Author: Matthew Roberts 2016-08-04 04:53:18
Published on: 2016-08-04T04:53:18+00:00
The recent hack on Bitfinex has led to discussions about the creation of a new address type that has a reversal key and settlement layer in order to prevent future hacks. However, Luke Dashjr argues that this is not necessary as it is already possible to nLockTime withdrawals for some future block and avoid signing any transaction that isn't nLockTime'd at least N blocks beyond the present tip. The problem with nLockTimed transactions is that centralized exchanges won't know ahead of time where those locked transactions need to go or the amount that needs to be signed, thus requiring the private key to be kept around. TierNolan's idea of creating a new type of output script that forces the redeemer to use a designated output script template in the redeeming transaction is considered by many to be the best solution. This way, people can be forced to send coins into another transaction with "relative lock-timed" outputs, which can only be redeemed at the destination after the relative lock-time expires OR moved beforehand to a designated off-line recovery address. A third distinct key required for the refund TXN that's separate from the keys used to sign the initial nLockTime TXN would also be needed and the refund TXN would need to be able to go to a new address entirely if the keys are compromised.
Updated on: 2023-06-11T19:17:35.865800+00:00