO is promised to who.
>> It is a pretty secure off-chain protocol.
>> Although I expected more Bitcoiners to react about Sabu proposal and
>> comment for or against it, so far, I have not seen any serious
>> criticism
>> or real threat about protocol.
>> The miner attack is just a failed plan as I explained before.
>>> Sabu has slightly greater risk comparing lightning
>> It is not true, since creditors can manage they risk, and limit
>> their
>> credit to 5, 10 or 20 Dollar or 50$. It is totally up to creditor to
>> accept more liability from issuers or not.
>> The creditor can keep his credit around a fix number. That is, the
>> creditor spends a part of his credit and then again increase its
>> credit.
>> Let imagine you already payed 5$ to a issuer and you got 15,000 Sat
>> credit in your wallet. So, you will spend this 15,000 Sat (buy
>> coffee,
>> ice-cream, etc.) till your wallet run out of Satoshi and again you
>> will
>> pay another 5$ to issuer and get new 15,000 sat credit. Since all of
>> these transactions has near zero cost you are not obliged to charge
>> your
>> wallet 200$ in one shot.
>> It is absolutely low risk deal. In worst case the creditor (you)
>> will
>> lose 5$. And as I explained before this kind of attacks will not
>> happened never. And as you told Sabu provides cheaper and a larger
>> number of transactions.
>>> This would be essentially worse than the lightning network in some
>> ways,
>> Disagree! Please explain the scenario exactly. I didn’t find any
>> case
>> Lightning can compete with Sabu.
>>> ledger of accounts and their balances, along with proof that the
>> entity owns…
>> It is almost what I designed in Sabu. They are doc-watcher servers.
>> They
>> are a set of records of UTXOs and the proper Merkle root hash of
>> related
>> transaction in Sabu network. The intention was stopping issuer from
>> spend and promises same UTXO to different people (that they are not
>> aware of the existence of the other). So, any individual creditor
>> (or
>> their software) could verify that total liabilities (in account
>> balances) are less than the half of the total bitcoins the entity
>> owns.
>> And if something doesn't match up, they won’t yell, instead they
>> refuse
>> the deal in first place, or send the GT to Bitcoin network and hurt
>> the
>> cheater issuer by slashing his money. it is “Tit-for-tat”.
>>> I think it likely has critical security holes. Perhaps you can fix
>> them!
>> There is no critical security hole. Please refer it by facts,
>> numbers
>> and proves.
>> I think I already fixed all critics.
>> 
>> Billy! I am actively working on this proposal and if no one cannot
>> show
>> a real problem or security issue in the project, I will start
>> implementing it.
>> Just imagine people regularly using Sabu protocol and send/receive
>> Bitcoin (Satoshi) in billions of small amount transactions every
>> day.
>> This protocol will outspread Bitcoin and will attract a new crowd of
>> penny investors to Bitcoin. The people who can afford 20$ or less
>> monthly to invest on Bitcoin.
>> Sabu brings Bitcoin to a whole new life.
>> It will be the true scalable and mass adaption, and I do not know
>> how to
>> attract more real Bitcoin fans to this proposal!
>> Guys! Here is the Bitcoin renascence.
>> Maybe you can help it.
>> Regards
>> Raymo
> 
> On Sat, Jul 3, 2021 at 1:02 AM <raymo@riseup.net> wrote:
> 
>> Hi Billy,
>> 
>>> What if it was possible for the creditor to claw back the funds
>> As far as I know the “claw back” mechanism doesn’t exist in
>> Bitcoin
>> system, and probably most Bitcoiners won’t be agree on it.
>> Even if we want to add claw back to Bitcoin in general, and Sabu in
>> particular, it would add too complexities and uncertainty to
>> Bitcoin.
>> So, it would be better to not touch that part, instead focusing on
>> reduce the cheating risk by putting some penalty for both issuers,
>> creditors and miners.
>> We already have the penalties for both issuers and creditors.
>> It looks the miners still can abuse Sabu, but as I told before the
>> miner
>> or better say the mining pool must be issuer (to be able to sign the
>> promised UTXO in cheating way) or must be creditor (in order to have
>> a
>> copy of GT and not lose his money in favor of a stranger miner.
>> Remember
>> the fact that creditor will lose 70% of their money in favor of
>> Bitcoin
>> transaction fee in a typical GT) or collaborate one of them in a
>> conspiracy. Otherwise, there will be no economic benefit in this
>> attack.
