Author: Benjamin 2015-07-30 08:17:55
Published on: 2015-07-30T08:17:55+00:00
The conversation between two individuals is focused on a payment route and several issues related to it. One of the major issues discussed is how Alice knows Bob and Carol, as Bitcoin requires an out-of-band key exchange but there is no ID attached to the keys. The concept of a hub seems to imply the use of standard PKI or Web-of-trust, both of which have big problems when it comes to large, frequent financial transactions. Another issue raised is why Bob should even participate in this transaction, as incentives are not described. Incentives are a fundamental part of Bitcoin and make network-based intermediation possible. From the point of view of a node, Bitcoin does not have a scalability issue, and the only concern of the node is to maximize knowable profit.The discussion then delves into a specific payment route scenario where Alice wants to pay Carol some amount. Carol gives Alice H(R), and Alice updates her commitment tx with Bob, including the HTLC output. Bob does the same with Carol. At this point, Carol withholds R, forcing Bob to broadcast the commitment tx between Bob and Carol. Now, Carol can spend the HTLC output because she knows R, revealing it to the world. Alice now also refuses to update the commitment tx with Bob, forcing Bob to broadcast that commitment tx, putting a delay on Bob's ability to spend the HTLC output (as well as all other outputs to him). However, Alice can spend the HTLC output if the CLTV has expired.In most examples seen, the CLTV is 2 days between Alice and Bob and 1 day between Bob and Carol, and all CSV delays are 3 days. The minimum CSV allowed controls the worst-case HTLC that can be accepted. CSV of a few hours should be okay if one is online all the time. It is suggested that stats be done on this. Cheers!
Updated on: 2023-05-23T18:54:04.286807+00:00