Good morning aj,

> On Mon, Oct 11, 2021 at 05:05:05PM +1100, Lloyd Fournier wrote:
>
> > ### Scorched earth punishment
> >
> > Another thing that I'd like to mention is that using revocable signatures
> > enables scorched earth punishments [2].
>
> I kind-of think it'd be more interesting to simulate eltoo's behaviour.
> If Alice's current state has balances (A, B) and P in in-flight
> payments, and Bob posts an earlier state with (A', B') and P' (so A+B+P
> = A'+B'+P'), then maybe Alice's justice transaction should pay:
>
> A+P + max(0, B'-B)*0.1 to Alice
> B-f - max(0, B'-B)*0.1 to Bob
>
> (where "f" is the justice transaction fees)
>
> Idea being that in an ideal world there wouldn't be a hole in your pocket
> that lets all your coins fall out, but in the event that there is such
> a hole, it's a nicer world if the people who find your coins give them
> back to you out of the kindness of their heart.

This may model closer to "two tits for a tat" strategy.

"Tit for tat" is optimum in iterated prisoner dilemma assuming mistakes never 
happen; however, in the real world we know quite well that we may injure 
another person by complete accident.
The usual practice in the real world is that the injured person will accept an 
apology *once*, but a repeat will tend to make people assume you are hostile 
and switch them over to tit for tat.
This overall strategy is then "two tits for a tat", you are (in practice) given 
one chance and then you are expected to be very careful in interacting with 
that person to keep being in their good graces.

So, if what you propose is widespread, then a theft attempt is costless: you 
can try using old state, and your victim will, on finding it, instead just use 
what they think is the latest state.
Thus, merely attempting the theft is costless (modulo onchain fees, which may 
be enough punishment in this case?).

However, if we assume that in practice a lot of "theft attempts" are really 
people not taking RAID systems and database replication seriously and getting 
punished by the trickster god Murphy, then your proposal would actually be 
better, and if theft is unlikely enough to succeed, then even a costless theft 
attempt would still be worthless (and onchain fees will bite you anyway).

Regards,
ZmnSCPxj
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