>> 
>> All these 3 cases of the attacks, theoretically could be happened,
>> but
>> the risk to reward ratio is enough high to hinder potential
>> malevolent
>> from a practical act.
>> Even this very small risk of miner attacks (which don’t care the
>> attack
>> costs, since he is not interested in economic benefit, but he wants
>> to
>> ruin Sabu), would be resolved by a slightly upgrade in Bitcoin
>> protocol
>> by applying the BIPxxx “for flagging/unflagging promised UTXOs”.
>> 
>> I am not in rush to apply this upgrade on Bitcoin protocol, instead
>> I am
>> actively working in order to realize the Sabu protocol and Gazin
>> wallet.
>> Later the Sabu community will carry the BIPxxx.
>> 
>> Best
>> 
>> On 2021-07-02 17:57, Billy Tetrud wrote:
>>> Thanks for the details Raymo. A thought occurred to me. Given the
>> fact
>>> that miners can abuse this system without penalty, it would be
>> useful
>>> to be able to fix this. What if it was possible for the creditor
>> to
>>> claw back the funds even if the cheating transaction was mined
>> instead
>>> of the guarantee transaction? Let's say there was a way to sign a
>>> transaction that gives the receiver of that transaction the
>> ability to
>>> override any other transaction that uses the UTXO? If this were
>>> possible, the issuer could give the creditor this kind of
>> transaction
>>> as the guarantee transaction, and in the case a cheat was done,
>> the
>>> creditor could still use the GT to reallocate that UTXO to
>> themselves.
>>> 
>>> Now there are issues with this. First of all, it could give anyone
>> the
>>> ability to double spend. So it would be prudent to limit this in
>> some
>>> way. The revocation probably should only be valid for up to 6
>> blocks,
>>> such that if the transaction has 6 confirmations, it can no longer
>> be
>>> reallocated (thus preserving the 6 block finality rule). It could
>> also
>>> be required that the UTXO be marked as opting into this behavior
>> (so
>>> receivers would know about the possibility it could get revoked).
>> This
>>> second requirement would require Sabu issuers to make an on-chain
>>> transaction to set themselves up as an issuer.
>>> 
>>> Another issue is that this would make it possible for transactions
>> to
>>> expire. Any claw-back transaction would expire 6 blocks after the
>>> initial transaction happened. This has been generally avoided in
>>> bitcoin, but I think the relevant issues are solvable. You can
>> find
>>> additional discussion of that in this thread [1].
>>> 
>>> I would imagine this kind of ability would be pretty
>> controversial,
>>> but since it can close out the possibility for miners to escape
>>> punishment, it could make this protocol viable.
>>> 
>>> On Thu, Jul 1, 2021 at 3:15 PM <raymo@riseup.net> wrote:
>>> 
>>>> Hi Erik
>>>> 
>>>> Please correct me if I misunderstood.
>>>> 
>>>>> email is fully compromised.
>>>> 
>>>> What I got is:
>>>> Email is not good because the sender and receiver are
>> compromised.
>>>> Email is not good because the message content is revealed.
>>>> I can claim same argue about any other client/server model. Since
>>>> the
>>>> server (website) service provider will ask some sort of KYC. And
>>>> even if
>>>> the server uses end-to-end encryption, the provider company still
>>>> can
>>>> read the packets content.
>>>> In my model the passive listener only can discover who is
>>>> communicate to
>>>> whom and make a graph of connections. Although it is a threat for
>>>> privacy but the server/client model has this flaw inherently,
>> since
>>>> provider already knew everything about everyone. In my model at
>>>> least
>>>> users can make some fake connections and send some fake emails in
>>>> order
>>>> to inject noise to communications.
>>>> Please note the fact that entire communication between mobile
>>>> wallets
>>>> (via emails) are asymmetric PGP encrypted. The PGP keys are
>>>> controlled
>>>> by end users unlike ALL pretending secure messengers (e.g
>> whatsApp,
>>>> signal, zoom,…).
>>>> If you are worried about the way of exchanging PGP public key,
>> you
>>>> are
>>>> right. The most secure way is in-person PGP key exchanging.
>>>> After that for payments the wallets communicate in pgp encrypted
>>>> messages and they can transfer Bitcoin address through an PGP
>>>> encrypted
>>>> cipher, thus no revealing Bitcoin address to public would occur.
