Author: Natanael 2015-02-12 13:02:20
Published on: 2015-02-12T13:02:20+00:00
On February 12th, 2015, Mike Hearn inquired about the absence of collateralized multisignature notaries in a discussion. This model is an extension of the Greenaddress.it model and makes unconfirmed transactions useless in the classical Bitcoin model. However, introducing a trusted third party would lead to centralized trust, which comes with its own set of disadvantages. The standard multisignature notary model functions as previously outlined in a blog post over a year before. A doublespend can be proven instantly by displaying two conflicting transactions signed by that party, and after confirmation in the blockchain, standard Bitcoin transaction security is established. To profit from collusion or performing doublespends, the notary would have to ensure a better payout than acting honestly for a given future amount of time. Thus, transactions for small sums are secure. To provide security for high-value transactions, NRW adds a collateral transaction that the notary signs in advance and gives to the seller. If the original payment is doublespent, this collateral transaction becomes spendable, leading to two possible outcomes: either the customer or the notary pays the seller. The customer cannot force a doublespend, and the notary cannot steal or freeze funds due to the nlocktime fund recovery option. Ultimately, the seller receives the funds for sure before delivering the goods, and no one is at risk.
Updated on: 2023-06-09T16:49:46.903007+00:00