[Bitcoin-development] [BIP draft] CHECKLOCKTIMEVERIFY - Prevent a txout from being spent until an expiration time

2014-10-01 Thread Peter Todd
I've written a reference implementation and BIP draft for a new opcode,
CHECKLOCKTIMEVERIFY. The BIP, reproduced below, can be found at:


https://github.com/petertodd/bips/blob/checklocktimeverify/bip-checklocktimeverify.mediawiki

The reference implementation, including a full-set of unittests for the
opcode semantics can be found at:

https://github.com/petertodd/bitcoin/compare/checklocktimeverify

pre
  BIP:
  Title: OP_CHECKLOCKTIMEVERIFY
  Author: Peter Todd p...@petertodd.org
  Status: Draft
  Type: Standards Track
  Created: 2014-10-01
/pre

==Abstract==

This BIP describes a new opcode (OP_CHECKLOCKTIMEVERIFY) for the Bitcoin
scripting system that allows a transaction output to be made unspendable until
some point in the future.


==Summary==

CHECKLOCKTIMEVERIFY re-defines the existing NOP2 opcode. When executed it
compares the top item on the stack to the nLockTime field of the transaction
containing the scriptSig. If that top stack item is greater than the transation
nLockTime the script fails immediately, otherwise script evaluation continues
as though a NOP was executed.

The nLockTime field in a transaction prevents the transaction from being mined
until either a certain block height, or block time, has been reached. By
comparing the argument to CHECKLOCKTIMEVERIFY against the nLockTime field, we
indirectly verify that the desired block height or block time has been reached;
until that block height or block time has been reached the transaction output
remains unspendable.


==Motivation==

The nLockTime field in transactions makes it possible to prove that a
transaction output can be spent in the future: a valid signature for a
transaction with the desired nLockTime can be constructed, proving that it is
possible to spend the output with that signature when the nLockTime is reached.
An example where this technique is used is in micro-payment channels, where the
nLockTime field proves that should the receiver vanish the sender is guaranteed
to get all their escrowed funds back when the nLockTime is reached.

However the nLockTime field is insufficient if you wish to prove that
transaction output ''can-not'' be spent until some time in the future, as there
is no way to prove that the secret keys corresponding to the pubkeys controling
the funds have not been used to create a valid signature.


===Escrow===

If Alice and Bob jointly operate a business they may want to
ensure that all funds are kept in 2-of-2 multisig transaction outputs that
require the co-operation of both parties to spend. However, they recognise that
in exceptional circumstances such as either party getting hit by a bus they
need a backup plan to retrieve the funds. So they appoint their lawyer, Lenny,
to act as a third-party.

With a standard 2-of-3 CHECKMULTISIG at any time Lenny could conspire with
either Alice or Bob to steal the funds illegitimately. Equally Lenny may prefer
not to have immediate access to the funds to discourage bad actors from
attempting to get the secret keys from him by force.

However with CHECKLOCKTIMEVERIFY the funds can be stored in scriptPubKeys of
the form:

IF
now + 3 months CHECKLOCKTIMEVERIFY DROP
Lenny's pubkey CHECKSIGVERIFY
1
ELSE
2
ENDIF
Alice's pubkey Bob's pubkey 2 CHECKMULTISIG

At any time the funds can be spent with the following scriptSig:

Alice's signature Bob's signature 0

After 3 months have passed Lenny and one of either Alice or Bob can spend the
funds with the following scriptSig:

Alice/Bob's signature Lenny's signature 1


===Non-interactive time-locked refunds===

There exist a number of protocols where a transaction output is created that
the co-operation of both parties to spend the output. To ensure the failure of
one party does not result in the funds becoming lost refund transactions are
setup in advance using nLockTime. These refund transactions need to be created
interactively, and additionaly, are currently vulnerable to transaction
mutability. CHECKLOCKTIMEVERIFY can be used in these protocols, replacing the
interactive setup with a non-interactive setup, and additionally, making
transaction mutability a non-issue.


