Author: Johnson Lau 2019-05-24 08:15:45
Published on: 2019-05-24T08:15:45+00:00
Tamas Blummer has proposed a new method for Bitcoin to hedge risks on difficulty change. He believes that a better solution could be a transaction that uses nLocktime denominated in block height, such that it is valid after the difficulty adjusted block in the future. The proposal includes a new OP_DIFFICULTY opcode that would put onto stack the value of difficulty for the block the transaction is included into. The output script may then decide comparing that value with a strike which key can spend it. The input of the transaction would be a multi-sig escrow of those who entered the bet. The winner would broadcast. Blummer plans to draft a BIP for this as he thinks this opcode would serve significant economic interest of Bitcoin economy and is compatible with Bitcoin’s aim not to introduce a third party to do so. He invites others to contribute or point out any fault in the proposal. A gamble like this, decentralised or not, is easy to manipulate since difficulty is determined entirely by the last block in a cycle. Commodity markets offer futures and options to hedge risks on traditional trading venues, but some might soon list difficulty futures. This proposal aims to provide a native solution within Bitcoin that does not carry any counterparty risk and does not need an oracle to settle according to the bet.
Updated on: 2023-05-20T20:31:54.179686+00:00