From dave at dtrt.org  Mon Mar 28 16:18:39 2016
From: dave at dtrt.org (David A. Harding)
Date: Mon, 28 Mar 2016 12:18:39 -0400
Subject: [Lightning-dev] Breach tx vulnerability & CPFP attack
In-Reply-To: <55C4F22D-C7D0-40E7-8910-B008BA4842C0@gmail.com>
References: <55C4F22D-C7D0-40E7-8910-B008BA4842C0@gmail.com>
Message-ID: <20160328161839.GA13618@localhost.localdomain>

On Mon, Mar 28, 2016 at 11:19:42AM +0200, J?r?me Legoupil wrote:
> miners have a strong financial incentive to wait and hope to
> include Alice?s 25BTC offer instead of including Bob?s
> worthless breach tx.

I think you're treating miners here as a single actor when they should
be treated as multiple independent actors competing against each other.
Bob can have his breach transaction included in a block immediately but
the sequence lock on the 50 BTC Alice stole prevents her from spending
it for perhaps hundreds of blocks (I believe the paper uses a value of
1,500 blocks).

This means each miner on the network has a choice:

1. Attempt to mine Bob's transaction immediately to claim its modest fee
   before some other miner claims that fee.

2. Hope no one else mines Bob's transaction for several hundred blocks
   and then compete with all other miners to attempt to mine Alice's
   high-fee transaction.

If the network is functioning correctly (e.g. no miner or mining cartel
has a majority of hash rate) then all miners should consider option #1
to be the more profitable option for them on average.

-Dave