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From: Neil Fincham <neil@asdf.co.nz>
Date: Mon, 2 Mar 2015 08:05:39 +1300
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To: Troy Benjegerdes <hozer@hozed.org>
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Subject: Re: [Bitcoin-development] replace-by-fee v0.10.0rc4
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> Seems like a good deal, what am I missing?

The disruption caused to every other user or the bitcoin network.
Transactions unconfirmed, history is rewritten, the poor Byzantine General
who sent his soldiers off to battle finds out that his scouts have been
paid to change their reports.

Neil

On 2 March 2015 at 06:59, Troy Benjegerdes <hozer@hozed.org> wrote:

> So let's play this out a little.. Let's call it "Solomon's spend[1]"
>
> Exchange gets hacked, bitcoins move.
>
> The exchange has a contract with an insurance company and miners for
> 'scorched earth' theft response that creates a double-spend of the
> original transaction.
>
> So now there's a 10,000 bitcoin incentive for miners to roll back the
> chain and start (re)mining the block where the theft occurred.
>
> The exchange gets an insurance payout, some miner wins the lottery, and
> the thief gets nothing. Seems like a good deal, what am I missing?
>
> [1] http://en.wikipedia.org/wiki/Judgment_of_Solomon
>
> On Sun, Feb 22, 2015 at 04:06:13AM -0800, Eric Lombrozo wrote:
> > I should note that my proposal does require a change to the consensus
> > rules...but getting bitcoin to scale will require this no matter what.
> >
> > - Eric Lombrozo
> > On Feb 22, 2015 3:41 AM, "Eric Lombrozo" <elombrozo@gmail.com> wrote:
> >
> > > It seems to me we're confusing two completely different motivations f=
or
> > > double-spending. One is the ability to replace a fee, the other is th=
e
> > > ability to replace outputs.
> > >
> > > If the double-spend were to merely add or remove inputs (but keep at
> least
> > > one input in common, of course), it seems fairly safe to assume it's
> the
> > > former, a genuine fee replacement. Even allowing for things like
> coinjoin,
> > > none of the payees would really care either way.
> > >
> > > Conversely, if at least one of the inputs were kept but none of the
> > > outputs were, we can be confident it's the the latter.
> > >
> > > It is possible to build a wallet that always does the former when doi=
ng
> > > fee replacement by using another transaction to create an output with
> > > exactly the additional desired fee.
> > >
> > > If we can clearly distinguish these two cases then the fee replacemen=
t
> > > case can be handled by relaying both and letting miners pick one or t=
he
> > > other while the output replacement case could be handled by rewarding
> > > everything to a miner (essentially all outputs are voided...made
> > > unredeemable...and all inputs are added to coinbase) if the miner
> includes
> > > the two conflicting transactions in the same block.
> > >
> > > Wouldn't this essentially solve the problem?
> > >
> > > - Eric Lombrozo
> > > On Feb 21, 2015 8:09 PM, "Jeff Garzik" <jgarzik@bitpay.com> wrote:
> > >
> > >> On Sat, Feb 21, 2015 at 10:25 PM, Jorge Tim=C3=B3n <jtimon@jtimon.cc=
>
> wrote:
> > >> > On Sat, Feb 21, 2015 at 11:47 PM, Jeff Garzik <jgarzik@bitpay.com>
> > >> wrote:
> > >> >> This isn't some theoretical exercise.  Like it or not many use
> > >> >> insecure 0-conf transactions for rapid payments.  Deploying
> something
> > >> >> that makes 0-conf transactions unusable would have a wide, negati=
ve
> > >> >> impact on present day bitcoin payments, thus "scorched earth"
> > >>
> > >> > And maybe by maintaining first seen policies we're harming the
> system
> > >> > in the long term by encouraging people to widely deploy systems
> based
> > >> > on extremely weak assumptions.
> > >>
> > >> Lacking a coded, reviewed alternative, that's only a platitude.
> > >> Widely used 0-conf payments are where we're at today.  Simply ceasin=
g
> > >> the "maintaining [of] first seen policies" alone is simply not a
> > >> realistic option.  The negative impact to today's userbase would be
> > >> huge.
> > >>
> > >> Instant payments need a security upgrade, yes.
