From mboxrd@z Thu Jan 1 00:00:00 1970 Return-Path: Received: from fraxinus.osuosl.org (smtp4.osuosl.org [140.211.166.137]) by lists.linuxfoundation.org (Postfix) with ESMTP id 53D10C004D for ; Tue, 11 Aug 2020 12:06:08 +0000 (UTC) Received: from localhost (localhost [127.0.0.1]) by fraxinus.osuosl.org (Postfix) with ESMTP id 5074785608 for ; Tue, 11 Aug 2020 12:06:08 +0000 (UTC) X-Virus-Scanned: amavisd-new at osuosl.org Received: from fraxinus.osuosl.org ([127.0.0.1]) by localhost (.osuosl.org [127.0.0.1]) (amavisd-new, port 10024) with ESMTP id YR9H3kInvK2J for ; Tue, 11 Aug 2020 12:06:06 +0000 (UTC) X-Greylist: domain auto-whitelisted by SQLgrey-1.7.6 Received: from mx1.riseup.net (mx1.riseup.net [198.252.153.129]) by fraxinus.osuosl.org (Postfix) with ESMTPS id C9BFA85621 for ; Tue, 11 Aug 2020 12:06:06 +0000 (UTC) Received: from bell.riseup.net (bell-pn.riseup.net [10.0.1.178]) (using TLSv1 with cipher ECDHE-RSA-AES256-SHA (256/256 bits)) (Client CN "*.riseup.net", Issuer "Sectigo RSA Domain Validation Secure Server CA" (not verified)) by mx1.riseup.net (Postfix) with ESMTPS id 4BQs4G3XL3zFcty for ; Tue, 11 Aug 2020 05:06:06 -0700 (PDT) DKIM-Signature: v=1; a=rsa-sha256; c=relaxed/simple; d=riseup.net; s=squak; t=1597147566; bh=xJe6yznSMveVNjNJb8WKxmFTF3sDmUnhg95FP86LF7I=; h=To:From:Subject:Date:From; b=D/25pGxxrMEZIkgTB4XPh8eoyF1PTWFHAxDG6WDIJtGSbN083OGcxXKbirb8rT89K DOWpnXnT4jLEPAIm9zqvEAiKgb5hkcWaeCnqLqAKJLrpnmY3U6WtO+sTlRhXuVzQJ4 thC7mMiiL8IHCbrzE0HGkhfcARdd7PPimUmWlbkw= X-Riseup-User-ID: 1577B0581121C4DB0382FE34E4F33225E211B1BE4BB98C7C69B83F77C65AD7F4 Received: from [127.0.0.1] (localhost [127.0.0.1]) by bell.riseup.net (Postfix) with ESMTPSA id 4BQs4F5fL8zJn9y for ; Tue, 11 Aug 2020 05:06:05 -0700 (PDT) To: bitcoin-dev@lists.linuxfoundation.org From: Chris Belcher Autocrypt: addr=belcher@riseup.net; prefer-encrypt=mutual; keydata= xsFNBFPk74oBEACzBLjd+Z5z7eimqPuObFTaJCTXP7fgZjgVwt+q94VQ2wM0ctk/Ft9w2A92 f14T7PiHaVDjHxrcW+6sw2VI2f60T8Tjf+b4701hIybluWL8DntG9BW19bZLmjAj7zkgektl YNDUrlYcQq2OEHm/MGk6Ajt2RA56aRKqoz22e+4ZA89gDgamxUAadul7AETSsgqOEUDI0FKR FODzoH65w1ien/DLkG1f76jd0XA6AxrESJVO0JzvkTnJGElBcA37rYaMmDi4DhG2MY4u63VE 8h6DyUXcRhmTZIAj+r+Ht+KMDiuiyQcKywCzzF/7Ui7YxqeAgjm5aPDU2E8X9Qd7cqHQzFM7 ZCqc9P6ENAk5a0JjHw0d0knApboSvkIJUB0j1xDIS0HaRlfHM4TPdOoDgnaXb7BvDfE+0zSz WkvAns9oJV6uWdnz5kllVCjgB/FXO4plyFCHhXikXjm1XuQyL8xV88OqgDFXwVhKrDL9Pknu sTchYm3BS2b5Xq1HQqToT3I2gRGTtDzZVZV0izCefJaDp1mf49k2cokDEfw9MroEj4A0Wfht 0J64pzlBYn/9zor5cZp/EAblLRDK6HKhSZArIiDR1RC7a6s7oTzmfn0suhKDdTzkbTAnDsPi Dokl58xoxz+JdYKjzVh98lpcvMPlbZ+LwIsgbdH4KZj7mVOsJwARAQABzR9DaHJpcyBCZWxj aGVyIDxmYWxzZUBlbWFpbC5jb20+wsF+BBMBAgAoBQJT5O+KAhsDBQkSzAMABgsJCAcDAgYV CAIJCgsEFgIDAQIeAQIXgAAKCRDvc06md/MRKS8jD/9P9fSYSIVjltL9brAMfIu7wJn0H0lX TbcuCM2uQitJ3BNxI3c7aq5dEby27u5Ud54otncDJuRPQVDKs6H7t1rInitgJ1MTQ9/aQGFA btKcgtVIMFbeClzTTfWr4W7fE45NI7E9EANgk5JfmWh3U+KINYLF5RtqynYocrsP6zOV+G9A HCpBemd9TN60CoMLMyMzTHEW1oQffaVAXY8DgthEYO/odWYIod7VTmEm0zU1aSysPqMwPWNm 8XIl0f8SfKQyZlAU8e1eCFVCenkE44FKC5qQNYc2UxexEYtfCWChTGc4oHKxIyYmTCCefsQF LvgwtvlNHRXHSDKSPSNcRcpl8DFpNEKrmMlkJ8Mx+YR05CydlTQ0bI3FBohJC+UHrjD5I3hA wJUC1o+yVSOEd+zN3cG1EECIwkEQSmBgG5t/le2RdzfXOdpf9ku2/zoBpq00R54JxUKlfRM7 OPTv7X+1AKHkxOySdCZwGgvdh2Whuqs4kTvtco00gCFM9fBd5oi1RJuHtxHsj8+/XU15UItb jeo96CIlM5YUeoRLPT5mxZYWgYAARFeSFReNq/Tuwq9d8EokUrtAyrPayznliy53UJfWDVzl 925c0Cz0HWaP2fWj+uFcj/8K0bhptuWJQy0Poht1z3aJC1UjEgr1Xz8I7jeSJmIlA9plcJw2 k4dhWc7BTQRT5O+KARAAyFxAM28EQwLctr0CrQhYWZfMKzAhCw+EyrUJ+/e4uiAQ4OyXifRr