Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-20 Thread Ivan Brightly
Yep - similarly: you live in a neighborhood with a local coffee store. Sure
you could use a stolen credit card or a fake $5 bill, but it's not worth
the risk of being caught for a $3 coffee. And on the other side, the store
can deal with 1% of transactions getting reversed or having a fake bill so
they don't change their procedures.

Perfection is not necessary in all situations.

On Sat, Jun 20, 2015 at 12:02 AM, Eric Lombrozo elombr...@gmail.com wrote:


  On Jun 19, 2015, at 8:48 PM, Luke Dashjr l...@dashjr.org wrote:
 
  On Saturday, June 20, 2015 1:23:03 AM Aaron Voisine wrote:
  They don't need to be made cryptographically safe, they just have to be
  safer than, for instance, credit card payments that can be charged
 back. As
  long as it's reasonably good in practice, that's fine.
 
  They never will be. You can get a decent rate of success merely by
 making one
  transaction propagate fast (eg, 1 input, 1 output) and the other slow
 (eg,
  1000 inputs, 1000 outputs) and choosing your peers carefully. The only
 reason
  unconfirmed transactions aren't double spent today is because nobody is
  seriously *trying*.
 
  Luke
 


 Newspapers are often sold in vending machines that make it possible for
 anyone to just pay the price of one and take them all…and most of the time
 they are not that carefully monitored. Why? Because most people have better
 things to do than try to steal a few newspapers. They probably were much
 more closely monitored earlier in their history…but once it became clear
 that despite the obvious attack vector very few people actually try to game
 it, vendors figured it wasn’t really that big a risk. Same thing applies to
 people trying to steal a piece of bubble gum at the cash register at a
 convenience store by double-spending.

 - Eric Lombrozo

 
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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-20 Thread Eric Lombrozo

 On Jun 20, 2015, at 4:37 PM, justusranv...@riseup.net wrote:
 
 Signed PGP part
 On 2015-06-20 18:20, Jorge Timón wrote:
  On Fri, Jun 19, 2015 at 6:42 PM, Eric Lombrozo elombr...@gmail.com
  wrote:
  If we want a non-repudiation mechanism in the protocol, we should
  explicitly define one rather than relying on “prima facie”
  assumptions. Otherwise, I would recommend not relying on the existence
  of a signed transaction as proof of intent to pay…
 
  Non-repudiation can be built on top of the payment protocol layer.
 
 
 Non-repudiation is an intrinsic property of the ECDSA signatures which
 Bitcoin uses - it's not a feature that needs to be built.
 
 There's no way to accidentally sign a transaction and accidentally
 announce it publicly. There is no form of third-party error that can
 result in a payee receiving an erroneous contract.
 
 

Justus,

We don’t even have a concept of identity in the Bitcoin protocol, let alone 
non-repudiation. What good is non-repudiation if there’s no way to even 
associate a signature with a legal entity?

Sure, we could use the ECDSA signatures in transactions as part of a 
non-repudiation scheme - but the recipient would have to also have a means to 
establish the identity of the sender and associate it with the the transaction.


Furthermore, in light of the fact that there *are* fully legitimate use cases 
for sending conflicting transactions…and the fact that determination of intent 
isn’t always entirely clear…we should refrain from attaching any further 
significance transaction signatures other than that “the sender was willing to 
have it included in the blockchain if a miner were to have seen it and accepted 
it…but perhaps the sender would have changed their mind before it actually did 
get accepted.”

- Eric Lombrozo


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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-20 Thread Eric Lombrozo

 On Jun 20, 2015, at 5:27 PM, justusranv...@riseup.net wrote:
 
 Signed PGP part
 On 2015-06-20 19:19, Eric Lombrozo wrote:
  On Jun 20, 2015, at 4:37 PM, justusranv...@riseup.net wrote:
 
  Signed PGP part
  On 2015-06-20 18:20, Jorge Timón wrote:
   On Fri, Jun 19, 2015 at 6:42 PM, Eric Lombrozo elombr...@gmail.com
   wrote:
   If we want a non-repudiation mechanism in the protocol, we should
   explicitly define one rather than relying on “prima facie”
   assumptions. Otherwise, I would recommend not relying on the existence
   of a signed transaction as proof of intent to pay…
  
   Non-repudiation can be built on top of the payment protocol layer.
 
 
  Non-repudiation is an intrinsic property of the ECDSA signatures which
  Bitcoin uses - it's not a feature that needs to be built.
 
  There's no way to accidentally sign a transaction and accidentally
  announce it publicly. There is no form of third-party error that can
  result in a payee receiving an erroneous contract.
 
 
 
  Justus,
 
  We don’t even have a concept of identity in the Bitcoin protocol, let
  alone non-repudiation. What good is non-repudiation if there’s no way
  to even associate a signature with a legal entity?
 
  Sure, we could use the ECDSA signatures in transactions as part of a
  non-repudiation scheme - but the recipient would have to also have a
  means to establish the identity of the sender and associate it with
  the the transaction.
 
 
  Furthermore, in light of the fact that there *are* fully legitimate
  use cases for sending conflicting transactions…and the fact that
  determination of intent isn’t always entirely clear…we should refrain
  from attaching any further significance transaction signatures other
  than that “the sender was willing to have it included in the
  blockchain if a miner were to have seen it and accepted it…but perhaps
  the sender would have changed their mind before it actually did get
  accepted.”
 