> > >>
> > >> --
> > >> Jeff Garzik
> > >> Bitcoin core developer and open source evangelist
> > >> BitPay, Inc.      https://bitpay.com/
> > >>
> > >>
> > >>
> -------------------------------------------------------------------------=
-----
> > >> Download BIRT iHub F-Type - The Free Enterprise-Grade BIRT Server
> > >> from Actuate! Instantly Supercharge Your Business Reports and
> Dashboards
> > >> with Interactivity, Sharing, Native Excel Exports, App Integration &
> more
> > >> Get technology previously reserved for billion-dollar corporations,
> FREE
> > >>
> > >>
> http://pubads.g.doubleclick.net/gampad/clk?id=3D190641631&iu=3D/4140/ostg=
.clktrk
> > >> _______________________________________________
> > >> Bitcoin-development mailing list
> > >> Bitcoin-development@lists.sourceforge.net
> > >> https://lists.sourceforge.net/lists/listinfo/bitcoin-development
> > >>
> > >
>
> >
> -------------------------------------------------------------------------=
-----
> > Download BIRT iHub F-Type - The Free Enterprise-Grade BIRT Server
> > from Actuate! Instantly Supercharge Your Business Reports and Dashboard=
s
> > with Interactivity, Sharing, Native Excel Exports, App Integration & mo=
re
> > Get technology previously reserved for billion-dollar corporations, FRE=
E
> >
> http://pubads.g.doubleclick.net/gampad/clk?id=3D190641631&iu=3D/4140/ostg=
.clktrk
>
> > _______________________________________________
> > Bitcoin-development mailing list
> > Bitcoin-development@lists.sourceforge.net
> > https://lists.sourceforge.net/lists/listinfo/bitcoin-development
>
>
> --
>
> -------------------------------------------------------------------------=
---
> Troy Benjegerdes                 'da hozer'
> hozer@hozed.org
> 7 elements      earth::water::air::fire::mind::spirit::soul
> grid.coop
>
>       Never pick a fight with someone who buys ink by the barrel,
>          nor try buy a hacker who makes money by the megahash
>
>
>
> -------------------------------------------------------------------------=
-----
> Dive into the World of Parallel Programming The Go Parallel Website,
> sponsored
> by Intel and developed in partnership with Slashdot Media, is your hub fo=
r
> all
> things parallel software development, from weekly thought leadership blog=
s
> to
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> conversation now. http://goparallel.sourceforge.net/
> _______________________________________________
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> Bitcoin-development@lists.sourceforge.net
> https://lists.sourceforge.net/lists/listinfo/bitcoin-development
>

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<div dir=3D"ltr">&gt;=C2=A0<span style=3D"font-size:12.8000001907349px">See=
ms like a good deal, what am I missing?</span><div><span style=3D"font-size=
:12.8000001907349px"><br></span></div><div><span style=3D"font-size:12.8000=
001907349px">The disruption caused to every other user or the bitcoin netwo=
rk.=C2=A0 Transactions=C2=A0unconfirmed, history is rewritten, the poor=C2=
=A0Byzantine General who sent his=C2=A0soldiers=C2=A0off to battle finds ou=
t that his scouts have been paid to change their reports.</span></div><div>=
<span style=3D"font-size:12.8000001907349px"><br></span></div><div><span st=
yle=3D"font-size:12.8000001907349px">Neil</span></div></div><div class=3D"g=
mail_extra"><br><div class=3D"gmail_quote">On 2 March 2015 at 06:59, Troy B=
enjegerdes <span dir=3D"ltr">&lt;<a href=3D"mailto:hozer@hozed.org" target=
=3D"_blank">hozer@hozed.org</a>&gt;</span> wrote:<br><blockquote class=3D"g=
mail_quote" style=3D"margin:0 0 0 .8ex;border-left:1px #ccc solid;padding-l=
eft:1ex">So let&#39;s play this out a little.. Let&#39;s call it &quot;Solo=
mon&#39;s spend[1]&quot;<br>
<br>
Exchange gets hacked, bitcoins move.<br>