ZV6kLRul3WbTB1kpA6wgCShO0N3vw8fFG2Cs6QphVagEH8yfQUroaVxgADYOTLHMOb7INS8r KI/uRNmE6bXTX27oaqCEXLMycqYlufad7hr42S/T8zNh5m2vl6T/1Poj2/ormViKwAxM+8qf xd8FNI4UKmq2zZE9mZ5PiSIX0qRgM0yCvxV39ex/nhxzouTBvv4Lb1ntplR/bMLrHxsCzhyM KDgcX7ApGm+y6YEsOvzw9rRCRuJpE4lth8ShgjTtNTHfklBD6Ztymc7q7bdPWpKOEvO5lDQ6 q8+KfENv862cOLlWLk7YR2+mHZ1PXGhWC7ggwEkfGJoXo0x8X+zgUKe2+9Jj4yEhfL0IbFYC z2J5d+cWVIBktI3xqkwLUZWuAbE3vgYA4h8ztR6l18NTPkiAvpNQEaL4ZRnAx22WdsQ8GlEW dyKZBWbLUdNcMmPfGi5FCw2nNvCyN6ktv5mTZE12EqgvpzYcuUGQPIMV9KTlSPum3NLDq8QI 6grbG8iNNpEBxmCQOKz2/BuYApU2hwt2E44fL8e6CRK3ridcRdqpueg75my6KkOqm8nSiMEc /pVIHwdJ9/quiuRaeC/tZWlYPIwDWgb8ZE/g66z35WAguMQ+EwfvgAUAEQEAAcLBZQQYAQIA DwUCU+TvigIbDAUJEswDAAAKCRDvc06md/MRKaZwD/9OI3o3gVmst/mGx6hVQry++ht8dFWN IiASPBvD3E5EWbqWi6mmqSIOS6CxjU0PncxTBPCXtzxo/WzuHGQg/xtNeQ0T8b2lBScZAw93 qm1IcHXLUe5w/Tap6YaDmSYCIZAdtbHzYfPW4JK7cmvcjvF8jhTFOBEOFVQkTi19G7caVot0 +wL1e2DRHDXAe5CinEpaLBlwHeEu/5j6wc3erohUZlK9IbAclj4iZTQbaq3EyqUXl59dBOON xmL5edJxzVishIYQGIyA9WP1SylXt+kO82NEqZG2OxdXAlzjuJ8C2pAG+nbLtDo4hcsiN/MA aX9/JB7MXclT5ioerF4yNgKEdfq7LmynsTUd8w/Ilyp7AD+BWoujyO94i8h9eKvjf9PvSwxQ uAjRpxne7ZJD8vCsMNXBHSbeEK2LiwStHL/w473viXpDD53J6OLxX6a5RummR+rixbMH7dgK MJQ7FlyDphm3or6CSkGEir1KA0y1vqQNFtHhguFapAWMDKaJjQQNgvZUmOo6hbZqmvUF1OWc d6GA6j3WOUe3fDJXfbq6P9Jmxq64op887dYKsg7xjQq/7KM7wyRcqXXcbBdgvNtVDP+EnzBN HyYY/3ms4YIHE5JHxQ9LV4yPcWkYTvb1XpNIFVbrSXAeyGHVNT+SO6olFovbWIC3Az9yesaM 1aSoTg== Message-ID: <813e51a1-4252-08c0-d42d-5cef32f684bc@riseup.net> Date: Tue, 11 Aug 2020 13:05:57 +0100 MIME-Version: 1.0 Content-Type: text/plain; charset=utf-8 Content-Language: en-US Content-Transfer-Encoding: 7bit Subject: [bitcoin-dev] Detailed protocol design for routed multi-transaction CoinSwap X-BeenThere: bitcoin-dev@lists.linuxfoundation.org X-Mailman-Version: 2.1.15 Precedence: list List-Id: Bitcoin Protocol Discussion List-Unsubscribe: , List-Archive: List-Post: List-Help: List-Subscribe: , X-List-Received-Date: Tue, 11 Aug 2020 12:06:08 -0000 I'm currently working on implementing CoinSwap (see my other email "Design for a CoinSwap implementation for massively improving Bitcoin privacy and fungibility"). CoinSwaps are special because they look just like regular bitcoin transactions, so they improve the privacy even for people who do not use them. Once CoinSwap is deployed, anyone attempting surveillance of bitcoin transactions will be forced to ask themselves the question: how do we know this transaction wasn't a CoinSwap? This email contains a detailed design of the first protocol version. It makes use of the building blocks of multi-transaction CoinSwaps, routed CoinSwaps, liquidity market, private key handover, and fidelity bonds. It does not include PayJoin-with-CoinSwap, but that's in the plan to be added later. == Routed CoinSwap == Diagram of CoinSwaps in the route: Alice ====> Bob ====> Charlie ====> Alice Where (====>) means one CoinSwap. Alice gives coins to Bob, who gives coins to Charlie, who gives coins to Alice. Alice is the market taker and she starts with the hash preimage. She chooses the CoinSwap amount and chooses who the makers will be. This design has one market taker and two market makers in its route, but it can easily be extended to any number of makers. == Multiple transactions == Each single CoinSwap is made up of multiple transactions to avoid amount correlation (a0 BTC) ---> (b0 BTC) ---> (c0 BTC) ---> Alice (a1 BTC) ---> Bob (b1 BTC) ---> Charlie (c1 BTC) ---> Alice (a2 BTC) ---> (b2 BTC) ---> (c2 BTC) ---> The arrow (--->) represent funding transactions. The money