>>>> Neither
>>>> the amounts of transactions will be reviled.
>>>> There for it would be a good practice for shops to put their
>> email
>>>> and
>>>> PGP public key on shop website and/or PGP public key servers,
>>>> instead of
>>>> putting Bitcoin address on website or using 3rd parties services
>> to
>>>> hide
>>>> their Bitcoin payment addresses.
>>>> 
>>>> If I missed some points about “fully compromised” please
>> write
>>>> it to me.
>>>> 
>>>>> public keys / addresses are sent
>>>> As I told before ALL communication in Sabu are PGP encrypted.
>>>> 
>>>>> other routing data encrypted with public keys
>>>>> (not sure how data is routed in sabu)
>>>> 
>>>> Sabu is not responsible for routing at all. It simply sends
>> emails.
>>>> Indeed the wallets peer-to-peer network in Sabu is pretty
>> straight
>>>> forward. Each mobile wallet has one email address as its handler
>> and
>>>> identifier in mobile-wallets-network. Each mobile can send
>> message
>>>> to
>>>> another mobile by knowing its email address and the PGP public
>> key.
>>>> This information can be prepared in first face-to-face contact of
>>>> mobile
>>>> owners, or later (something like signing the other’s public key
>> in
>>>> web
>>>> of trust) when a creditor wants to spend his money and transfer
>> it
>>>> to
>>>> another creditor. The creditor1 send the signed money transfer
>>>> request
>>>> alongside the email and public key of creditor2 all in a PGP
>>>> encrypted
>>>> message to issuer.
>>>> 
>>>>> separate the Sabu protocol from the app... allow others to
>>>> implement
>>>>> desktop version, or other versions that use other routing
>> systems
>>>> 
>>>> Indeed, it is my approach too. As I told before users will decide
>>>> between an unstoppable, permission less, self-sovereignty and
>>>> decentralized pure peer-to-peer communication network (with some
>>>> resolvable privacy issues) or some efficient, privacy-mimic
>> central
>>>> limited network.
>>>> 
>>>>> you can allow direct-entry of a BIP-word-representation
>>>>> of a public key/address to avoid privacy/central system concerns
>>>> Agree. Actually, I was thinking about an easy mechanism to share
>>>> your
>>>> public key like what you suggested here.
>>>> But what I consider for a “central system concerns” is the
>>>> ability of
>>>> communication without dependency to any company.
>>>> As an example, what can you do if the twitter bans your account?
>>>> Nothing! Your content and entire connections will be lost.
>>>> But if you form your friends list in your mobile (or computer)
>> and
>>>> have
>>>> their PGP public keys and they have yours, and use email as a
>> dual
>>>> purpose tool. First as a handler (the tool for finding and to be
>>>> found
>>>> in internet) and second as a communication tool.
>>>> Thus, no one can stop you, ban you or limit you to send/receive
>>>> transaction to/from anyone.
>>>> What I am trying to say is using email is far better than account
>>>> (username) in a limited central service like twitter, Facebook,
>>>> telegram... or even in future Sabu servers!
>>>> You have your connections under your control in your phone. You
>> can
>>>> easily change your email and use a new email or even a new
>> service
>>>> provider without losing your connections and your control over
>> it.
>>>> You just sign your new email address and send it to your friends
>>>> circle
>>>> and notify them about changes.
>>>> Of course, email is not good for millions of followers but it is
>>>> obviously good for managing your payment network of hundreds of
>>>> people
>>>> (either issuers or creditors).
>>>> 
>>>> Best
>>>> Raymo
>>>> 
>>>> On 2021-07-01 20:49, Erik Aronesty wrote:
>>>>> your protocol should always assume the email system is fully
>>>>> compromised, and only send public information over email:
>>>>> 
>>>>> - public keys / addresses are sent
>>>>> - other routing data encrypted with public keys (not sure how
>> data
>>>> is
>>>>> routed in sabu)
>>>>> 
>>>>> your end user should be able to verify public keys  / addresses
>>>>> 
>>>>> - use QR-codes
>>>>> - phone calls with users reading BIP words out loud
>>>>> - other in-person information exchange
>>>>> 
>>>>> separate the Sabu protocol from the app... allow others to
>>>> implement
>>>>> desktop version, or other versions that use other routing
>> systems
>>>>> 
>>>>> -  you can allow direct-entry of a BIP-word-representation of a
>>>> public
>>>>> key/address to avoid privacy/central system concerns
>>>>> 
>>>>> On Thu, Jul 1, 2021 at 4:20 PM raymo via bitcoin-dev
>>>>> <bitcoin-dev@lists.linuxfoundation.org> wrote:
>>>>>> 
>>>>>> Hi Billy,
>>>>>> Sorry for late reply. Let’s jump in proposal.