<br>
The exchange has a contract with an insurance company and miners for<br>
&#39;scorched earth&#39; theft response that creates a double-spend of the<=
br>
original transaction.<br>
<br>
So now there&#39;s a 10,000 bitcoin incentive for miners to roll back the<b=
r>
chain and start (re)mining the block where the theft occurred.<br>
<br>
The exchange gets an insurance payout, some miner wins the lottery, and<br>
the thief gets nothing. Seems like a good deal, what am I missing?<br>
<br>
[1] <a href=3D"http://en.wikipedia.org/wiki/Judgment_of_Solomon" target=3D"=
_blank">http://en.wikipedia.org/wiki/Judgment_of_Solomon</a><br>
<div><div class=3D"h5"><br>
On Sun, Feb 22, 2015 at 04:06:13AM -0800, Eric Lombrozo wrote:<br>
&gt; I should note that my proposal does require a change to the consensus<=
br>
&gt; rules...but getting bitcoin to scale will require this no matter what.=
<br>
&gt;<br>
&gt; - Eric Lombrozo<br>
&gt; On Feb 22, 2015 3:41 AM, &quot;Eric Lombrozo&quot; &lt;<a href=3D"mail=
to:elombrozo@gmail.com">elombrozo@gmail.com</a>&gt; wrote:<br>
&gt;<br>
&gt; &gt; It seems to me we&#39;re confusing two completely different motiv=
ations for<br>
&gt; &gt; double-spending. One is the ability to replace a fee, the other i=
s the<br>
&gt; &gt; ability to replace outputs.<br>
&gt; &gt;<br>
&gt; &gt; If the double-spend were to merely add or remove inputs (but keep=
 at least<br>
&gt; &gt; one input in common, of course), it seems fairly safe to assume i=
t&#39;s the<br>
&gt; &gt; former, a genuine fee replacement. Even allowing for things like =
coinjoin,<br>
&gt; &gt; none of the payees would really care either way.<br>
&gt; &gt;<br>
&gt; &gt; Conversely, if at least one of the inputs were kept but none of t=
he<br>
&gt; &gt; outputs were, we can be confident it&#39;s the the latter.<br>
&gt; &gt;<br>
&gt; &gt; It is possible to build a wallet that always does the former when=
 doing<br>
&gt; &gt; fee replacement by using another transaction to create an output =
with<br>
&gt; &gt; exactly the additional desired fee.<br>
&gt; &gt;<br>
&gt; &gt; If we can clearly distinguish these two cases then the fee replac=
ement<br>
&gt; &gt; case can be handled by relaying both and letting miners pick one =
or the<br>
&gt; &gt; other while the output replacement case could be handled by rewar=
ding<br>
&gt; &gt; everything to a miner (essentially all outputs are voided...made<=
br>
&gt; &gt; unredeemable...and all inputs are added to coinbase) if the miner=
 includes<br>
&gt; &gt; the two conflicting transactions in the same block.<br>
&gt; &gt;<br>
&gt; &gt; Wouldn&#39;t this essentially solve the problem?<br>
&gt; &gt;<br>
&gt; &gt; - Eric Lombrozo<br>
&gt; &gt; On Feb 21, 2015 8:09 PM, &quot;Jeff Garzik&quot; &lt;<a href=3D"m=
ailto:jgarzik@bitpay.com">jgarzik@bitpay.com</a>&gt; wrote:<br>
&gt; &gt;<br>
&gt; &gt;&gt; On Sat, Feb 21, 2015 at 10:25 PM, Jorge Tim=C3=B3n &lt;jtimon=
@jtimon.cc&gt; wrote:<br>
&gt; &gt;&gt; &gt; On Sat, Feb 21, 2015 at 11:47 PM, Jeff Garzik &lt;<a hre=
f=3D"mailto:jgarzik@bitpay.com">jgarzik@bitpay.com</a>&gt;<br>
&gt; &gt;&gt; wrote:<br>
&gt; &gt;&gt; &gt;&gt; This isn&#39;t some theoretical exercise.=C2=A0 Like=
 it or not many use<br>
&gt; &gt;&gt; &gt;&gt; insecure 0-conf transactions for rapid payments.=C2=
=A0 Deploying something<br>
&gt; &gt;&gt; &gt;&gt; that makes 0-conf transactions unusable would have a=
 wide, negative<br>
&gt; &gt;&gt; &gt;&gt; impact on present day bitcoin payments, thus &quot;s=
corched earth&quot;<br>
&gt; &gt;&gt;<br>
&gt; &gt;&gt; &gt; And maybe by maintaining first seen policies we&#39;re h=
arming the system<br>
&gt; &gt;&gt; &gt; in the long term by encouraging people to widely deploy =
systems based<br>
&gt; &gt;&gt; &gt; on extremely weak assumptions.<br>
&gt; &gt;&gt;<br>