gets paid to a 2-of-2 multisig but after the CoinSwap protocol and private key handover is done they will be controlled by the next party in the route. This example has 6 regular-sized transactions which use approximately the same amount of block space as a single JoinMarket coinjoin with 6 parties (1 taker, 5 makers). Yet the privacy provided by this one CoinSwap would be far far greater. It would not have to be repeated in the way that Equal-Output CoinJoins must be. == Direct connections to Alice === Only Alice, the taker, knows the entire route, Bob and Charlie just know their previous and next transactions. Bob and Charlie do not have direct connections with each other, only with Alice. Diagram of Tor connections: Bob Charlie | / | / | / Alice When Bob and Charlie communicate, they are actually sending and receiving messages via Alice who relays them to Charlie or Bob. This helps hide whether the previous or next counterparty in a CoinSwap route is a maker or taker. This doesn't have security issues even in the final steps where private keys are handed over, because those private keys are always for 2-of-2 multisig and so on their own are never enough to steal money. === Miner fees === Makers have no incentive to pay any miner fees. They only do transactions which earn them an income and are willing to wait a very long time for that to happen. By contrast takers want to create transactions far more urgently. In JoinMarket we coded a protocol where the maker could contribute to miner fees, but the market price offered of that trended towards zero. So the reality is that takers will pay all the miner fees. Also because makers don't know the taker's time preference they don't know how much they should pay in miner fees. The taker will have to set limits on how large the maker's transactions are, otherwise makers could abuse this by having the taker consolidate maker's UTXOs for free. == Funding transaction definitions == Funding transactions are those which pay into the 2-of-2 multisig addresses. Definitions: I = initial coinswap amount sent by Alice = a0 + a1 + a2 (WA, WB, WC) = Total value of UTXOs being spent by Alice, Bob, Charlie respectively. Could be called "wallet Alice", "wallet Bob", etc (B, C) = Coinswap fees paid by Alice and earned by Bob and Charlie. (M1, M2, M3) = Miner fees of the first, second, third, etc sets of funding transactions. Alice will choose what these are since she's paying. multisig(A+B) = A 2of2 multisig output with private keys held by A and B The value in square parentheses refers to the bitcoin amount. Alice funding txes [WA btc] ---> multisig (Alice+Bob) [I btc] change [WA-M1-I btc] Bob funding txes [WB btc] ---> multisig (Bob+Charlie) [I-M2-B btc] change [WB-I+B btc] Charlie funding txes [WC btc] ---> multisig (Charlie+Alice) [(I-M2-B)-M3-C btc] change [WC-(I-M2-B)+C btc] Here we've drawn these transactions as single transactions, but they are actually multiple transactions where the outputs add up some value (e.g. add up to I in Alice's transactions.) === Table of balances before and after a successful CoinSwap === If a CoinSwap is successful then all the multisig outputs in the funding transactions will become controlled unilaterally by one party. We can calculate how the balances of each party change. Party | Before | After --------|--------|------------------------------------------- Alice | WA | WA-M1-I + (I-M2-B)-M3-C = WA-M1-M2-M3-B-C Bob | WB | WB-I+B + I = WB+B Charlie | WC | WC-(I-M2-B)+C + I-M2-B = WC+C After a successful coinswap, we see Alice's balance goes down by the miner fees and the coinswap fees. Bob's and Charlie's balance goes up by their coinswap fees. == Contract transaction definitions == Contract transactions are those which may spend from the 2-of-2 multisig outputs, they transfer the coins into a contract where the coins can be spent either by waiting for a timeout or providing a hash preimage value. Ideally contract transactions will never be broadcast but their existence keeps all parties honest. M~ is miner fees, which we treat as a random variable, and ultimately set by whichever pre-signed RBF tx get mined. When we talk about _the_ contract tx, we actually mean perhaps 20-30 transactions which only differ by the miner fee and have RBF enabled, so they can be broadcasted in sequence to get the contract transaction mined regardless of the demand for block space. (Alice+timelock_A OR Bob+hash) = Is an output which can be spent either with Alice's private key after waiting for a relative timelock_A, or by Bob's private key by revealing a hash preimage value Alice contract tx: multisig (Alice+Bob) ---> (Alice+timelock_A OR Bob+hash) [I btc] [I-M~ btc] Bob contract tx: multisig (Bob+Charlie) ---> (Bob+timelock_B OR Charlie+hash) [I-M2-B btc] [I-M2-B-M~ btc] Charlie contract tx: multisig (Charlie+Alice) ---> (Charlie+timelock_C OR Alice+hash) [(I-M2-B)-M3-C btc] [(I-M2-B)-M3-C-M~ btc] === Table of balances before/after CoinSwap using contracts transactions === In this case the parties had to get their money back by broadcasting and mining the contract transactions and waiting for timeouts. Party | Before | After --------|--------|-------------------------------------------- Alice | WA | WA-M1-I + I-M~ = WA-M1-M~ Bob | WB | WB-I+B + I-M2-B-M~ = WB-M2-M~ Charlie | WC | WC-(I-M2-B)+C + (I-M2-B)-M3-C-M~ = WC-M3-M~ In the timeout failure case, every party pays for their own miner fees. And nobody earns or spends any coinswap fees. So even for a market maker its possible for their wallet balance to go down sometimes, although as we shall see there are anti-DOS features which make this unlikely to happen often. A possible attack by a malicious Alice is that she chooses M1 to be very low (e.g. 1 sat/vbyte) and sets M2 and M3 to be very high (e.g. 1000 sat/vb) and then intentionally aborts, forcing the makers to lose much more money in miner fees than the attacker. The attack can be used to waste away Bob's and Charlie's coins on miner fees at little cost to the malicious taker Alice. So to defend against this attack Bob and Charlie must refuse to sign a contract transaction if the corresponding funding transaction pays miner fees greater than Alice's funding transaction. There can also be a failure case where each party gets their money using hash preimage values instead of timeouts. Note that each party has to sweep the output before the timeout expires, so that will cost an additional miner fee M~. Party | Before | After --------|--------|------------------------------------------------------ Alice | WA | WA-M1-I + (I-M2-B)-M3-C-M~ - M~ = WA-M1-M2-M3-B-C-2M~ Bob | WB | WB-I+B + I-M~ - M~ = WB+B-2M~ Charlie | WC | WC-(I-M2-B)+C + I-M2-B-M~ - M~ = WC+C-2M~ In this situation the makers Bob and Charlie earn their CoinSwap fees, but they pay an additional miner fee twice. Alice pays for all the funding transaction miner fees, and the CoinSwap fees, and two additional miner fees. And she had her privacy damaged because the entire world