From mboxrd@z Thu Jan 1 00:00:00 1970 Received: from sog-mx-2.v43.ch3.sourceforge.com ([172.29.43.192] helo=mx.sourceforge.net) by sfs-ml-2.v29.ch3.sourceforge.com with esmtp (Exim 4.76) (envelope-from ) id 1YPZDV-0007T2-KY for bitcoin-development@lists.sourceforge.net; Sun, 22 Feb 2015 16:17:13 +0000 Received-SPF: pass (sog-mx-2.v43.ch3.sourceforge.com: domain of gmail.com designates 209.85.212.174 as permitted sender) client-ip=209.85.212.174; envelope-from=natanael.l@gmail.com; helo=mail-wi0-f174.google.com; Received: from mail-wi0-f174.google.com ([209.85.212.174]) by sog-mx-2.v43.ch3.sourceforge.com with esmtps (TLSv1:RC4-SHA:128) (Exim 4.76) id 1YPZDT-0002Yi-MG for bitcoin-development@lists.sourceforge.net; Sun, 22 Feb 2015 16:17:13 +0000 Received: by mail-wi0-f174.google.com with SMTP id em10so12106231wid.1 for ; Sun, 22 Feb 2015 08:17:05 -0800 (PST) MIME-Version: 1.0 X-Received: by 10.180.76.178 with SMTP id l18mr12649506wiw.36.1424621825715; Sun, 22 Feb 2015 08:17:05 -0800 (PST) Received: by 10.194.28.170 with HTTP; Sun, 22 Feb 2015 08:17:05 -0800 (PST) Received: by 10.194.28.170 with HTTP; Sun, 22 Feb 2015 08:17:05 -0800 (PST) In-Reply-To: <54E9FD05.3000807@localhost.local> References: <20150222123428.GA6570@savin.petertodd.org> <2953246.T2DHreG0Tu@crushinator> <54E9FD05.3000807@localhost.local> Date: Sun, 22 Feb 2015 17:17:05 +0100 Message-ID: From: Natanael To: Justus Ranvier Content-Type: multipart/alternative; boundary=f46d04389387dc75b6050faf9d56 X-Spam-Score: -0.6 (/) X-Spam-Report: Spam Filtering performed by mx.sourceforge.net. See http://spamassassin.org/tag/ for more details. -1.5 SPF_CHECK_PASS SPF reports sender host as permitted sender for sender-domain 0.0 FREEMAIL_FROM Sender email is commonly abused enduser mail provider (natanael.l[at]gmail.com) -0.0 SPF_PASS SPF: sender matches SPF record 1.0 HTML_MESSAGE BODY: HTML included in message -0.1 DKIM_VALID_AU Message has a valid DKIM or DK signature from author's domain 0.1 DKIM_SIGNED Message has a DKIM or DK signature, not necessarily valid -0.1 DKIM_VALID Message has at least one valid DKIM or DK signature X-Headers-End: 1YPZDT-0002Yi-MG Cc: bitcoin-development@lists.sourceforge.net Subject: Re: [Bitcoin-development] alternate proposal opt-in miner takes double-spend (Re: replace-by-fee v0.10.0rc4) X-BeenThere: bitcoin-development@lists.sourceforge.net X-Mailman-Version: 2.1.9 Precedence: list List-Id: List-Unsubscribe: , List-Archive: List-Post: List-Help: List-Subscribe: , X-List-Received-Date: Sun, 22 Feb 2015 16:17:13 -0000 --f46d04389387dc75b6050faf9d56 Content-Type: text/plain; charset=UTF-8 Den 22 feb 2015 17:00 skrev "Justus Ranvier" : > > On 02/22/2015 07:50 AM, Matt Whitlock wrote: > > This happened to one of the merchants at the Bitcoin 2013 > > conference in San Jose. They sold some T-shirts and accepted > > zero-confirmation transactions. The transactions depended on other > > unconfirmed transactions, which never confirmed, so this merchant > > never got their money. > > > > I keep telling people not to accept transactions with zero > > confirmations, but no one listens. > > A better solution is to track the failure rate of zero confirmation > transactions, and adjust prices accordingly to cover the expected loss. > > This is what every merchant *already does* since no payment method has > a 0% fraud rate. > > Even physical cash has a probability of being counterfeit, and the > prices you pay for things at a convenience store already have that > risk priced in. > > The idea that zero confirmation transactions require a 100% guarantee > is a strawman, especially since there exists no number of > confirmations the actually produce a 100% irreversibility guarantee. The problem with this approach is that it is worthless as a predictor. We aren't dealing with traffic safety and road design - we are dealing with adaptive attackers and malicious miners and pools. Anything which does not invalidate blocks carrying doublespends WILL allow malicious miners and pools to conspire with thieves to steal money. The probability of being hit will then be (their proliferation in your business area) * (their fraction of the mining power). That might seem to give small numbers for most sets of reasonable assumptions. But the problem is that's only an average, and the people being hit might have small profit margins - one successful attack can place hundreds of merchants in red numbers and force them to shut down. You should never expose yourself to attacks which you can't defend against and which can be fatal. In particular not if there's nothing in the environment that is capable of limiting the size or numbers of any attacks. And there's no such thing today in Bitcoin. This is why I sketched out the multisignature notary approach, and why some decided to extend that approach with collateral (NoRiskWallet) to further reduce trust in the notary. This is the single most practical approach I know of today to achieve ACTUAL SECURITY for unconfirmed transactions. Don't like it? See if you can do better! Just don't rely on zero-confirmation transactions! --f46d04389387dc75b6050faf9d56 Content-Type: text/html; charset=UTF-8 Content-Transfer-Encoding: quoted-printable