&gt; &gt;&gt; Lacking a coded, reviewed alternative, that&#39;s only a plat=
itude.<br>
&gt; &gt;&gt; Widely used 0-conf payments are where we&#39;re at today.=C2=
=A0 Simply ceasing<br>
&gt; &gt;&gt; the &quot;maintaining [of] first seen policies&quot; alone is=
 simply not a<br>
&gt; &gt;&gt; realistic option.=C2=A0 The negative impact to today&#39;s us=
erbase would be<br>
&gt; &gt;&gt; huge.<br>
&gt; &gt;&gt;<br>
&gt; &gt;&gt; Instant payments need a security upgrade, yes.<br>
&gt; &gt;&gt;<br>
&gt; &gt;&gt; --<br>
&gt; &gt;&gt; Jeff Garzik<br>
&gt; &gt;&gt; Bitcoin core developer and open source evangelist<br>
&gt; &gt;&gt; BitPay, Inc.=C2=A0 =C2=A0 =C2=A0 <a href=3D"https://bitpay.co=
m/" target=3D"_blank">https://bitpay.com/</a><br>
&gt; &gt;&gt;<br>
&gt; &gt;&gt;<br>
&gt; &gt;&gt; -------------------------------------------------------------=
-----------------<br>
&gt; &gt;&gt; Download BIRT iHub F-Type - The Free Enterprise-Grade BIRT Se=
rver<br>
&gt; &gt;&gt; from Actuate! Instantly Supercharge Your Business Reports and=
 Dashboards<br>
&gt; &gt;&gt; with Interactivity, Sharing, Native Excel Exports, App Integr=
ation &amp; more<br>
&gt; &gt;&gt; Get technology previously reserved for billion-dollar corpora=
tions, FREE<br>
&gt; &gt;&gt;<br>
&gt; &gt;&gt; <a href=3D"http://pubads.g.doubleclick.net/gampad/clk?id=3D19=
0641631&amp;iu=3D/4140/ostg.clktrk" target=3D"_blank">http://pubads.g.doubl=
eclick.net/gampad/clk?id=3D190641631&amp;iu=3D/4140/ostg.clktrk</a><br>
&gt; &gt;&gt; _______________________________________________<br>
&gt; &gt;&gt; Bitcoin-development mailing list<br>
&gt; &gt;&gt; <a href=3D"mailto:Bitcoin-development@lists.sourceforge.net">=
Bitcoin-development@lists.sourceforge.net</a><br>
&gt; &gt;&gt; <a href=3D"https://lists.sourceforge.net/lists/listinfo/bitco=
in-development" target=3D"_blank">https://lists.sourceforge.net/lists/listi=
nfo/bitcoin-development</a><br>
&gt; &gt;&gt;<br>
&gt; &gt;<br>
<br>
&gt; ----------------------------------------------------------------------=
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&gt; Bitcoin-development mailing list<br>
&gt; <a href=3D"mailto:Bitcoin-development@lists.sourceforge.net">Bitcoin-d=
evelopment@lists.sourceforge.net</a><br>
&gt; <a href=3D"https://lists.sourceforge.net/lists/listinfo/bitcoin-develo=
pment" target=3D"_blank">https://lists.sourceforge.net/lists/listinfo/bitco=
in-development</a><br>
<br>
<br>
</div></div><span class=3D"">--<br>
---------------------------------------------------------------------------=
-<br>
Troy Benjegerdes=C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=
=A0&#39;da hozer&#39;=C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=
=A0 =C2=A0 <a href=3D"mailto:hozer@hozed.org">hozer@hozed.org</a><br>
7 elements=C2=A0 =C2=A0 =C2=A0 earth::water::air::fire::mind::spirit::soul=
=C2=A0 =C2=A0 =C2=A0 =C2=A0 <a href=3D"http://grid.coop" target=3D"_blank">=
grid.coop</a><br>
<br>
=C2=A0 =C2=A0 =C2=A0 Never pick a fight with someone who buys ink by the ba=
rrel,<br>
=C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0nor try buy a hacker who makes money by t=
he megahash<br>
<br>
<br>
</span>--------------------------------------------------------------------=
----------<br>
Dive into the World of Parallel Programming The Go Parallel Website, sponso=
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___________________<br>
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<a href=3D"mailto:Bitcoin-development@lists.sourceforge.net">Bitcoin-develo=
pment@lists.sourceforge.net</a><br>
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" target=3D"_blank">https://lists.sourceforge.net/lists/listinfo/bitcoin-de=
velopment</a><br>
</div></div></blockquote></div><br></div>

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