saw on the blockchain the contract script. Using the timelock path is like a refund, everyone's coin just comes back to them. Using the preimage is like the CoinSwap transaction happened, with the coins being sent ahead one hop. Again note that if the preimage is used then coinswap fees are paid. === Staggered timelocks === The timelocks are staggered so that if Alice uses the preimage to take coins then the right people will also learn the preimage and have enough time to be able to get their coins back too. Alice starts with knowledge of the hash preimage so she must have a longest timelock. == EC tweak to reduce one round trip == When two parties are agreeing on a 2-of-2 multisig address, they need to agree on their public keys. We can avoid one round trip by using the EC tweak trick. When Alice, the taker, downloads the entire offer book for the liquidity market, the offers will also contain a EC public key. Alice can tweak this to generate a brand new public key for which the maker knows the private key. This public key will be one of the keys in the 2-of-2 multisig. This feature removes one round trip from the protocol. q = EC privkey generated by maker Q = q.G = EC pubkey published by maker p = nonce generated by taker P = p.G = nonce point calculated by taker R = Q + P = pubkey used in bitcoin transaction = (q + p).G Taker sends unsigned transaction which pays to multisig using pubkey Q, and also sends nonce p. The maker can use nonce p to calculate (q + p) which is the private key of pubkey R. Taker doesnt know the privkey because they are unable to find q because of the ECDLP. Any eavesdropper can see the nonce p and easily calculate the point R too but Tor communication is encrypted so this isnt a concern. None of the makers in the route know each other's Q values, so Alice the taker will generate a nonce p on their behalf and send it over. I believe this cant be used for any kind of attack, because the signing maker will always check that the nonce results in the public key included in the transaction they're signing, and they'll never sign a transaction not in their interests. == Protocol == This section is the most important part of this document. Definitions: fund = all funding txes (remember in this multi-tx protocol there can be multiple txes which together make up the funding) A htlc = all htlc contract txes (fully signed) belonging to party A A unsign htcl = all unsigned htlc contract txes belonging to party A including the nonce point p used to calculate the maker's pubkey. p = nonce point p used in the tweak EC protocol for calculating the maker's pubkey A htlc B/2 = Bob's signature for the 2of2 multisig of the Alice htlc contract tx privA(A+B) = private key generated by Alice in the output multisig (Alice+Bob) | Alice | Bob | Charlie | |=================|=================|=================| 0. A unsign htlc ----> | | 1. <---- A htlc B/2 | | 2. ***** BROADCAST AND MINE ALICE FUNDING TXES ****** | 3. A fund+htlc+p ----> | | 4. | B unsign htlc ----> | 5. | <---- B htlc C/2 | 6. ******* BROADCAST AND MINE BOB FUNDING TXES ******* | 7. | B fund+htlc+p ----> | 8. <---------------------- C unsign htlc | 9. C htlc A/2 ----------------------> | A. ***** BROADCAST AND MINE CHARLIE FUNDING TXES ***** | B. <---------------------- C fund+htlc+p | C. hash preimage ----------------------> | D. hash preimage ----> | | E. privA(A+B) ----> | | F. | privB(B+C) ----> | G. <---------------------- privC(C+A) | == Protocol notes == 0-2 are the steps