Date: Fri, 12 Jun 2020 08:39:35 +0000
To: Antoine Riard <antoine.riard@gmail.com>,
 Bitcoin Protocol Discussion <bitcoin-dev@lists.linuxfoundation.org>
From: ZmnSCPxj <ZmnSCPxj@protonmail.com>
Reply-To: ZmnSCPxj <ZmnSCPxj@protonmail.com>
Message-ID: <7cWQJzkWNEZCI2fYYrJCFxrmGfDGFAtsOyGpXRmB-g4Qhm2jzhyxLtuOIpJAr2CMJjAjri12lmR-h96ev3NWqaTgDtc_NN0yhyVxuIlBuzU=@protonmail.com>
In-Reply-To: <CALZpt+FqAWCAqCLF2HsajL84sOvst_X9_34bb_tvUxLFw=HTAA@mail.gmail.com>
References: <CALZpt+FqAWCAqCLF2HsajL84sOvst_X9_34bb_tvUxLFw=HTAA@mail.gmail.com>
MIME-Version: 1.0
Content-Type: text/plain; charset=utf-8
Content-Transfer-Encoding: quoted-printable
Subject: Re: [bitcoin-dev] CoinPool,
	exploring generic payment pools for Fun and Privacy
Precedence: list

Good morning Antoine and Gleb,

I have not studied the proposal in close detail yet, but anyway, my main ta=
keaway roughly is:

* The core of CoinPool is some kind of multiparticipant (N > 2) offchain up=
date mechanism (Decker-Wattenhofer or Decker-Russell-Osuntokun).
  * The output at each state of the update mechanism is some kind of splitt=
ing construction (which I have not studied in detail).
  * At each update of the state, all participants must sign off on the new =
state.

It seems to me that it would be possible to use a [WabiSabi protocol](https=
://lists.linuxfoundation.org/pipermail/bitcoin-dev/2020-June/017969.html) d=
uring negotiation of a new state.

Now, WabiSabi is a client-server protocol.
As all participants in the CoinPool are needed in order to ratify each new =
state anyway, they can simply elect one of their number by drawing lots, to=
 act as server for a particular state update.

Then the participants can operate as WabiSabi clients.
Each participant registers the outputs they currently own in the current st=
ate, getting credentials that sum up to the correct value.
Then, during the WabiSabi run, they can exchange credentials among the part=
icipants in order to perform value transfers inside the WabiSabi constructi=
on.
Then, at output registration, they register new outputs to put in the next =
state of the CoinPool.

In order to hide transfers from the elected WabiSabi server, participants c=
an maintain two coins in every state, and move coins randomly across the tw=
o coins they own at each state update, in order to hide "real" transfers fr=
om the elected server.

Then, after output registration, the participants ratify the new state by s=
igning off on the new state and revoking the previous state, using the upda=
te mechanism.

Of course, we should note that one desired feature for CoinPool in the orig=
inal proposal is that a participant can exit, and the CoinPool would still =
remain valid, but only for the remaining participants.

This is arguably a mild privacy leak: every other participant now knows how=
 much that particular participant took out from the CoinPool.
Indeed, from what I can understand, in order to properly set up the splitti=
ng transactions in the first place, at each state every participant needs t=
o know how much each other participant actually owns in the CoinPool at tha=
t point in time.

To hide how much each participant owns in the CoinPool from other participa=
nts, we would have to make unilateral closes expose all the current outputs=
, without trying to identify *which* participant exited the CoinPool, and t=
hus preventing anyone else from figuring out exactly how much each *other* =
participant actually owns in the CoinPool on exit.
That way, output addresses can be to fresh pseudonyms of the participant, r=
emoving all linkages of participant to amount they own, and each participan=
t can maintain multiple outputs per state for their own purposes and to mil=
dly obscure exactly how much they own in total.

If we drop that feature (of being able to exit a participant without closin=
g the *entire* CoinPool), of course, we need to mildly disincentivize a par=
ticipant closing unilaterally for trivial reasons.
We can do this by using `SIGHASH_ANYPREVOUT` to force whoever performs a un=
ilateral close of the CoinPool to pay the onchain fees involved, so that it=
 would have to be a good reason indeed to perform a unilateral close.


Regards,
ZmnSCPxj