>>>>>> 
>>>>>>> Some more information about the benefits of this approach vs
>>>> alternatives (mainly lightning)
>>>>>> The most important different is unlike the lightning, in Sabu
>> no
>>>> one
>>>>>> have to open a channel and pay Bitcoin transaction fee,
>>>> subsequently no
>>>>>> one has to close channel and pay another Bitcoin transaction
>> fee.
>>>> It is
>>>>>> the huge improvement since it drops the overhead cost of
>>>> transactions.
>>>>>> So, it will be more convenience to trade under Sabu protocol.
>>>>>> In Sabu none of parties of a transaction are obliged to block
>>>> money in
>>>>>> any kind of smart contract or any other m of n signature
>> accounts
>>>>>> on-chain, so it provides more privacy.
>>>>>> Since Sabu protocol is designed to motivate people to circulate
>>>>>> transactions (AKA debt documents) in Sabu network, if every
>> actor
>>>> act
>>>>>> rationally no one will aware how much money transferred from
>> who
>>>> to
>>>>>> whom.
>>>>>> In case of fraudulent activity by issuer, the creditor will
>> send
>>>>>> Guarantee Transaction (GT) to Bitcoin network in order to
>>>> recapture the
>>>>>> part of his credit. So, in this case the transaction is
>> literally
>>>>>> recorded on bitcoin blockchain.
>>>>>> There is only one another reason to recording transaction on
>>>> Bitcoin
>>>>>> blockchain. Where one creditor eager to pay Bitcoin transaction
>>>> fee in
>>>>>> order to aggregate thousands or even millions different small
>>>> amount
>>>>>> debt-documents in a single transaction on Bitcoin blockchain.
>>>>>> despite these two cases, the rest of transactions all occur in
>>>> the Sabu
>>>>>> network (supposed to be over 99%). Thus, no footprint no
>>>> bottleneck and
>>>>>> no over process.
>>>>>> 
>>>>>> Another important power point of Sabu is its pure-peer-to-peer
>>>> network
>>>>>> architecture. In Sabu the mobile wallets communicating to each
>>>> other
>>>>>> directly without any central server. There is no centralization
>>>> at all.
>>>>>> As a result, there will be no routing as well.
>>>>>> Since only issuer and creditors are aware of the content of
>>>> transaction
>>>>>> (who pay how much to whom) it is a huge privacy improvement,
>>>> which
>>>>>> doesn’t exist in other layer 2 solutions.
>>>>>> 
>>>>>> About the usability of Sabu, although the protocol based on the
>>>>>> collaborating 2 different peer-to-peer network and 3 classic
>>>>>> server/client networks, but the end user (mobile wallet user)
>>>> doesn’t
>>>>>> see any of these complexities.
>>>>>> The end user simply installs the mobile/desktop wallet and add
>>>> her/his
>>>>>> friends to his phonebook by adding their email address or
>>>> scanning their
>>>>>> email (and/or PGP public key). After that s/he can immediately
>>>> start to
>>>>>> send/receive Bitcoin through Sabu network. Entire
>> communications
>>>> between
>>>>>> wallets are PGP encrypted.
>>>>>> Another good point in Sabu design is, the 12 seed words are
>> using
>>>> for
>>>>>> both Bitcoin wallet private key and the PGP private key. So, it
>>>> is the
>>>>>> key of user wealth and its identity as well. For more details,
>>>> please
>>>>>> read my previous answer to Alex Schoof.
>>>>>> The issuer, by using his UTXOs and selling them to creditors
>> earn
>>>> money.
>>>>>> the issuer creates the debt document (transaction) by which
>>>> promises to
>>>>>> creditor an amount of satoshi. These debt documents are valid
>>>> Bitcoin
>>>>>> transaction. The only difference is these transactions are
>>>> intended to
>>>>>> circulate in Sabu protocol instead of sending to Bitcoin
>>>> blockchain.