which setup Alice's funding tx and her contract tx for possible refund 4-5 same as 0-2 but for Bob 8-9 same as 0-2 but for Charlie 3,7 is proof to the next party that the previous party has already committed miner fees to getting a transaction mined, and therefore this isnt a DOS attack. The step also reveals the fully-signed contract transaction which the party can use to get their money back with a preimage. C-G is revealing the hash preimage to all, and handing over the private keys == Analysis of aborts == We will now discuss aborts, which happen when one party halts the protocol and doesnt continue. Perhaps they had a power cut, their internet broke, or they're a malicious attacker wanting to waste time and money. The other party may try to reestablish a connection for some time, but eventually must give up. Number refers to the step number where the abort happened e.g. step 1 means that the party aborted instead of the action happening on protocol step 1. The party name refers to what that party does e.g. Party1: aborts, Party2/Party3: does a thing in reaction 0. Alice: aborts. Bob/Charlie: do nothing, they havent lost any time or money 1. Bob: aborts. Alice: lost no time or money, try with another Bob. Charlie: do nothing 2-3. same as 0. 4. Bob: aborts. Charlie: do nothing. Alice: broadcasts her contract tx and waits for the timeout, loses time and money on miner fees, she'll never coinswap with Bob's fidelity bond again. 5. Charlie: aborts. Alice/Bob: lose nothing, find another Charlie to coinswap with. 6. same as 4. 7. similar to 4 but Alice MIGHT not blacklist Bob's fidelity bond, because Bob will also have to broadcast his contract tx and will also lose time and money. 8. Charlie: aborts. Bob: broadcast his contract transaction and wait for the timeout to get his money back, also broadcast Alice's contract transaction in retaliation. Alice: waits for the timeout on her htlc tx that Bob broadcasted, will never do a coinswap with Charlie's fidelity bond again. 9. Alice: aborts. Charlie: do nothing, no money or time lost. Bob: broadcast bob contract tx and wait for timeout to get money back, comforted by the knowledge that when Alice comes back online she'll have to do the same thing and waste the same amount of time and money. A-B. same as 8. C-E. Alice: aborts. Bob/Charlie: all broadcast their contract txes and wait for the timeout to get their money back, or if Charlie knows the preimage he uses it to get the money immediately, which Bob can read from the blockchain and also use. F. Bob: aborts. Alice: broadcast Charlie htlc tx and use preimage to get money immediately, Alice blacklists Bob's fidelity bond. Charlie: broadcast Bob htlc and use preimage to get money immediately. G. Charlie: aborts. Alice: broadcast Charlie htlc and use preimage to get money immediately, Alice blacklists Charlie's fidelity bond. Bob: does nothing, already has his privkey. ==== Retaliation as DOS-resistance ==== In some situations (e.g. step 8.) if one maker in the coinswap route is the victim of a DOS they will retaliate by DOSing the previous maker in the route. This may seem unnecessary and unfair (after all why waste even more time and block space) but is actually the best way to resist DOS because it produces a concrete cost every time a DOS happens. == Analysis of deviations == This section discusses what happens if one party deviates from the protocol by doing something else, for example broadcasting a htlc contract tx when they shouldnt have. The party name refers to what that party does, followed by other party's reactions to it. e.g. Party1: does a thing, Party2/Party3: does a thing in reaction If multiple deviations are possible in a step then they are numbered e.g. A1 A2 A2 etc 0-2. Alice/Bob/Charlie: nothing else is possible except following the protocol or aborting 3. Alice: broadcasts one or more of the A htlc txes. Bob/Charlie/Dennis: do nothing, they havent lost any time or money. 