Two-factor wallets

Services like GreenAddress store Bitcoins with 2-of-2 multisig scriptPubKey's
such that one keypair is controlled by the user, and the other keypair is
controlled by the service. To spend funds the user uses locally installed
wallet software that generates one of the required signatures, and then uses a
2nd-factor authentication method to authorize the service to create the second
SIGHASH_NONE signature that is locked until some time in the future and sends
the user that signature for storage. If the user needs to spend their funds and
the service is not available, they wait until the nLockTime expires.

The problem is there exist numerous occasions the user will not have a valid
signature for some or all of their transaction outputs. With

Re: [Bitcoin-development] [BIP draft] CHECKLOCKTIMEVERIFY - Prevent a txout from being spent until an expiration time

2014-10-01 Thread Gavin Andresen
Very nice, semantics are clear and use cases are compelling.

Can we defer discussion of how to roll this out for a little bit, and see
if there is consensus that:

a) benefits of having this outweigh risks
b) we're all happy with exact semantics

Then we can have a knock-down drag-out argument about whether it should
roll out as a soft fork, wait for a hard fork, be combined with some other
things that it would be nice to add or change, etc.

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Re: [Bitcoin-development] [BIP draft] CHECKLOCKTIMEVERIFY - Prevent a txout from being spent until an expiration time

2014-10-01 Thread Sergio Lerner
I like the proposal.

I suggest that applications and nodes should only broadcast transactions
having OP_CHECKLOCKTIMEVERIFY a few blocks after the timeout value.
If a node broadcasts a TX having OP_CHECKLOCKTIMEVERIFY and nLockTime is
equal to the current height and equal to the timeout value, but that
peer is one block behind in the blockchain, the transaction will be
rejected by the peer and the source will be banned.

Another option will be not to ban peers sending transactions failing to
verify OP_CHECKLOCKTIMEVERIFY , but I don't like this.

Still another option would be that the sender checks periodically the
height of it's peers (using the version command) in order to be sure to
send the transaction having OP_CHECKLOCKTIMEVERIFY only to the peers
that are up to date with the blockchain.

Regards,
 Sergio.




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Re: [Bitcoin-development] [BIP draft] CHECKLOCKTIMEVERIFY - Prevent a txout from being spent until an expiration time

2014-10-01 Thread Peter Todd
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Hash: SHA256

Yeah, there are lots of upper-level details to consider; I'm not going to 
pretend that BIP is complete yet. My thinking is that the first release should 
include my NOPx blacklist pull-req, and leave NOP2/CHECKLOCKTIMEVERIFY in that 
blacklist for another minor release or two.


On 1 October 2014 11:29:48 GMT-04:00, Sergio Lerner sergioler...@certimix.com 
wrote:
I like the proposal.

I suggest that applications and nodes should only broadcast
transactions
having OP_CHECKLOCKTIMEVERIFY a few blocks after the timeout value.
If a node broadcasts a TX having OP_CHECKLOCKTIMEVERIFY and nLockTime
is
equal to the current height and equal to the timeout value, but that
peer is one block behind in the blockchain, the transaction will be
rejected by the peer and the source will be banned.

Another option will be not to ban peers sending transactions failing to
verify OP_CHECKLOCKTIMEVERIFY , but I don't like this.

Still another option would be that the sender checks periodically the
height of it's peers (using the version command) in order to be sure to
send the transaction having OP_CHECKLOCKTIMEVERIFY only to the peers
that are up to date with the blockchain.

Regards,
 Sergio.




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Re: [Bitcoin-development] [BIP draft] CHECKLOCKTIMEVERIFY - Prevent a txout from being spent until an expiration time

2014-10-01 Thread Luke Dashjr
On Wednesday, October 01, 2014 1:08:26 PM Peter Todd wrote:
 I've written a reference implementation and BIP draft for a new opcode,
 CHECKLOCKTIMEVERIFY.

Thoughts on some way to have the stack item be incremented by the height at 
which the scriptPubKey was in a block? A limitation of encoding the target 
height/time directly, is that miners may choose not to mine the first 
transaction until they can also take the burn to fee. So, one may prefer to 
say cannot be spent until 100 blocks after the first transaction is mined, 
in effect reproducing the generation maturity rule.