 Bitcoin has no concept of identity, but in any type of commercial
 transaction the parties involved must know some minimal amount of
 identity information in order to transact at all.
 
 Except for some identifiable special cases, I think a payee is perfectly
 justified in treating a double spend of a payment sent to them as part
 of a commercial transaction as a fraud attempt and employing whatever
 non-Bitcoin recourse mechanisms, if any, they have access to.
 
 From the perspective of the network, the obviously correct action for
 any node or miner is to relay the first version of any transaction they
 see. The primary purpose of mining is to resolve this
 otherwise-unresolvable problem of determining which transaction among a
 set of conflicting transactions happened first.
 
 If a node or miner wants to deviate from the obviously correct
 behaviour, and if they want to avoid harming the value of the network,
 they should be particularly careful to make sure their deviation from
 first seen doesn't introduce harmful unintended side effects, like
 making fraud easier.
 

The contract between the buyer and seller is actually outside the Bitcoin 
network. Yes, a merchant that gets cheated could seek some other recourse in 
such an event…but the behavior you’re claiming as “obviously correct” is NOT 
obviously correct.  In fact, there are arguments against this “obviously 
correct” way even if we were to accept the premise that the signature implies a 
promise to pay (which I think many reasonable individuals would also dispute). 
For instance, by relaying conflicting transactions it makes it potentially 
easier for others to discover the double-spend attempt (of course, this 
requires wallets to not be lazy about this…perhaps such relays could be flagged 
or placed in a special message type).

- Eric Lombrozo





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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-20 Thread justusranvier
-BEGIN PGP SIGNED MESSAGE-
Hash: SHA1

On 2015-06-20 19:19, Eric Lombrozo wrote:
 On Jun 20, 2015, at 4:37 PM, justusranv...@riseup.net wrote:
 
 Signed PGP part
 On 2015-06-20 18:20, Jorge Timón wrote:
  On Fri, Jun 19, 2015 at 6:42 PM, Eric Lombrozo elombr...@gmail.com
  wrote:
  If we want a non-repudiation mechanism in the protocol, we should
  explicitly define one rather than relying on “prima facie”
  assumptions. Otherwise, I would recommend not relying on the existence
  of a signed transaction as proof of intent to pay…
 
  Non-repudiation can be built on top of the payment protocol layer.
 
 
 Non-repudiation is an intrinsic property of the ECDSA signatures which
 Bitcoin uses - it's not a feature that needs to be built.
 
 There's no way to accidentally sign a transaction and accidentally
 announce it publicly. There is no form of third-party error that can
 result in a payee receiving an erroneous contract.
 
 
 
 Justus,
 
 We don’t even have a concept of identity in the Bitcoin protocol, let
 alone non-repudiation. What good is non-repudiation if there’s no way
 to even associate a signature with a legal entity?
 
 Sure, we could use the ECDSA signatures in transactions as part of a
 non-repudiation scheme - but the recipient would have to also have a
 means to establish the identity of the sender and associate it with
 the the transaction.
 
 
 Furthermore, in light of the fact that there *are* fully legitimate
 use cases for sending conflicting transactions…and the fact that
 determination of intent isn’t always entirely clear…we should refrain
 from attaching any further significance transaction signatures other
 than that “the sender was willing to have it included in the
 blockchain if a miner were to have seen it and accepted it…but perhaps
 the sender would have changed their mind before it actually did get
 accepted.”

Bitcoin has no concept of identity, but in any type of commercial 
transaction the parties involved must know some minimal amount of 
identity information in order to transact at all.

Except for some identifiable special cases, I think a payee is perfectly 
justified in treating a double spend of a payment sent to them as part 
of a commercial transaction as a fraud attempt and employing whatever 
non-Bitcoin recourse mechanisms, if any, they have access to.

- From the perspective of the network, the obviously correct action for 
any node or miner is to relay the first version of any transaction they 
see. The primary purpose of mining is to resolve this 
otherwise-unresolvable problem of determining which transaction among a 
set of conflicting transactions happened first.

If a node or miner wants to deviate from the obviously correct 
behaviour, and if they want to avoid harming the value of the network, 
they should be particularly careful to make sure their deviation from 
first seen doesn't introduce harmful unintended side effects, like 
making fraud easier.

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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-20 Thread Eric Lombrozo

 On Jun 20, 2015, at 4:47 PM, Eric Lombrozo elombr...@gmail.com wrote:
 
 
 On Jun 20, 2015, at 4:16 PM, Jorge Timón jti...@jtimon.cc wrote:
 
 On Fri, Jun 19, 2015 at 5:37 PM, Eric Lombrozo elombr...@gmail.com wrote:
 The Bitcoin network was designed (or should be designed) with the 
 requirement that it can withstand deliberate double-spend attacks that can 
 come from anywhere at any time…
 
 I disagree with this premise. Please, don't take this as an argument
 from authority fallacy, but I will cite Satoshi to express what I
 think the assumptions while using the system should be:
 
 As long as a majority of CPU power is controlled by nodes that are
 not cooperating to attack the network, they'll generate the longest
 chain and outpace attackers.
 
