Author: ZmnSCPxj 2020-04-04 12:07:28
Published on: 2020-04-04T12:07:28+00:00
The Statechains concept, a non-custodial off-chain Bitcoin transfer system, is being implemented with some modifications. The original implementation involved a 2-of-2 multisig output paying to the Statechain Entity (SE) key and transitory key. Instead, the proposed modification replaces it with a single Pay-to-Witness-Public-Key-Hash (P2WPKH) output where the public key is shared between the SE and the current owner. They can sign with a 2-of-2 Elliptic Curve Digital Signature Algorithm (ECDSA) Multiparty Computation (MPC). However, there are concerns that the SE can scam its users through an untraceable attack by transferring ownership of the UTXO off-chain. To mitigate this attack, a new user key needs to be added to the protocol with which they must sign in order for the transfer to be considered valid on the state chain. This way, if the SE wishes to steal the funds, it will be traceable/provable that this SE is not trustworthy as there is no evidence of a valid transfer for the stolen funds. Additionally, practical deployments of state chains require the state chain operator to be a trusted federation, possibly a k-of-n, which has the same "auditability" as a federation sidechain. A k-of-n federation can only be trusted if one has full trust in at least (n-k+1) members of the federation. Tom Trevethan is leading the implementation of the Statechains concept. He clarified his affiliation with nChain and the patent assigned to them for "Secure off-chain blockchain transactions". While he was working there two years ago, he had free reign to work on any ideas, including side chains, pegs, and threshold signatures. His patent application came out of an idea he had to transfer ownership of UTXOs off-chain, which has some similarities to the Statechains proposal. However, the patent application has not been granted, and the international search report rejected it on the grounds of prior art. Trevethan is happy to receive feedback or pull requests on the detailed protocol specification available on Github.
Updated on: 2023-06-14T00:21:17.477046+00:00