>>>>>> Each transaction is a small money transfer. 40,000 Satoshi as
>>>> input and
>>>>>> maximum 20,000 Satoshi as credit and minimum 10,000 Satoshi as
>>>> Bitcoin
>>>>>> transaction fee.
>>>>>> The creditors will use these received transactions as money and
>>>> will pay
>>>>>> it in exchange of goods or services. For each transaction the
>>>> creditor
>>>>>> pays 10 Satoshi as Sabu-transaction-fee to issuer.
>>>>>> Sabu is not custodial service and the UXTOs are always under
>>>> issuer
>>>>>> control, unless issuer or creditor send the signed transaction
>> to
>>>>>> Bitcoin network. When the transaction was recorded in Bitcoin
>>>>>> blockchain, the creditor can spend proper UTXO in Bitcoin
>>>> network.
>>>>>> Imagine million people use their UTXOs in Sabu, they are issuer
>>>> and
>>>>>> issue/update/cancel million transactions per second. All they
>>>> need is a
>>>>>> mobile wallet. On the other hand, every one by knowing an
>> issuer
>>>> can buy
>>>>>> some Satoshi (whit absolutely no KYC), even 1 Dollar or less,
>> and
>>>> spend
>>>>>> it, this time Alice really can buy caffe by Bitcoin ;)
>>>>>> The Bar can install the mobile wallet and every day receives
>>>> thousands
>>>>>> of debt documents (transactions), each worth maximum 20,000
>>>> Satoshi in
>>>>>> exchange of coffee. And every evening aggregates those small
>>>>>> transactions to one single transaction and send it to Bitcoin
>>>> network.
>>>>>> 
>>>>>> 
>>>>>> The security model of Sabu is pretty straight forward.
>>>>>> Issuer is the owner of UTXO(s) which will be used in
>>>> transactions. The
>>>>>> issuer is and will the only person who creates transactions and
>>>> sign
>>>>>> them. The transactions are valid transaction which either
>> issuer
>>>> or
>>>>>> creditor can send them to Bitcoin network, but they will never
>>>> send
>>>>>> these transactions to Bitcoin network, because of the high
>>>> Bitcoin
>>>>>> transaction fee for each single transaction.
>>>>>> Since issuer is the only one who can sign transaction (spend
>>>> UTXOs),
>>>>>> there is a risk of issuer cheating. And no one can stop issuer
>>>> from
>>>>>> cheating, because these are his UTXOs and he has the proper
>>>> private
>>>>>> keys.
>>>>>> The Sabu solution is Guarantee transaction. It is a valid
>>>> transaction
>>>>>> that issuer has to sign it alongside the Main transaction. In
>> GT
>>>> both
>>>>>> issuer and creditor cut a part of their output in favor of
>>>> Bitcoin
>>>>>> transaction fee.
>>>>>> We suppose miners always seeking for more profit, thus in a
>> case
>>>> there
>>>>>> are 2 or more transaction are spending same UTXO as input,
>> miner
>>>> will
>>>>>> choose transaction with highest feeRate. There is no
>> economically
>>>>>> benefit for issuer to cheat creditors and pay less transaction
>>>> fee
>>>>>> simultaneously. So rationally the issuer won’t cheat
>> creditor.
>>>>>> It was the simplest explanation of Sabu security model.
>>>>>> 
>>>>>>> I agree with others that using email is probably not
>>>> appropriate for a protocol like this. I would highly recommend
>>>> making your protocol transport-agnostic, allowing users of your
>>>> protocol to use any transport they want.
>>>>>> Indeed, the protocol is transparent-agnostic, if I insist of
>>>> email as a
>>>>>> user identifier and communicating tool is because of the idea
>> of
>>>>>> reforming part of internet architecture and make it more
>>>> decentralized.
>>>>>> The wallet users can choose classic architecture. In this case
>>>> mobile
>>>>>> wallets will connect to a central server and communicate
>> through
>>>> that
>>>>>> server (pretty much like all existed mobile wallets). While
>> some
>>>> users
>>>>>> decide to use a pure peer-to-peer communication. I knew email
>> has
>>>> some
>>>>>> privacy issues but as always it is a tradeoff. Users can decide
>>>> between
>>>>>> an unstoppable, permission less, self-sovereignty and
>>>> decentralized pure
>>>>>> peer-to-peer communication network (with some resolvable
>> privacy
>>>> issues)
>>>>>> or some efficient central limited network.
