Author: AdamISZ 2022-01-29 17:16:29
Published on: 2022-01-29T17:16:29+00:00
The discussion among Bitcoin enthusiasts about using 'mutually assured destruction' approaches for contract enforcement has been ongoing for a decade. However, the idea of punishment-by-burn to unspendable output is still considered extremely unstable as the penalty transaction destroys all the money, and there is no incentive for the honest party to punish. Even a small donation from the attacker to the victim can prevent the penalty from happening. The Sabu protocol had promising constructs, but a critical vulnerability that could be exploited by miners. In contrast, PathCoin uses penalties as disincentives, but the penalty consists of a payment directly from the attacker to the attacked, which is larger than the amount stolen and is stable. PathCoin aims to create a fully trustless transfer of control of a UTXO from one party to another with no interaction with the rest of the group, at the time of transfer. It uses signature adaptors and CTV or a similar covenant, but the limitations are extreme, and there is no claim that this idea is even viable yet, let alone better than other ideas like statechains or payment pools. However, imaginative minds may be able to develop it further. In situations where there are multiple choices in path, the punishment needs to be able to handle the multiple of the number of paths. A method of coordination between payees is required so that a payee who has been double-spent on becomes aware they've been double-spent on and initiates the punishment. However, once there is a coordination mechanism, it starts looking more like an on-chain transaction.
Updated on: 2023-06-15T15:28:01.903278+00:00