 I can't say for sure what was meant by attacking the network in this
 context but I personally mean trying to rewrite valid and
 proof-of-work-timestamped history.
 Unconfirmed transactions are simply not part of history yet. Ordering
 unconfirmed transactions in a consensus compatible way without a
 universal clock is impossible, that's why we're using proof of work in
 the first place.
 
 Alternative policies are NOT attacks on the network.
 
 Just to be clear, Jorge, I wasn’t suggesting that unconfirmed transactions 
 are part of any sort of global consensus. In fact, they very much AREN’T. 
 Which is exactly why it is extremely dangerous to accept unconfirmed 
 transactions as final unless you clearly have assessed the risks and it makes 
 sense for the particular business use case.
 
 - Eric Lombrozo

I think the misunderstanding was in perhaps my earlier statement seemed like I 
was suggesting that it’s the protocol’s responsibility to protect merchants 
from double-spends. On the contrary - I think we agree - the protocol CANNOT 
make any guarantees to ANYONE until we do converge on a history. The “design” I 
speak of here is more on the merchant side.

- Eric Lombrozo


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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Frank Flores
Has anyone from Mycelium weighed in on this? Is their doublespend attack
detection broken with this kind of irresponsible behavior?

On Fri, Jun 19, 2015 at 3:39 PM, Matt Whitlock b...@mattwhitlock.name
wrote:

 On Friday, 19 June 2015, at 9:18 am, Adrian Macneil wrote:
  If full-RBF sees any significant adoption by miners, then it will
 actively
  harm bitcoin adoption by reducing or removing the ability for online or
 POS
  merchants to accept bitcoin payments at all.

 Retail POS merchants probably should not be accepting vanilla Bitcoin
 payments, as Bitcoin alone does not (and cannot) guarantee the
 irreversibility of a transaction until it has been buried several blocks
 deep in the chain. Retail merchants should be requiring a co-signature from
 a mutually trusted co-signer that vows never to sign a double-spend. The
 reason we don't yet see such technology permeating the ecosystem is
 because, to date, zero-conf transactions have been irreversible enough,
 but this has only been a happy accident; it was never promised, and it
 should not be relied upon.


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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Jeffrey Paul
It seems to me that FSS RBF must enforce identical OP_RETURN data on the output 
scripts as the first seen transaction, as well, to safely continue support for 
various other applications built atop the blockchain.

Is there a canonical implementation of FSS RBF around somewhere I can review?

Best,
-jp

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5539 AD00 DE4C 42F3 AFE1 1575 0524 43F4 DF2A 55C2

 On 19.06.2015, at 15:52, Chun Wang 1240...@gmail.com wrote:
 
 Before F2Pool's launch, I performed probably the only successful
 bitcoin double spend in the March 2013 fork without any mining power.
 [ https://bitcointalk.org/index.php?topic=152348.0 ] I know how bad
 the full RBF is. We are going to switch to FSS RBF in a few hours.
 Sorry.
 
 On Fri, Jun 19, 2015 at 9:44 PM, Peter Todd p...@petertodd.org wrote:
 On Fri, Jun 19, 2015 at 09:33:05AM -0400, Stephen Morse wrote:
 It is disappointing that F2Pool would enable full RBF when the safe
 alternative, first-seen-safe RBF, is also available, especially since the
 fees they would gain by supporting full RBF over FSS RBF would likely be
 negligible. Did they consider using FSS RBF instead?
 
 Specifically the following is what I told them:
 
 We are
 interested in the replace-by-fee patch, but I am not following the
 development closely, more background info is needed, like what the
 difference between standard and zeroconf versions? Thanks.
 
 Great!
 
 Basically both let you replace one transaction with another that pays a
 higher fee. First-seen-safe replace-by-fee adds the additional criteria
 that all outputs of the old transaction still need to be paid by the new
 transaction, with = as many Bitcoins. Basically, it makes sure that if
 someone was paid by tx1, then tx2 will still pay them.
 
 I've written about how wallets can use RBF and FSS-RBF to more
 efficiently use the blockchain on the bitcoin-development mailing list:
 
 http://www.mail-archive.com/bitcoin-development@lists.sourceforge.net/msg07813.html
 http://www.mail-archive.com/bitcoin-development@lists.sourceforge.net/msg07829.html
 
 Basically, for the purpose of increasing fees, RBF is something like %50
 cheaper than CPFP, and FSS-RBF is something like %25 cheaper.
 
 In addition, for ease of implementation, my new FSS-RBF has a number of
 other restrictions. For instance, you can't replace multiple
 transactions with one, you can't replace a transaction whose outputs
 have already been spent, you can't replace a transaction with one that
 spends additional unconfirmed inputs, etc. These restrictions aren't
 set in stone, but they do make the code simpler and less likely to
 have bugs.
 
 In comparison my previous standard RBF patch can replace multiple
 transactions with one, can replace long chains of transactions, etc.
 It's willing to do more computation before deciding if a transaction
 should be replaced, with more complex logic; it probably has a higher
 chance of having a bug or DoS attack.
 
 You've probably seen the huge controversy around zeroconf with regard to
 standard replace-by-fee. While FSS RBF doesn't make zeroconf any safer,
 it also doesn't make it any more dangerous, so politically with regard
 to zeroconf it makes no difference. You *can* still use it doublespend
 by taking advantage of how different transactions are accepted
 differently, but that's true of *every* change we've ever made to
 Bitcoin Core - by upgrading to v0.10 from v0.9 you've also broken
 zeroconf in the same way.
 
