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From: Jeff Garzik <jgarzik@bitpay.com>
Date: Sat, 21 Feb 2015 17:47:28 -0500
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Cc: Bitcoin Development <bitcoin-development@lists.sourceforge.net>
Subject: Re: [Bitcoin-development] replace-by-fee v0.10.0rc4
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"scorched earth" refers to the _real world_ impact such policies would
have on present-day 0-conf usage within the bitcoin community.

All payment processors AFAIK process transactions through some scoring
system, then accept 0-conf transactions for payments.

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, negative
impact on present day bitcoin payments, thus "scorched earth"

Without adequate decentralized solutions for instant payments,
deploying replace-by-fee widely would simply push instant transactions
even more into the realm of centralized, walled-garden services.






On Sat, Feb 21, 2015 at 3:30 PM, Mark Friedenbach <mark@friedenbach.org> wr=
ote:
> Thank you Jorge for the contribution of the Stag Hunt terminology. It is
> much better than a politically charged "scorched earth".
>
> On Feb 21, 2015 11:10 AM, "Jorge Tim=C3=B3n" <jtimon@jtimon.cc> wrote:
>>
>> I agree "scorched hearth" is a really bad name for the 0 conf protocol
>> based on game theory. I would have preferred "stag hunt" since that's
>> basically what it's using (see http://en.wikipedia.org/wiki/Stag_hunt)
>> but I like the protocol and I think it would be interesting to
>> integrate it in the  payment protocol.
>> Even if that protocol didn't existed or didn't worked, replace-by-fee
>> is purely part of a node's policy, not part of consensus.
>> >From the whitepaper, 0 conf transactions being secure by the good will
>> of miners was never an assumption, and it is clear to me that the
>> system cannot provide those guaranties based on such a weak scheme. I
>> believe thinking otherwise is naive.
>> As to consider non-standard policies "an attack to bitcoin" because
>> "that's not how bitcoin used to work", then I guess minimum relay fee
>> policies can also be considered "an attack to bitcoin" on the same
>> grounds.
>> Lastly, "first-seen-wins" was just a simple policy to bootstrap the
>> system, but I expect that most nodes will eventually move to policies
>> that are economically rational for miners such as replace-by-fee.
>> Not only I disagree this will be "the end of bitcoin" or "will push
>> the price of the btc miners are mining down", I believe it will be
>> something good for bitcoin.
>> Since this is apparently controversial I don't want to push for
>> replace-by-fee to become the new standard policy (something that would
>> make sense to me). But once the policy code is sufficiently modular as
>> to support several policies I would like bitcoin core to have a
>> CReplaceByFeePolicy alongside CStandardPolicy and a CNullPolicy (no
>> policy checks at all).
>> One step at a time I guess...
>>
>>
>> On Thu, Feb 19, 2015 at 9:56 AM, Troy Benjegerdes <hozer@hozed.org> wrot=
e:
>> > On Sun, Feb 15, 2015 at 11:40:24PM +0200, Adam Gibson wrote:
>> >>
>> >>
>> >> On 02/15/2015 11:25 PM, Troy Benjegerdes wrote:
>> >> >
>> >> > Most money/payment systems include some method to reverse or undo
>> >> > payments made in error. In these systems, the longer settlement
>> >> > times you mention below are a feature, not a bug, and give more
>> >> > time for a human to react to errors and system failures.
>> >> >
>> >>
>> >> Settlement has to be final somewhere. That is the whole point of it.
>> >> Transfer costs in current electronic payment systems are a direct
>> >> consequence of their non-finality. That's the point Satoshi was makin=
g
>> >> in the introduction to the whitepaper: "With the possibility of
>> >> reversal, the need for trust spreads".
>> >
>> > The problem with that statement is I trust a merchant that I went into
>> > a store and made a payment with personally more than I trust the
>> > firmware
>> > on my hard drive [1].
>> >
>> > The attack surface of devices in your computer is huge. A motivated
>> > attacker
>> > just needs to get an intern into a company that makes some kind of
>> > component
>> > or system that's in your computer, cloud server, hardware wallet, or
>> > what
>> > have you that has firmware capable of reading your private keys.
>> >
>> > With the possibility of mass trojaned hardware, if we are going to tru=
st
>> > the system, it must somehow allow reversal through a human-in-the-loop=
.
>> >
>> >> There is nothing wrong with having reversible mechanisms built on top
>> >> of Bitcoin, and indeed it makes sense for most activity to happen at
>> >> those higher layers. It's easy to build things that way, but
>> >> impossible to build them the other way: you can't build a
>> >> non-reversible layer on top of a reversible layer.
>> >
>> > We built 'reliable' TCP on top of unreliable ethernet networks. My
>> > experience
>> > with networking was if you tried to guarantee message delivery at the
>> > lowest
>> > level, the system got exceedingly complicated, expensive, and brittle.
>> >
>> > Most applications, in particular paying someone you already trust, are
>> > quite
>> > happy running on reversible systems, and in some cases more reliable a=
nd
>> > lower risk. (carrying non-reversible cash is generally considered risk=
y)
>> >
>> > The problem is that if the base currency is assumed to be
>> > non-reversible,
>> > then it's brittle and becomes 'too big to fail'.
>> >
>> > Where the blockchain improves on everything else is in transparency. I=
f
>> > you
>> > reverse transactions a lot, it will be obvious from an analysis. I wou=
ld
>> > much
>> > rather deal with a known, predictable, and relatively continous
>> > transaction
>> > reversal rate (percentage) than have to deal with sudden failures wher=
e
>> > some anonymous bad actor makes off with a fortune.
>> >
>> > We already have zero-conf double-spend transaction reversal, why not
>> > explicitly
>> > extend that a little in a way that senders and receivers have a choice
>> > to
>> > use it, or not?
>> >
>> >
>> > [1]
>> > http://www.reuters.com/article/2015/02/16/us-usa-cyberspying-idUSKBN0L=
K1QV20150216
>> >
>> >
>> > ----------------------------------------------------------------------=
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>>
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--=20
Jeff Garzik
Bitcoin core developer and open source evangelist
BitPay, Inc.      https://bitpay.com/