I propose any stack item under 0x4 be incremented by the height at which 
the scriptPubKey was mined for comparison. Maybe there is a use case for doing 
something similar for time too?

Luke

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Re: [Bitcoin-development] [BIP draft] CHECKLOCKTIMEVERIFY - Prevent a txout from being spent until an expiration time

2014-10-01 Thread Gavin Andresen
On Wed, Oct 1, 2014 at 2:23 PM, Luke Dashjr l...@dashjr.org wrote:

 houghts on some way to have the stack item be incremented by the height at
 which the scriptPubKey was in a block? A limitation of encoding the target
 height/time directly, is that miners may choose not to mine the first
 transaction until they can also take the burn to fee.


If the first transaction is P2SH, then the miner won't know there is an
advantage to holding it until it is too late (the scriptPubKey is an opaque
hash until the second transaction is final and relayed/broadcast).


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Re: [Bitcoin-development] [BIP draft] CHECKLOCKTIMEVERIFY - Prevent a txout from being spent until an expiration time

2014-10-01 Thread Alan Reiner
On 10/01/2014 04:58 PM, Gavin Andresen wrote:
 If the first transaction is P2SH, then the miner won't know there is
 an advantage to holding it until it is too late (the scriptPubKey is
 an opaque hash until the second transaction is final and
 relayed/broadcast).

If you're doing some kind of proof-of-burn scheme, wouldn't using P2SH
defeat the purpose of it?

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Re: [Bitcoin-development] [BIP draft] CHECKLOCKTIMEVERIFY - Prevent a txout from being spent until an expiration time

2014-10-01 Thread Gavin Andresen
On Wed, Oct 1, 2014 at 5:04 PM, Alan Reiner etothe...@gmail.com wrote:

 On 10/01/2014 04:58 PM, Gavin Andresen wrote:
  If the first transaction is P2SH, then the miner won't know there is
  an advantage to holding it until it is too late (the scriptPubKey is
  an opaque hash until the second transaction is final and
  relayed/broadcast).

 If you're doing some kind of proof-of-burn scheme, wouldn't using P2SH
 defeat the purpose of it?


No, the burner would supply the funding transaction plus the redeeming
script as the proof-of-burn to whoever needed the proof.

Only after at least one confirmation, if there was some risk that revealing
the redeeming script would make miners refuse to mine that first
transaction because they want to get it plus the CHECKTIMELOCKVERIFY burn
transaction.

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Re: [Bitcoin-development] [BIP draft] CHECKLOCKTIMEVERIFY - Prevent a txout from being spent until an expiration time

2014-10-01 Thread Peter Todd
-BEGIN PGP SIGNED MESSAGE-
Hash: SHA256



On 1 October 2014 11:23:55 GMT-07:00, Luke Dashjr l...@dashjr.org wrote:
Thoughts on some way to have the stack item be incremented by the
height at
which the scriptPubKey was in a block?

Better to create a GET-TXIN-BLOCK-(TIME/HEIGHT)-EQUALVERIFY operator. 
scriptPubKey would be:

GET-TXIN-BLOCKHEIGHT-EQUALVERIFY

(fails unless top stack item is equal to the txin block height)

delta height ADD

(top stack item is now txin height + delta height)

CHECKLOCKTIMEVERIFY

 A limitation of encoding the
target
height/time directly, is that miners may choose not to mine the first
transaction until they can also take the burn to fee. So, one may
prefer to
say cannot be spent until 100 blocks after the first transaction is
mined,
in effect reproducing the generation maturity rule.

You'd want these sacrifices to unlock years into the future to thoroughly 
exceed any reasonable business cycle; that's so far into the future that miners 
are almost certain to just mine them and collect the fees.
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Re: [Bitcoin-development] [BIP draft] CHECKLOCKTIMEVERIFY - Prevent a txout from being spent until an expiration time

2014-10-01 Thread Peter Todd
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On 1 October 2014 14:34:33 GMT-07:00, Gavin Andresen gavinandre...@gmail.com 
wrote:
On Wed, Oct 1, 2014 at 5:04 PM, Alan Reiner etothe...@gmail.com
wrote:
No, the burner would supply the funding transaction plus the redeeming
script as the proof-of-burn to whoever needed the proof.

