On Sat, 2008-11-15 at 12:43 +0800, Satoshi Nakamoto wrote:
> I'll try and hurry up and release the sourcecode as soon as possible
> to serve as a reference to help clear up all these implementation
> Ray Dillinger (Bear) wrote:
> > When a coin is spent, the buyer and seller digitally sign a (blinded)
> > transaction record.
> Only the buyer signs, and there's no blinding.
> > If someone double spends, then the transaction record
> > can be unblinded revealing the identity of the cheater.
> Identities are not used, and there's no reliance on recourse. It's all
Okay, that's surprising. If you're not using buyer/seller
identities, then you are not checking that a spend is being made
by someone who actually is the owner of (on record as having
recieved) the coin being spent.
There are three categories of identity that are useful to
think about. Category one: public. Real-world identities
are a matter of record and attached to every transaction.
Category two: Pseudonymous. There are persistent "identities"
within the system and people can see if something was done by
the same nym that did something else, but there's not necessarily
any way of linking the nyms with real-world identities. Category
three: unlinkably anonymous. There is no concept of identity,
persistent or otherwise. No one can say or prove whether the
agents involved in any transaction are the same agents as involved
in any other transaction.
Are you claiming category 3 as you seem to be, or category 2?
Lots of people don't distinguish between anonymous and
pseudonymous protocols, so it's worth asking exactly what
you mean here.
Anyway: I'll proceed on the assumption that you meant very
nearly (as nearly as I can imagine, anyway) what you said,
unlinkably anonymous. That means that instead of an "identity",
a spender has to demonstrate knowledge of a secret known only
to the real owner of the coin. One way to do this would be
to have the person recieving the coin generate an asymmetric
key pair, and then have half of it published with the
transaction. In order to spend the coin later, s/he must
demonstrate posession of the other half of the asymmetric
key pair, probably by using it to sign the key provided by
the new seller. So we cannot prove anything about "identity",
but we can prove that the spender of the coin is someone who
knows a secret that the person who recieved the coin knows.
And what you say next seems to confirm this:
> No challenges or secret shares. A basic transaction is just
> what you see in the figure in section 2. A signature (of the
> buyer) satisfying the public key of the previous transaction,
> and a new public key (of the seller) that must be satisfied to
> spend it the next time.
Note, even though this doesn't involve identity per se, it still
makes the agent doing the spend linkable to the agent who
earlier recieved the coin, so these transactions are linkable.
In order to counteract this, the owner of the coin needs to
make a transaction, indistinguishable to others from any
normal transaction, in which he creates a new key pair and
transfers the coin to its posessor (ie, has one sock puppet
"spend" it to another). No change in real-world identity of
the owner, but the transaction "linkable" to the agent who spent
the coin is unlinked. For category-three unlinkability, this
has to be done a random number of times - maybe one to six
BTW, could you please learn to use carriage returns?? Your
lines are scrolling stupidly off to the right and I have to
scroll to see what the heck you're saying, then edit to add
carriage returns before I respond.
> > If it contains a double spend, then they create a "transaction"
> > which is a proof of double spending, add it to their pool A,
> > broadcast it, and continue work.
> There's no need for reporting of "proof of double spending" like
> that. If the same chain contains both spends, then the block is
> invalid and rejected.
> Same if a block didn't have enough proof-of-work. That block is
> invalid and rejected. There's no need to circulate a report
> about it. Every node could see that and reject it before relaying it.
Mmmm. I don't know if I'm comfortable with that. You're saying
there's no effort to identify and exclude nodes that don't
cooperate? I suspect this will lead to trouble and possible DOS
> If there are two competing chains, each containing a different
> version of the same transaction, with one trying to give money
> to one person and the other trying to give the same money to
> someone else, resolving which of the spends is valid is what
> the whole proof-of-work chain is about.
Okay, when you say "same" transaction, and you're talking about
transactions that are obviously different, you mean a double
spend, right? Two transactions signed with the same key?
> We're not "on the lookout" for double spends to sound the alarm
> and catch the cheater. We merely adjudicate which one of the
> spends is valid. Receivers of transactions must wait a few
> blocks to make sure that resolution has had time to complete.
Until.... until what? How does anybody know when a transaction
has become irrevocable? Is "a few" blocks three? Thirty? A
hundred? Does it depend on the number of nodes? Is it logarithmic
or linear in number of nodes?
> Would be cheaters can try and simultaneously double-spend all
> they want, and all they accomplish is that within a few blocks,
> one of the spends becomes valid and the others become invalid.
But in the absence of identity, there's no downside to them
if spends become invalid, if they've already recieved the
goods they double-spent for (access to website, download,
whatever). The merchants are left holding the bag with
"invalid" coins, unless they wait that magical "few blocks"
(and how can they know how many?) before treating the spender
as having paid.
The consumers won't do this if they spend their coin and it takes
an hour to clear before they can do what they spent their coin on.
The merchants won't do it if there's no way to charge back a
customer when they find the that their coin is invalid because
the customer has doublespent.
> Even if an earlier spend wasn't in the chain yet, if it was
> already in all the nodes' pools, then the second spend would
> be turned away by all those nodes that already have the first
So there's a possibility of an early catch when the broadcasts of
the initial simultaneous spends interfere with each other. I assume
here that the broadcasts are done by the sellers, since the buyer
has a possible disincentive to broadly disseminate spends.
> > If the new chain is accepted, then they give up on adding their
> > current link ... and start work again trying to extend the new
> > chain.
> Right. They also refresh whenever a new transaction comes in,
> so L pretty much contains everything in A all the time.
Okay, that's a big difference between a proof of work that takes
a huge set number of CPU cycles and a proof of work that takes a
tiny number of CPU cycles but has a tiny chance of success. You
can change the data set while working, and it doesn't mean you
need to start over. This is good in this case, as it means nobody
has to hold recently recieved transactions out of the link they're
> > Is there a mechanism to make sure that the "chain" does not consist
> > solely of links added by just the 3 or 4 fastest nodes?
> If you're thinking of it as a CPU-intensive digital signing, then
> you may be thinking of a race to finish a long operation first and
> the fastest always winning.
Right. That was the misconception I was working with. Again, the
difference between a proof taking a huge set number of CPU cycles
and a proof that takes a tiny number of CPU cycles but has a tiny
chance of success.
> Anyone's chance of finding a solution at any
> time is proportional to their CPU power.
It's like a random variation in the work factor; in this way it works
in your favor.
> There will be transaction fees, so nodes will have an incentive
> to receive and include all the transactions they can. Nodes
> will eventually be compensated by transaction fees alone when
> the total coins created hits the pre-determined ceiling.
I don't understand how "transaction fees" would work, and how the money
would find its way from the agents doing transactions to those running
the network. But the economic effect is the same (albeit somewhat
randomized) if adding a link to the chain allows the node to create
a coin, so I would stick with that.
Also, be aware that the compute power of different nodes can be
expected to vary by two orders of magnitude at any given moment in
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