Author: Peter Todd 2014-02-09 18:04:58
Published on: 2014-02-09T18:04:58+00:00
Alex Mizrahi has developed a p2p 2-step-trade mechanism that enables the secure transfer of colored coins and embedded consensus system assets to another party for Bitcoins atomically. The mechanism works by allowing Alice, who controls a colored txout, to sign a scriptSig using SIGHASH_SINGLE|ANYONECANPAY for a transaction with a single input, the colored txout, and a single output with a scriptPubKey she controls and nValue=1. She gives this partial transaction to Bob who can complete it by providing one or more inputs with a sum value >=1BTC and one output for the colored coins to be directed to. Bob signs his inputs with SIGHASH_ALL and broadcasts the transaction, completing the trade. This makes the trade trust free and atomic. The 2-step-trade mechanism can also be extended to create a decentralized marketplace, where Proof-of-publication offers a solution by allowing Alice to embed her incomplete transaction as data in a second, valid, transaction. Bidders such as Bob can now scan the blockchain for offers with an acceptable price, and unfilled offers at any given block height are honest information about the market historically. Any embedded consensus system can make use of the 2-step-trade mechanism so long as it is possible to create transactions where spending a single transaction output moves an asset appropriately. However, extending this to circumstances where more than one input needs to be spent or more than out output needs to be created is difficult. An alternative could be to create a mechanism where some embedded data signified the creation of a temporary transfer txout, where spending that txout made the underlying change desired in the consensus state atomically.
Updated on: 2023-06-08T02:30:20.462659+00:00