Author: Adam Back 2013-05-13 21:12:44
Published on: 2013-05-13T21:12:44+00:00
The context discusses the differences between Peter's proof-of-sacrifice and conventional methods of destroying Bitcoin. Proof-of-sacrifice is similar to hashcash, except with time-stamped difficulty coordinated inflation control. The system is offline, so it doesn't require a blockchain double spend protection. Values are too low to spam the blockchain, so they can be mined on the spot and made payable to the identity of the recipient. A private key can be given, but this creates double-spending issues again. One possible solution presented was "amortizable hashcash under-contribution," which could allow the recipient to uncover the actual value of the coin if merge-mined. Another idea was for a pool to lock the reward instead of receiving or destroying it, using a merkle root instead of a public key hash in the reward recipient address field in the coinbase. A way to create an anonymous identity was also discussed, where creation cost of a SIN was associated with a miner fee. This allows anyone worldwide to create a SIN by following a published protocol for burning a specified amount of bitcoins via miner fee. It can be cryptographically proven who made such a transaction, and the miner fee attaches a creation cost to ensure that SINs are not too cheap. Burn-via-miner-fee is a useful tool outside of this example as it funds a public service, providing a positive feedback loop for miners who receive fees via such services.
Updated on: 2023-06-06T16:44:39.759229+00:00