Author: Jorge Timón 2014-04-24 10:48:54
Published on: 2014-04-24T10:48:54+00:00
A solution to the problem of 0 confirmation transactions has been proposed using game theory and most miners implementing replace-by-fee and child-pays-for-parent. The general idea is that when Alice wants to buy something cheaper than a car, say a smartphone for $200 in BTC, Bob asks her to pay him $400 in BTC. Alice signs a tx with 400 and no fee with her old phone and sends it to Bob rather than the network. Bob creates a child transaction keeping $200 and giving back $199.9 (0.1 USD fee) to Alice. However, Alice double-spends $399.8 to herself (0.2 fee), so Bob double-spends the child: $200 to Bob, $199 to Alice (1 USD fee). When Alice stubbornly spends $398 to herself (2 USD fee), Bob double-spends the child: $400 in fees. This is similar to the general game theory "stag hunt" case. The game has two Nash equilibria, but cooperation is Pareto efficient. Replace-by-fee and child-pays-for-parent cannot be prohibited by a protocol rule. Miners are expected to implement these policies eventually because it is more rational for them to prioritize transactions. Finally, this solution would make 0-confirmation transactions possible as described in this post.
Updated on: 2023-06-08T21:10:19.659501+00:00