 
 Having said that... honestly, zeroconf is pretty broken already. Only
 with pretty heroic measures like connecting to a significant fraction of
 the Bitcoin network at once, as well as connecting to getblocktemplate
 supporting miners to figure out what transactions are being mined, are
 services having any hope of avoiding getting ripped off. For the average
 user their wallets do a terrible job of showing whether or not an
 unconfirmed transaction will go through. For example, Schildbach's
 Bitcoin wallet for Android has no code at all to detect double-spends
 until they get mined, and I've been able to trick it into showing
 completely invalid transactions. In fact, currently Bitcoin XT will
 relay invalid transactions that are doublepsends, and Schildbach's
 wallet displays them as valid, unconfirmed, payments. It's really no
 surprise to me that nearly no-one in the Bitcoin ecosystem accepts
 unconfirmed transactions without some kind of protection that doesn't
 rely on first-seen-safe mempool behavior. For instance, many ATM's these
 days know who their customers are due to AML requirements, so while you
 can deposit Bitcoins and get your funds instantly, the protection for
 the ATM operator is that they can go to the police if you rip them off;
 I've spoken to ATM operators who didn't do this who've lost hundreds or
 even thousands of dollars before giving up on zeroconf.
 
 My big worry with zeroconf is a service like Coinbase or Shapeshift
 coming to rely on it, and then 

Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Matt Whitlock
On Friday, 19 June 2015, at 9:18 am, Adrian Macneil wrote:
 If full-RBF sees any significant adoption by miners, then it will actively
 harm bitcoin adoption by reducing or removing the ability for online or POS
 merchants to accept bitcoin payments at all.

Retail POS merchants probably should not be accepting vanilla Bitcoin payments, 
as Bitcoin alone does not (and cannot) guarantee the irreversibility of a 
transaction until it has been buried several blocks deep in the chain. Retail 
merchants should be requiring a co-signature from a mutually trusted co-signer 
that vows never to sign a double-spend. The reason we don't yet see such 
technology permeating the ecosystem is because, to date, zero-conf transactions 
have been irreversible enough, but this has only been a happy accident; it 
was never promised, and it should not be relied upon.

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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Aaron Voisine
 What retail needs is escrowed microchannel hubs (what lightning provides,
for example), which enable untrusted instant payments. Not reliance on
single-signer zeroconf transactions that can never be made safe.

They don't need to be made cryptographically safe, they just have to be
safer than, for instance, credit card payments that can be charged back. As
long as it's reasonably good in practice, that's fine.


Aaron Voisine
co-founder and CEO
breadwallet.com

On Fri, Jun 19, 2015 at 6:09 PM, Mark Friedenbach m...@friedenbach.org
wrote:

 What retail needs is escrowed microchannel hubs (what lightning provides,
 for example), which enable untrusted instant payments. Not reliance on
 single-signer zeroconf transactions that can never be made safe.

 On Fri, Jun 19, 2015 at 5:47 PM, Andreas Petersson andr...@petersson.at
 wrote:

 I have some experience here. If you are seriously suggesting these
 measures, you might as well kill retail transactions altogether.

 In practice, if a retail place starts to accept bitcoin they have a
 similar situation as with cash, only that the fraud potential is much
 lower. (e.g. 100-dollar bill for a sandwich might turn out fake later)
 and the fraud frequency is also much lower.

 0-conf concerns were never a problem in practice. except for 2-way atms
 i have never heard of a problem that was caused by double spends.
 while adding these measures is generally positive, requiring them means
 excluding 99.9% of the potential users. so you might as well not do it.

 RBF as implemented by F2Pool just flat out lowers Bitcoins utility
 value. So it's a bad thing.

 for any online or automated system, waiting for a handful of
 confirmations was always recommended practice.

 Am 19.06.2015 um 22:39 schrieb Matt Whitlock:
  Retail POS merchants probably should not be accepting vanilla Bitcoin
  payments, as Bitcoin alone does not (and cannot) guarantee the
  irreversibility of a transaction until it has been buried several
  blocks deep in the chain. Retail merchants should be requiring a
  co-signature from a mutually trusted co-signer that vows never to sign
  a double-spend.



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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Luke Dashjr
On Saturday, June 20, 2015 1:23:03 AM Aaron Voisine wrote:
 They don't need to be made cryptographically safe, they just have to be
 safer than, for instance, credit card payments that can be charged back. As
 long as it's reasonably good in practice, that's fine.

They never will be. You can get a decent rate of success merely by making one 
transaction propagate fast (eg, 1 input, 1 output) and the other slow (eg, 
1000 inputs, 1000 outputs) and choosing your peers carefully. The only reason 
unconfirmed transactions aren't double spent today is because nobody is 
seriously *trying*.

Luke

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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Mark Friedenbach
What retail needs is escrowed microchannel hubs (what lightning provides,
for example), which enable untrusted instant payments. Not reliance on
single-signer zeroconf transactions that can never be made safe.

On Fri, Jun 19, 2015 at 5:47 PM, Andreas Petersson andr...@petersson.at
wrote:

 I have some experience here. If you are seriously suggesting these
 measures, you might as well kill retail transactions altogether.