4-6. Bob/Charlie: nothing else is possible except following the protocol or aborting. 7. Bob: broadcasts one or more of the B htlc txes, Alice: broadcasts all her own A htlc txes and waits for the timeout to get her money back. Charlie: do nothing 8. Charlie: nothing else is possible except following the protocol or aborting. 9. Alice: broadcasts one or more of the A htlc txes. Bob: broadcasts all his own A htlc txes and waits for the timeout. A. same as 8. B. Charlie: broadcasts one or more of the C htlc txes, Alice/Bob: broadcasts all their own htlc txes and waits for the timeout to get their money back. C-E1. Alice: broadcasts all of C htlc txes and uses her knowledge of the preimage hash to take the money immediately. Charlie: broadcasts all of B htlc txes and reading the hash value from the blockchain, uses it to take the money from B htlc immediately. Bob: broadcasts all of A htlc txes, and reading hash from the blockchain, uses it to take the money from A htlc immediately. C-E2. Alice: broadcast her own A htlc txes, and after a timeout take the money. Bob: broadcast his own B htlc txes and after the timeout take their money. Charlie: broadcast his own C htlc txes and after the timeout take their money. F1. Bob: broadcast one or more of A htcl txes and use the hash preimage to get the money immediately. He already knows both privkeys of the multisig so this is pointless and just damages privacy and wastes miner fees. Alice: blacklist Bob's fidelity bond. F2. Bob: broadcast one or more of the C htlc txes. Charlie: use preimage to get his money immediately. Bob's actions were pointless. Alice: cant tell whether Bob or Charlie actually broadcasted, so blacklist both fidelity bonds. G1. Charlie: broadcast one or more of B htcl txes and use the hash preimage to get the money immediately. He already knows both privkeys of the multisig so this is pointless and just damages privacy and wastes miner fees. Alice: cant tell whether Bob or Charlie actually broadcasted, so blacklist both fidelity bonds. G2. Charlie: broadcast one or more of the A htlc txes. Alice: broadcast the remaining A htlc txes and use preimage to get her money immediately. Charlies's actions were pointless. Alice: blacklist Charlie's fidelity bond. The multisig outputs of the funding transactions can stay unspent indefinitely. However the parties must always be watching the network and ready to respond with their own sweep using a preimage. This is because the other party still possesses a fully-signed contract tx. The parties respond in the same way as in steps C-E1, F2 and G2. Alice's reaction of blacklisting both fidelity bonds might not be the right way, because one maker could use it to get another one blacklisted (as well as themselves). == Conclusion == This document describes the first version of the protocol which implements multi-transaction Coinswap, routed Coinswap, fidelity bonds, a liquidity market and private key handover. I describe the protocol and also analyze aborts of the protocols and deviations from the protocol.