No, the redeemScript has to be provably published to miners for the sacrifice 
to be valid; if not you can exploit the scheme by hiding the redeemScript and 
having a big miner mine it at lower-than-face-value cost when it unlocks.

Only after at least one confirmation, if there was some risk that
revealing
the redeeming script would make miners refuse to mine that first
transaction because they want to get it plus the CHECK TIME BLOCK VERIFY
burn
transaction.

Yes, you could do that in a followup tx containing the redeemScript in an 
OP_RETURN output to prove publication. That said as I said to Luke-Jr, the 
sacrifices need to unlock pretty far into the future, so I don't see miners 
bothering to do this.





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Re: [Bitcoin-development] [BIP draft] CHECKLOCKTIMEVERIFY - Prevent a txout from being spent until an expiration time

2014-10-01 Thread Luke Dashjr
On Thursday, October 02, 2014 12:05:15 AM Peter Todd wrote:
 On 1 October 2014 11:23:55 GMT-07:00, Luke Dashjr l...@dashjr.org wrote:
 Thoughts on some way to have the stack item be incremented by the
 height at
 which the scriptPubKey was in a block?
 
 Better to create a GET-TXIN-BLOCK-(TIME/HEIGHT)-EQUALVERIFY operator.
 scriptPubKey would be:
 GET-TXIN-BLOCKHEIGHT-EQUALVERIFY
 (fails unless top stack item is equal to the txin block height)
 delta height ADD
 (top stack item is now txin height + delta height)
 CHECKLOCKTIMEVERIFY

This sounds do-able, although it doesn't address using timestamps.

  A limitation of encoding the target
 height/time directly, is that miners may choose not to mine the first
 transaction until they can also take the burn to fee. So, one may
 prefer to
 say cannot be spent until 100 blocks after the first transaction is
 mined,
 in effect reproducing the generation maturity rule.
 
 You'd want these sacrifices to unlock years into the future to thoroughly
 exceed any reasonable business cycle; that's so far into the future that
 miners are almost certain to just mine them and collect the fees.

For many use cases, short maturity periods are just as appropriate IMO.

Luke

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Re: [Bitcoin-development] [BIP draft] CHECKLOCKTIMEVERIFY - Prevent a txout from being spent until an expiration time

2014-10-01 Thread Peter Todd
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Hash: SHA256



On 1 October 2014 08:01:28 GMT-07:00, Gavin Andresen gavinandre...@gmail.com 
wrote:
Very nice, semantics are clear and use cases are compelling.

Thanks!

Can we defer discussion of how to roll this out for a little bit, and
see
if there is consensus that:

a) benefits of having this outweigh risks
b) we're all happy with exact semantics

Then we can have a knock-down drag-out argument about whether it should
roll out as a soft fork, wait for a hard fork, be combined with some
other
things that it would be nice to add or change, etc.

Agreed. People should keep in mind that leaving the deployment details as TBD 
was quite deliberate. There is some code in the repo to implement a softfork, 
but it's only meant to be illustrative.
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[Bitcoin-development] Decreasing block propagation time

2014-10-01 Thread Rebroad (sourceforge)
https://bitcointalk.org/index.php?topic=145066.0

The idea proposed in the above article seemed like an excellent idea. What
is holding this up from being implemented? Does someone need to code it, or
write a BIP first?
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Re: [Bitcoin-development] Decreasing block propagation time

2014-10-01 Thread Matt Corallo
It already is https://bitcointalk.org/index.php?topic=766190.0;all.
Well, ok, a variation on the idea is.

Matt

On 10/02/14 04:39, Rebroad (sourceforge) wrote:
 https://bitcointalk.org/index.php?topic=145066.0
 
 The idea proposed in the above article seemed like an excellent idea.
 What is holding this up from being implemented? Does someone need to
 code it, or write a BIP first?
 
 
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