 In practice, if a retail place starts to accept bitcoin they have a
 similar situation as with cash, only that the fraud potential is much
 lower. (e.g. 100-dollar bill for a sandwich might turn out fake later)
 and the fraud frequency is also much lower.

 0-conf concerns were never a problem in practice. except for 2-way atms
 i have never heard of a problem that was caused by double spends.
 while adding these measures is generally positive, requiring them means
 excluding 99.9% of the potential users. so you might as well not do it.

 RBF as implemented by F2Pool just flat out lowers Bitcoins utility
 value. So it's a bad thing.

 for any online or automated system, waiting for a handful of
 confirmations was always recommended practice.

 Am 19.06.2015 um 22:39 schrieb Matt Whitlock:
  Retail POS merchants probably should not be accepting vanilla Bitcoin
  payments, as Bitcoin alone does not (and cannot) guarantee the
  irreversibility of a transaction until it has been buried several
  blocks deep in the chain. Retail merchants should be requiring a
  co-signature from a mutually trusted co-signer that vows never to sign
  a double-spend.



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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Eric Lombrozo
It all comes down to managing risk. If you’ve got a decent risk model with 
capped losses and safe recovery mechanisms…and it’s still profitable…it’s fine. 
But most payment processors and merchants right now probably don’t have 
particularly good risk models and are making many dangerous assumptions…and 
probably would not be able to gracefully handle very many risk scenarios.

- Eric Lombrozo


 On Jun 19, 2015, at 6:23 PM, Aaron Voisine vois...@gmail.com wrote:
 
  What retail needs is escrowed microchannel hubs (what lightning provides, 
  for example), which enable untrusted instant payments. Not reliance on 
  single-signer zeroconf transactions that can never be made safe.
 
 They don't need to be made cryptographically safe, they just have to be safer 
 than, for instance, credit card payments that can be charged back. As long as 
 it's reasonably good in practice, that's fine.
 
 
 Aaron Voisine
 co-founder and CEO
 breadwallet.com http://breadwallet.com/
 On Fri, Jun 19, 2015 at 6:09 PM, Mark Friedenbach m...@friedenbach.org 
 mailto:m...@friedenbach.org wrote:
 What retail needs is escrowed microchannel hubs (what lightning provides, for 
 example), which enable untrusted instant payments. Not reliance on 
 single-signer zeroconf transactions that can never be made safe.
 
 On Fri, Jun 19, 2015 at 5:47 PM, Andreas Petersson andr...@petersson.at 
 mailto:andr...@petersson.at wrote:
 I have some experience here. If you are seriously suggesting these
 measures, you might as well kill retail transactions altogether.
 
 In practice, if a retail place starts to accept bitcoin they have a
 similar situation as with cash, only that the fraud potential is much
 lower. (e.g. 100-dollar bill for a sandwich might turn out fake later)
 and the fraud frequency is also much lower.
 
 0-conf concerns were never a problem in practice. except for 2-way atms
 i have never heard of a problem that was caused by double spends.
 while adding these measures is generally positive, requiring them means
 excluding 99.9% of the potential users. so you might as well not do it.
 
 RBF as implemented by F2Pool just flat out lowers Bitcoins utility
 value. So it's a bad thing.
 
 for any online or automated system, waiting for a handful of
 confirmations was always recommended practice.
 
 Am 19.06.2015 um 22:39 schrieb Matt Whitlock:
  Retail POS merchants probably should not be accepting vanilla Bitcoin
  payments, as Bitcoin alone does not (and cannot) guarantee the
  irreversibility of a transaction until it has been buried several
  blocks deep in the chain. Retail merchants should be requiring a
  co-signature from a mutually trusted co-signer that vows never to sign
  a double-spend.
 
 
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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Andreas Petersson
I have some experience here. If you are seriously suggesting these
measures, you might as well kill retail transactions altogether.

In practice, if a retail place starts to accept bitcoin they have a
similar situation as with cash, only that the fraud potential is much
lower. (e.g. 100-dollar bill for a sandwich might turn out fake later)
and the fraud frequency is also much lower.

0-conf concerns were never a problem in practice. except for 2-way atms
i have never heard of a problem that was caused by double spends.
while adding these measures is generally positive, requiring them means
excluding 99.9% of the potential users. so you might as well not do it.

RBF as implemented by F2Pool just flat out lowers Bitcoins utility
value. So it's a bad thing.

for any online or automated system, waiting for a handful of
confirmations was always recommended practice.

Am 19.06.2015 um 22:39 schrieb Matt Whitlock:
 Retail POS merchants probably should not be accepting vanilla Bitcoin
 payments, as Bitcoin alone does not (and cannot) guarantee the
 irreversibility of a transaction until it has been buried several
 blocks deep in the chain. Retail merchants should be requiring a
 co-signature from a mutually trusted co-signer that vows never to sign
 a double-spend.  



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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Peter Todd
On Fri, Jun 19, 2015 at 09:37:49PM +0800, Chun Wang wrote:
 Hello. We recognize the problem. We will switch to FSS RBF soon. Thanks.

No worries, let me know if you have any issues. You have my phone
number.

While my own preference - and a number of other devs - is full-RBF,
either one is a good step forward for Bitcoin.

