Date: Tue, 06 Aug 2019 02:54:14 +0000
To: Chris Belcher <belcher@riseup.net>,
	Bitcoin Protocol Discussion <bitcoin-dev@lists.linuxfoundation.org>
From: ZmnSCPxj <ZmnSCPxj@protonmail.com>
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Subject: Re: [bitcoin-dev] Improving JoinMarket's resistance to sybil
	attacks using fidelity bonds
Precedence: list

Good morning Chris,


> This could be worked around by honest makers because they
> can consolidate TXOs on the blockchain, which rented TXO owners can't do
> because the TXOs are owned by different people.

Would it not be possible the below?

* I rent some funds from Dmitry.
  I agree to pay him 0.5 BTC for this service of putting up 50BTC from Dmit=
ry UTXO.
* I also own 50BTC myself in a separate UTXO.
* We create a funding transaction paying out to a Schnorr MuSig output that=
 is 2-of-2 between us.
  This spends Dmitry UTXO 50 BTC and my UTXO 50BTC.
  We only create this yet and do not sign.
* We create a backout transaction, probably with `nLockTime`, paying out 50=
.5BTC to Dmitry and 49.5BTC to me.
  This spends the funding transaction.
  We sign this using MuSig.
* After we exchange the signatures of the backout transaction, we exchange =
signatures for the funding transaction.
* Now we have a common 100BTC UTXO (indistinguishable from other Schnorr si=
ngle-sig UTXOs) that can be used as fidelity bond for me.
  This is the output of the funding transaction.

The above can be scaled up so I can rent arbitrary amounts of coin from man=
y different people, who are assured of getting their funds back, in exchang=
e for a fidelity bond / advertisement, and thus greatly destroying the prop=
erties of the V^2 tweak.

(The ability to have shared ownership of UTXOs is a powerful feature of Bit=
coin, and backs its ability to scale, as witnessed with Lightning Network a=
nd channel factories.)

Regards,
ZmnSCPxj