>>>>>> Let me know the critics about email. Hopefully this would lead
>> us
>>>> to
>>>>>> improve email instead of letting it die. I strongly suggest
>> email
>>>>>> because it is the ONLY neutral, free “nonproprietary” and
>>>> open
>>>>>> protocol/technology for communication in the world that its
>>>>>> infrastructure is well-established and is accessible all over
>> the
>>>> glob.
>>>>>> 
>>>>>> I tried to explain it more, hope was useful. By the way the
>>>> complete
>>>>>> explanation is here
>>>>>> 
>>>> 
>>> 
>> 
> https://raymo-49157.medium.com/time-to-boost-bitcoin-circulation-million-transactions-per-second-and-privacy-1eef8568d180
>>>>>> 
>>>>>> 
>>>>>> 
>>>>>> Regards
>>>>>> Raymo
>>>>>> 
>>>>>> 
>>>>>> 
>>>>>> On 2021-06-22 18:20, Billy Tetrud wrote:
>>>>>>> I would be interested in seeing some more information about
>> the
>>>>>>> benefits of this approach vs alternatives up front in this
>>>> write up.
>>>>>>> Eg how does the security, cost, usability, and privacy compare
>>>> to the
>>>>>>> lightning network, which would be the most likely competitor
>> to
>>>> this
>>>>>>> idea. It seems clear that there is more counterparty risk
>> here,
>>>> so it
>>>>>>> would probably also be very helpful to compare against
>>>> traditional
>>>>>>> custodial solutions as well. If you have specific claims on
>> how
>>>> this
>>>>>>> system is better than eg lightning in certain contexts, it
>>>> would be
>>>>>>> far easier to evaluate the protocol against those claims, and
>>>> would
>>>>>>> also be a lot easier for readers to be motivated to read the
>>>> whole
>>>>>>> protocol and do a more full analysis.
>>>>>>> 
>>>>>>> I agree with others that using email is probably not
>>>> appropriate for a
>>>>>>> protocol like this. I would highly recommend making your
>>>> protocol
>>>>>>> transport-agnostic, allowing users of your protocol to use any
>>>>>>> transport they want.
>>>>>>> 
>>>>>>> On Sat, Jun 19, 2021 at 7:00 PM James Hilliard via bitcoin-dev
>>>>>>> <bitcoin-dev@lists.linuxfoundation.org> wrote:
>>>>>>> 
>>>>>>>> I think you're making a number of assumptions about mining
>>>> that are
>>>>>>>> not accurate.
>>>>>>>> 
>>>>>>>>> First of all, how much chance in finding next block the
>>>> corrupted
>>>>>>>> miners have? One percent of all Bitcoin hash powers? Or
>>>> maximum 5
>>>>>>>> percent or 10? The cheaters must come up in dividing that 1.2
>>>>>>>> Bitcoin between. After all the risk/reward must fit them.
>> They
>>>> can
>>>>>>>> not be a big mining pool since there is no benefit, so they
>>>> will be
>>>>>>>> small miners with low hash rate. If they solve the puzzle and
>>>>>>>> broadcast the block, no one in the entire Bitcoin network has
>>>> block
>>>>>>>> transactions or seen it before in their mempool!
>>>>>>>> 
>>>>>>>> You're making the assumption that miners won't build on top
>> of
>>>> a
>>>>>>>> block
>>>>>>>> with transactions they have not seen before or transactions
>>>> that may
>>>>>>>> contain double spends of unconfirmed inputs, this is not how
>>>> mining
>>>>>>>> works, as long as the block passes the consensus rules
>>>> effectively
>>>>>>>> all
>>>>>>>> miners will mine on top of it by default, this behavior is
>>>>>>>> fundamental
>>>>>>>> to how mining currently works and is fairly deeply baked into
>>>> the
>>>>>>>> current mining infrastructure.
>>>>>>>> 
>>>>>>>>> Will they accept this block? In theory it is possible and
>>>> have
>>>>>>>> 0.01 percent chance but we can eliminate this small
>>>> possibilities by
>>>>>>>> a simple BIP for miners.