-- 
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03188926be14e5fbe2f8f9c63c9fb8e2ba4b14ab04f1c9ab


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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Peter Todd
On Fri, Jun 19, 2015 at 09:33:03AM -0400, Gavin Andresen wrote:
 I just sent the following email to F2Pool:
 
 
 I was disappointed to see Peter Todd claiming that you have (or will?) run
 his replace-by-fee patch.
 
 I strongly encourage you to wait until most wallet software supports
 replace-by-fee before doing that, because until that happens replace-by-fee
 just makes it easier to steal from bitcoin-accepting merchants.

Do you mean just full-RBF, or FSS-RBF as well?


Speaking of, could we get a confirmation that Coinbase is, or is not,
one of the merchant service providers trying to get hashing power
contracts with mining pools for guaranteed transaction acceptance? IIRC
you are still an advisor to them. This is a serious concern for the
reasons I outlined in my post.

Equally if anyone else from Coinbase would like to chime in that'd be
great.

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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Chun Wang
Before F2Pool's launch, I performed probably the only successful
bitcoin double spend in the March 2013 fork without any mining power.
[ https://bitcointalk.org/index.php?topic=152348.0 ] I know how bad
the full RBF is. We are going to switch to FSS RBF in a few hours.
Sorry.

On Fri, Jun 19, 2015 at 9:44 PM, Peter Todd p...@petertodd.org wrote:
 On Fri, Jun 19, 2015 at 09:33:05AM -0400, Stephen Morse wrote:
 It is disappointing that F2Pool would enable full RBF when the safe
 alternative, first-seen-safe RBF, is also available, especially since the
 fees they would gain by supporting full RBF over FSS RBF would likely be
 negligible. Did they consider using FSS RBF instead?

 Specifically the following is what I told them:

 We are
 interested in the replace-by-fee patch, but I am not following the
 development closely, more background info is needed, like what the
 difference between standard and zeroconf versions? Thanks.

 Great!

 Basically both let you replace one transaction with another that pays a
 higher fee. First-seen-safe replace-by-fee adds the additional criteria
 that all outputs of the old transaction still need to be paid by the new
 transaction, with = as many Bitcoins. Basically, it makes sure that if
 someone was paid by tx1, then tx2 will still pay them.

 I've written about how wallets can use RBF and FSS-RBF to more
 efficiently use the blockchain on the bitcoin-development mailing list:

 http://www.mail-archive.com/bitcoin-development@lists.sourceforge.net/msg07813.html
 http://www.mail-archive.com/bitcoin-development@lists.sourceforge.net/msg07829.html

 Basically, for the purpose of increasing fees, RBF is something like %50
 cheaper than CPFP, and FSS-RBF is something like %25 cheaper.

 In addition, for ease of implementation, my new FSS-RBF has a number of
 other restrictions. For instance, you can't replace multiple
 transactions with one, you can't replace a transaction whose outputs
 have already been spent, you can't replace a transaction with one that
 spends additional unconfirmed inputs, etc. These restrictions aren't
 set in stone, but they do make the code simpler and less likely to
 have bugs.

 In comparison my previous standard RBF patch can replace multiple
 transactions with one, can replace long chains of transactions, etc.
 It's willing to do more computation before deciding if a transaction
 should be replaced, with more complex logic; it probably has a higher
 chance of having a bug or DoS attack.

 You've probably seen the huge controversy around zeroconf with regard to
 standard replace-by-fee. While FSS RBF doesn't make zeroconf any safer,
 it also doesn't make it any more dangerous, so politically with regard
 to zeroconf it makes no difference. You *can* still use it doublespend
 by taking advantage of how different transactions are accepted
 differently, but that's true of *every* change we've ever made to
 Bitcoin Core - by upgrading to v0.10 from v0.9 you've also broken
 zeroconf in the same way.


 Having said that... honestly, zeroconf is pretty broken already. Only
 with pretty heroic measures like connecting to a significant fraction of
 the Bitcoin network at once, as well as connecting to getblocktemplate
 supporting miners to figure out what transactions are being mined, are
 services having any hope of avoiding getting ripped off. For the average
 user their wallets do a terrible job of showing whether or not an
 unconfirmed transaction will go through. For example, Schildbach's
 Bitcoin wallet for Android has no code at all to detect double-spends
 until they get mined, and I've been able to trick it into showing
 completely invalid transactions. In fact, currently Bitcoin XT will
 relay invalid transactions that are doublepsends, and Schildbach's
 wallet displays them as valid, unconfirmed, payments. It's really no
 surprise to me that nearly no-one in the Bitcoin ecosystem accepts
 unconfirmed transactions without some kind of protection that doesn't
 rely on first-seen-safe mempool behavior. For instance, many ATM's these
 days know who their customers are due to AML requirements, so while you
 can deposit Bitcoins and get your funds instantly, the protection for
 the ATM operator is that they can go to the police if you rip them off;
 I've spoken to ATM operators who didn't do this who've lost hundreds or
 even thousands of dollars before giving up on zeroconf.

