Author: Tamas Blummer 2019-05-23 17:42:35
Published on: 2019-05-23T17:42:35+00:00
The difficulty change in Bitcoin mining has a significant impact on miners' production and poses the biggest risk when considering investment. Commodity markets offer futures and options to hedge the risks, but there might be a better solution natively within Bitcoin. One proposal is to use a transaction that uses nLocktime denominated in block height, which is valid after the difficulty adjusted block in the future.A new OP_DIFFICULTY opcode would put onto the stack the value of difficulty for the block the transaction is included in. The output script could then compare that value with a strike which key can spend it, and the input would be a multi-sig escrow of those who entered the bet. The winner would broadcast, and once signed by both parties, the transaction would not carry any counterparty risk and would not need an oracle to settle according to the bet.The proposal aims to draft a BIP for this opcode, which would serve the significant economic interest of the Bitcoin economy and is compatible with Bitcoin's aim not to introduce a third party. Tamas Blummer invites feedback and contributions to the proposal.
Updated on: 2023-06-13T19:05:23.455501+00:00