Author: ZmnSCPxj 2017-12-06 04:49:12
Published on: 2017-12-06T04:49:12+00:00
The collective action problem in fraudulent withdrawals from a sidechain is discussed, with the difficulty of negotiating destination addresses being highlighted. A solution to this problem is suggested using a smart contract, where the thief pays out to a destination address that is a P2SH of a script called the Theft Contract. The thief then recruits accomplices who vote for the invalid withdrawal and accept an Accomplice Contract, which allows them to claim their "cut" of the theft by copying the preimage and claiming from the Accomplice Contract. If the theft never succeeds, the thief can recover their offered funds after the timeout on the Accomplice Contract, incentivizing accomplices to cooperate. Negotiation can be done in parallel with the theft attempt, reducing the cost of organizing collective action. This method requires significant funds in reserve prior to theft, but it is argued that miners already have a significant amount of money they control. The vulnerability can be fixed if withdrawals are restricted to simple P2PKH or P2WPKH only.
Updated on: 2023-06-12T22:29:41.882946+00:00