 My big worry with zeroconf is a service like Coinbase or Shapeshift
 coming to rely on it, and then attempting to secure it by gaining
 control of a majority of hashing power. For instance, if Coinbase had
 contracts with 80% of the Bitcoin hashing power to guarantee their
 transactions would get mined, but 20% of the hashing power didn't sign
 up, then the only way to guarantee their transactions could be for the
 80% to not build on blocks containing doublespends by the 20%. There's
 no way in a decentralized network to come to consensus about what
 transactions are or are 

Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Adrian Macneil

 For instance, if Coinbase had
 contracts with 80% of the Bitcoin hashing power to guarantee their
 transactions would get mined, but 20% of the hashing power didn't sign
 up, then the only way to guarantee their transactions could be for the
 80% to not build on blocks containing doublespends by the 20%.


This seems to be more of a problem with centralized mining than zeroconf
transactions.

Speaking of, could we get a confirmation that Coinbase is, or is not,
 one of the merchant service providers trying to get hashing power
 contracts with mining pools for guaranteed transaction acceptance? IIRC
 you are still an advisor to them. This is a serious concern for the
 reasons I outlined in my post.


We have no contracts in place or plans to do this that I am aware of.

However, we do rely pretty heavily on zeroconf transactions for merchant
processing, so if any significant portion of the mining pools started
running your unsafe RBF patch, then we would probably need to look into
this as a way to prevent fraud.

In the long term, I would love to see a safe, decentralized solution for
accepting zeroconf transactions. However, right now there is no such
solution supported by any wallets in use, and I don't think breaking the
current bitcoin behavior for everyone is the best way to achieve this.

Adrian
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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Peter Todd
On Fri, Jun 19, 2015 at 09:33:05AM -0400, Stephen Morse wrote:
 It is disappointing that F2Pool would enable full RBF when the safe
 alternative, first-seen-safe RBF, is also available, especially since the
 fees they would gain by supporting full RBF over FSS RBF would likely be
 negligible. Did they consider using FSS RBF instead?

Specifically the following is what I told them:

 We are
 interested in the replace-by-fee patch, but I am not following the
 development closely, more background info is needed, like what the
 difference between standard and zeroconf versions? Thanks.

Great!

Basically both let you replace one transaction with another that pays a
higher fee. First-seen-safe replace-by-fee adds the additional criteria
that all outputs of the old transaction still need to be paid by the new
transaction, with = as many Bitcoins. Basically, it makes sure that if
someone was paid by tx1, then tx2 will still pay them.

I've written about how wallets can use RBF and FSS-RBF to more
efficiently use the blockchain on the bitcoin-development mailing list:

http://www.mail-archive.com/bitcoin-development@lists.sourceforge.net/msg07813.html
http://www.mail-archive.com/bitcoin-development@lists.sourceforge.net/msg07829.html

Basically, for the purpose of increasing fees, RBF is something like %50
cheaper than CPFP, and FSS-RBF is something like %25 cheaper.

In addition, for ease of implementation, my new FSS-RBF has a number of
other restrictions. For instance, you can't replace multiple
transactions with one, you can't replace a transaction whose outputs
have already been spent, you can't replace a transaction with one that
spends additional unconfirmed inputs, etc. These restrictions aren't
set in stone, but they do make the code simpler and less likely to
have bugs.

In comparison my previous standard RBF patch can replace multiple
transactions with one, can replace long chains of transactions, etc.
It's willing to do more computation before deciding if a transaction
should be replaced, with more complex logic; it probably has a higher
chance of having a bug or DoS attack.

You've probably seen the huge controversy around zeroconf with regard to
standard replace-by-fee. While FSS RBF doesn't make zeroconf any safer,
it also doesn't make it any more dangerous, so politically with regard
to zeroconf it makes no difference. You *can* still use it doublespend
by taking advantage of how different transactions are accepted
differently, but that's true of *every* change we've ever made to
Bitcoin Core - by upgrading to v0.10 from v0.9 you've also broken
zeroconf in the same way.


Having said that... honestly, zeroconf is pretty broken already. Only
with pretty heroic measures like connecting to a significant fraction of
the Bitcoin network at once, as well as connecting to getblocktemplate
supporting miners to figure out what transactions are being mined, are
services having any hope of avoiding getting ripped off. For the average
user their wallets do a terrible job of showing whether or not an
unconfirmed transaction will go through. For example, Schildbach's
Bitcoin wallet for Android has no code at all to detect double-spends
until they get mined, and I've been able to trick it into showing
completely invalid transactions. In fact, currently Bitcoin XT will
relay invalid transactions that are doublepsends, and Schildbach's
wallet displays them as valid, unconfirmed, payments. It's really no
surprise to me that nearly no-one in the Bitcoin ecosystem accepts
unconfirmed transactions without some kind of protection that doesn't
rely on first-seen-safe mempool behavior. For instance, many ATM's these
days know who their customers are due to AML requirements, so while you
can deposit Bitcoins and get your funds instantly, the protection for
the ATM operator is that they can go to the police if you rip them off;
I've spoken to ATM operators who didn't do this who've lost hundreds or
even thousands of dollars before giving up on zeroconf.

My big worry with zeroconf is a service like Coinbase or Shapeshift
coming to rely on it, and then attempting to secure it by gaining
control of a majority of hashing power. For instance, if Coinbase had
contracts with 80% of the Bitcoin hashing power to guarantee their
transactions would get mined, but 20% of the hashing power didn't sign
up, then the only way to guarantee their transactions could be for the
80% to not build on blocks containing doublespends by the 20%. There's
no way in a decentralized network to come to consensus about what
transactions are or are not valid without mining itself, so you could
end up in a situation where unless you're part of one of the big pools
you can't reliably mine at all because your blocks may get rejected for
containing doublespends.