>>>>>>>> 
>>>>>>>> What would this BIP look like? I don't see how this could
>> work
>>>> in a
>>>>>>>> decentralized way as you would need another way of reaching
>>>>>>>> consensus
>>>>>>>> on what defines a valid block. Right now the chance is nearly
>>>> 100
>>>>>>>> percent that a miner will mine on top of the latest valid
>>>> block,
>>>>>>>> many
>>>>>>>> pools(most last I checked) will even mine on the next block
>>>> before
>>>>>>>> they validate the latest block fully(ie validationless
>> mining)
>>>> to
>>>>>>>> reduce their orphan rates.
>>>>>>>> 
>>>>>>>>> We suppose the miners always control transactions with
>>>>>>>> doc-watchers and avoid accepting transaction with same UTXO
>>>> but
>>>>>>>> different output.
>>>>>>>> 
>>>>>>>> Miners have different mempool policy/rules for what
>>>> transactions
>>>>>>>> they
>>>>>>>> themselves mine but all miners must mine on the most work
>>>> chain of
>>>>>>>> valid blocks otherwise they risk their own blocks being
>>>> orphaned,
>>>>>>>> any
>>>>>>>> miner that does not do this is effectively guaranteed to have
>>>> their
>>>>>>>> block orphaned right now.
>>>>>>>> 
>>>>>>>>> Because of high Bitcoin transaction fee, this guarantee
>>>>>>>> transaction will take place in next block, even if other
>>>> transaction
>>>>>>>> which are using the same UTXO as input existed in mempool.
>>>>>>>> 
>>>>>>>> When a new transaction is broadcast miners do not immediately
>>>> start
>>>>>>>> mining on a block template that includes that transaction,
>> the
>>>>>>>> template won't even be generated immediately when it enters a
>>>> miners
>>>>>>>> mempool in practice, for bandwidth/network efficiency reasons
>>>> mining
>>>>>>>> pools batch update the stratum templates/jobs they mine
>>>> against so
>>>>>>>> there can be significant latency between the time a
>>>> transaction is
>>>>>>>> actually broadcast and hits the miners mempool and the time
>>>> the
>>>>>>>> miners
>>>>>>>> actually switch to mining on top it, these batched updates
>> are
>>>>>>>> essentially like point in time snapshots of the mempool and
>>>>>>>> typically
>>>>>>>> remain valid(as in the pool will accept shares submitted
>>>> against
>>>>>>>> that
>>>>>>>> job as valid) until the bitcoin network finds the next block.
>>>> I
>>>>>>>> don't
>>>>>>>> think these batch updates are done more often than every 30
>>>> seconds
>>>>>>>> typically, while often it is on the order of multiple minutes
>>>>>>>> depending on the pool.
>>>>>>>> 
>>>>>>>> Regards,
>>>>>>>> James
>>>>>>>> 
>>>>>>>> On Thu, Jun 17, 2021 at 2:14 PM raymo via bitcoin-dev
>>>>>>>> <bitcoin-dev@lists.linuxfoundation.org> wrote:
>>>>>>>>> 
>>>>>>>>> Hi,
>>>>>>>>> I have a proposal for improve Bitcoin TPS and privacy, here
>>>> is the
>>>>>>>> post.
>>>>>>>>> 
>>>>>>>> 
>>>>>>> 
>>>> 
>>> 
>> 
> https://raymo-49157.medium.com/time-to-boost-bitcoin-circulation-million-transactions-per-second-and-privacy-1eef8568d180
>>>>>>>>> https://bitcointalk.org/index.php?topic=5344020.0
>>>>>>>>> Can you please read it and share your idea about it.
>>>>>>>>> 
>>>>>>>>> Cheers
>>>>>>>>> Raymo
>>>>>>>>> _______________________________________________
>>>>>>>>> bitcoin-dev mailing list
>>>>>>>>> bitcoin-dev@lists.linuxfoundation.org
>>>>>>>>> 
>>>> https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev
>>>>>>>> _______________________________________________
>>>>>>>> bitcoin-dev mailing list
>>>>>>>> bitcoin-dev@lists.linuxfoundation.org
>>>>>>>> 
>> https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev
>>>>>> _______________________________________________
>>>>>> bitcoin-dev mailing list
>>>>>> bitcoin-dev@lists.linuxfoundation.org
>>>>>> https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev
>>> 
>>> 
>>> Links:
>>> ------
>>> [1]
>> 
> https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2021-June/019050.html