Author: s7r 2021-08-09 00:03:31
Published on: 2021-08-09T00:03:31+00:00
The post discusses a protocol named Sabu that allows for the issuance of IOUs on the Bitcoin blockchain. An example transaction is given, where Bob buys 12,000 Satoshis from Alice in exchange for $5 cash, and Alice prepares a main transaction that represents her liability to Bob. Alongside this transaction, Alice creates a guarantee transaction which cuts a portion of Bob and Alice's money in favor of transaction fees. The guarantee transaction applies when the issuer doesn't live up to its promise, and it sends fraudulent transactions to the Bitcoin network. If this happens, Bob's wallet realizes that the issuer is spending the promised UTXOs and sends the guarantee transaction(s) to the network as a last resort. Poor Bob cannot recoup all his Satoshis, but he can retrieve a portion of his money and forces Alice to lose some of her money as well. However, the possibility for just one party to sign will not work, as explained by ZmnSCPxj. A simple attack is described where Alice creates a "Sabu-killing-transaction" that invalidates the guarantee transaction, leaving Bob with no recourse. The chances of Alice defrauding Bob are seen as very high in this scenario. Additionally, the creditor (Bob) has to leave his wallet running 24x7 and ensure he is connected to the internet; otherwise, if he loses connection to the internet or energy supply, Alice's attack will succeed entirely with 100% chances. There are also questions about how Bob spends the coins received and becomes an issuer himself in relation to another creditor, and what happens if Alice tries to fraud Bob after Bob spent its Sabu credit to Dave.
Updated on: 2023-06-14T22:44:34.573674+00:00