Re: [bitcoin-dev] Let's deploy BIP65 CHECKLOCKTIMEVERIFY!

[Anthony Towns <aj@erisian.com.au>]

On Tue, Sep 29, 2015 at 06:31:28PM +0000, Gregory Maxwell via bitcoin-dev wrote:
> On Mon, Sep 28, 2015 at 10:48 AM, Mike Hearn via bitcoin-dev
> <bitcoin-dev@lists.linuxfoundation.org> wrote:
> > There is no consensus on using a soft fork to deploy this feature. It will
> > result in the same problems as all the other soft forks - SPV wallets will
> > become less reliable during the rollout period. I am against that, as it's
> > entirely avoidable.
> > Make it a hard fork and my objection will be dropped.
> I'm surprised to see this response-- [...]
> I am having a little difficulty making sense of this complaint. [...]

I think I finally understand this objection.

For a hard fork, activated by a majority of nodes/hashpower upgrading
to a new bitcoin release, the behaviour is:

 - upgraded bitcoin nodes: everything works fine

 - non-upgraded bitcoin nodes: total breakage. there will be a push
   alert telling you to upgrade. anyone who doesn't will think they're
   tracking "bitcoin" but will actually be tracking a new "bitcoin-old"
   altcoin. most non-upgraded miners will presumably realise they're
   wasting hashpower and stop doing this pretty quick; and remaining
   miners will only create blocks very slowly due to sudden reduced
   hashpower, without possibility of difficulty adjustment. users who
   don't uprade will try to do transactions, but won't see them confirm
   for hours or days due to lack of hashpower.

 - SPV nodes: they track the upgraded majority, everything works fine
   even if they don't upgrade

For a soft fork, again activated by the majority of upgraded hashpower,
the behaviour is:

 - upgraded bitcoin nodes: everything works fine

 - non-upgraded bitcoin miners willing to mine newly unacceptable txs:
   may produce orphaned blocks; may be able to be forced into producing
   blocks that will be orphaned

 - other non-upgraded bitcoin nodes: everything works fine

 - SPV nodes: partial breakage -- may track invalid blocks for 1-2
   confirmations until the set of "non-upgraded bitcoin miners willing
   to produce newly unacceptable txs" becomes vanishingly few.

In the hard fork case, all non-upgraded nodes get a DoS attack, but
aren't likey to be hit by doublespends. That's inconvenient, but it's
not too bad.

In the soft fork case, if there's likely to be old nodes mining
previously invalid transactions, SPV clients become very unreliable,
to the point of possibly seeing semi-regular double-spends with 1 or
2 confirmation, until miners that aren't paying attention notice their
blocks are getting orphaned and upgrade. That is pretty bad IMHO; and
there are a lot more *people* running SPV clients than bitcoin nodes,
so its impact is potentially worse in both ways.

Comparing generic hard forks versus generic soft forks, the above says
to me that a hard fork would be less harmful to users in general, and
thus a better approach.

*But* a soft fork that only forbids transactions that would previously
not have been mined anyway should be the best of both worlds, as it
automatically reduces the liklihood of old miners building newly invalid
blocks to a vanishingly small probability; which means that upgraded
bitcoin nodes, non-upgraded bitcoin nodes, /and/ SPV clients *all*
continuing to work fine during the upgrade.

AFAICS, that's what BIP65 achieves, as will similar OP_NOP* replacements
like BIP112.

But that only applies to a subset of potential soft forks, not every
soft fork.

Maybe a good way to think about it is something like this.  Consensus
(IsValid) is always less restrictive than (default) policy (previously
IsStandard, not sure how to summarise it now, maybe it's just OP_NOP
redefinition?).  So choosing a new consensus rule will be one of:

  * even less restrictive than consensus (hard fork)

  * more restrictive than consensus, but less restrictive than policy
    (safe soft fork)

  * more restrictive than IsStandard etc (damaging soft fork)

Hmm, in particular, following this line of thinking it's not clear to
me that BIP68 is actually less restrictive than current policy? At
least, I can't see anything that prevents txs with nSequence set to
something other than 0 or ~0 from being relayed?

If it's not, and nodes currently happily mine and relay transactions
with nSequence set without caring what it's set to, doesn't this mean
BIP68 is of the "damaging soft fork" variety? That is, if it activated
as a soft-fork with a majority of miners using it, but a minority of ~5%
not upgraded, then

 - someone could construct an tx with nSequence set to sometime in
   the future, but not using OP_CSV

 - this tx would get relayed by old nodes (but not upgraded nodes
   due to CheckLockTime)

 - non-upgraded miners would mine it into a block immediately, which
   would then get orphaned by majority hashpower

 - before it got orphaned, non-upgraded nodes and SPV clients would
   be misled and vulnerable to double spend attacks of txs with 0, 1 or
   maybe 2 confirmations

(BIP65 with OP_CLTV and BIP112 with OP_CSV don't have that problem as
they both redefine a non-standard opcode and would not get relayed or
mined by old, non-upgraded nodes, and are thus "safe soft forks" per
above terminology. This is just BIP68)

Can anyone confirm or refute the above?

Cheers,
aj