Author: Troy Benjegerdes 2015-03-01 17:44:14
Published on: 2015-03-01T17:44:14+00:00
Bitcoin payment processors have been disrupted by the replace-by-fee/stag-hunt technology, which is a policy decision made by nodes. However, whether the term "scorched earth" applies depends on whether the stakeholders stand to gain or lose money from the disruption. The 'first-seen' policy could be dangerous since it only benefits internet router owners who determine what is seen first. It is best to let market participants choose whichever policy works best for them. Consensus-wise, if 'first-seen' is to work, a timestamp should be added to CTransaction. Scorched-earth policies could negatively affect present-day bitcoin payments that use insecure 0-conf transactions for rapid payments. To prevent this, decentralized solutions for instant payments are necessary. Adding replace-by-fee would make instant transactions even more centralized. Some people believe that non-standard policies, such as "first-seen," are an attack on Bitcoin and should not be implemented because they do not fit Bitcoin's original system. On the other hand, others believe that these policies will benefit Bitcoin. A modular policy code that supports several policies should be developed to allow users to choose their preferred policy. It is essential to have reversibility mechanisms built into the blockchain to deal with sudden failures where anonymous bad actors can make off with a fortune. However, most applications, in particular paying someone you already trust, are happy running on reversible systems. The problem is that if the base currency is assumed to be non-reversible, then it becomes too big to fail. Where the blockchain improves on everything else is in transparency. If transactions are reversed a lot, it will be obvious from an analysis. Overall, there is a need to balance between security and convenience when developing payment processing technologies. Reversibility mechanisms should be in place to protect against sudden failures, while decentralized solutions should be developed to enable instant payments.
Updated on: 2023-06-09T16:53:01.412068+00:00