Den 22 feb 2015 17:00 skrev "Justus Ranvier" <justusranvier@riseup.net>:
>
> On 02/22/2015 07:50 AM, Matt Whitlock wrote:
> > This happened to one of the merchants at the Bitcoin 2013
> > conference in San Jose. They sold some T-shirts and accepted
> > zero-confirmation transactions. The transactions depended on othe= r
> > unconfirmed transactions, which never confirmed, so this merchant=
> > never got their money.
> >
> > I keep telling people not to accept transactions with zero
> > confirmations, but no one listens.
>
> A better solution is to track the failure rate of zero confirmation > transactions, and adjust prices accordingly to cover the expected loss= .
>
> This is what every merchant *already does* since no payment method has=
> a 0% fraud rate.
>
> Even physical cash has a probability of being counterfeit, and the
> prices you pay for things at a convenience store already have that
> risk priced in.
>
> The idea that zero confirmation transactions require a 100% guarantee<= br> > is a strawman, especially since there exists no number of
> confirmations the actually produce a 100% irreversibility guarantee.

The problem with this approach is that it is worthless as a = predictor. We aren't dealing with traffic safety and road design - we a= re dealing with adaptive attackers and malicious miners and pools.

Anything which does not invalidate blocks carrying doublespe= nds WILL allow malicious miners and pools to conspire with thieves to steal= money. The probability of being hit will then be (their proliferation in y= our business area) * (their fraction of the mining power).

That might seem to give small numbers for most sets of reaso= nable assumptions. But the problem is that's only an average, and the p= eople being hit might have small profit margins - one successful attack can= place hundreds of merchants in red numbers and force them to shut down.

You should never expose yourself to attacks which you can= 9;t defend against and which can be fatal. In particular not if there's= nothing in the environment that is capable of limiting the size or numbers= of any attacks. And there's no such thing today in Bitcoin.

This is why I sketched out the multisignature notary approac= h, and why some decided to extend that approach with collateral (NoRiskWall= et) to further reduce trust in the notary. This is the single most practica= l approach I know of today to achieve ACTUAL SECURITY for unconfirmed trans= actions.

Don't like it? See if you can do better!

Just don't rely on zero-confirmation transactions!

--f46d04389387dc75b6050faf9d56--