One of my goal with standard replace-by-fee is to prevent this scenario
by forcing merchants and others to implement ways of accepting zeroconf
transactions safely that work in a decentralized 

Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Adrian Macneil
Extremely disappointed to hear this. This change turns double spending from
a calculable (and affordable) risk for merchant payment processors into
certain profit for scammers, and provides no useful benefit for consumers.

I sincerely hope that F2Pool reconsider, given that RBF will decrease the
overall utility of bitcoin and reduce the number of people using it for
online purchases.

Adrian




On Fri, Jun 19, 2015 at 6:33 AM, Stephen Morse stephencalebmo...@gmail.com
wrote:

 It is disappointing that F2Pool would enable full RBF when the safe
 alternative, first-seen-safe RBF, is also available, especially since the
 fees they would gain by supporting full RBF over FSS RBF would likely be
 negligible. Did they consider using FSS RBF instead?

 Best,
 Stephen

 On Fri, Jun 19, 2015 at 6:39 AM, Peter Todd p...@petertodd.org wrote:

 Yesterday F2Pool, currently the largest pool with 21% of the hashing
 power, enabled full replace-by-fee (RBF) support after discussions with
 me. This means that transactions that F2Pool has will be replaced if a
 conflicting transaction pays a higher fee. There are no requirements for
 the replacement transaction to pay addresses that were paid by the
 previous transaction.


 I'm a user. What does this mean for me?
 ---

 In the short term, very little. Wallet software aimed at average users
 has no ability to reliably detect conditions where an unconfirmed
 transaction may be double-spent by the sender. For example, Schildbach's
 Bitcoin Wallet for Android doesn't even detect double-spends of
 unconfirmed transactions when connected to a RBF or Bitcoin XT nodes
 that propagate them. The least sophisticated double-spend attack
 possibly - simply broadcasting two conflicting transactions at the same
 time - has about 50% probability of success against these wallets.

 Additionally, SPV wallets based on bitcoinj can't even detect invalid
 transactions reliably, instead trusting the full node(s) it is connected
 too over the unauthenticated, unencrypted, P2P protocol to do validation
 for them. For instance due to a unfixed bug¹ Bitcoin XT nodes will relay
 double-spends that spend the output of the conflicting transaction. I've
 personally tested this with Schildbach's Bitcoin Wallet for Android,
 which shows such invalid transactions as standard, unconfirmed,
 transactions.

 Users should continue to assume that unconfirmed transactions could be
 trivially reversed by the sender until the first confirmation. In
 general, only the sender can reverse a transaction, so if you do trust
 the sender feel free to assume an unconfirmed transaction will
 eventually confirm. However, if you do not trust the sender and/or have
 no other recourse if they double-spend you, wait until at least the
 first confirmation before assuming the transaction will go through.

 In the long term, miner support of full RBF has a number of advantages
 to users, allowing you to more efficiently make transactions, paying
 lower fees. However you'll need a wallet supporting these features; none
 exist yet.


 I'm a business. What does this mean for me?
 ---

 If you use your own node to verify transactions, you probably are in a
 similar situation as average users, so again, this means very little to
 you.

 If you use a payment processor/transaction API such as BitPay, Coinbase,
 BlockCypher, etc. you may or may not be accepting unconfirmed
 transactions, and they may or may not be guaranteed by your payment
 processor even if double-spent. If like most merchants you're using the
 API such that confirmations are required prior to accepting orders (e.g.
 taking a meaningful loss such as shipping a product if the tx is
 reversed) nothing changes for you. If not I recommend you contact your
 payment processor.


 I'm a miner. Why should I support replace-by-fee?
 -

 Whether full or first-seen-safe⁵ RBF support (along with
 child-pays-for-parent) is an important step towards a fully functioning
 transaction fee market that doesn't lead to users' transactions getting
 mysteriously stuck, particularly during network flooding
 events/attacks. A better functioning fee market will help reduce
 pressure to increase the blocksize, particularly from the users creating
 the most valuable transactions.

 Full RBF also helps make use of the limited blockchain space more
 efficiently, with up to 90%+ transaction size savings possible in some
 transaction patterns. (e.g. long payment chains⁶) More users in less
 blockchain space will lead to higher overall fees per block.

 Finally as we'll discuss below full RBF prevents a number of serious
 threats to the existing level playing field that miners operate in.


 Why can't we make accepting unconfirmed txs from untrusted people safe?
 ---

 For a decentralized wallet, the situation 

Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Chun Wang
Hello. We recognize the problem. We will switch to FSS RBF soon. Thanks.

On Fri, Jun 19, 2015 at 9:33 PM, Stephen Morse
stephencalebmo...@gmail.com wrote:
 It is disappointing that F2Pool would enable full RBF when the safe
 alternative, first-seen-safe RBF, is also available, especially since the
 fees they would gain by supporting full RBF over FSS RBF would likely be
 negligible. Did they consider using FSS RBF instead?

 Best,
 Stephen

 On Fri, Jun 19, 2015 at 6:39 AM, Peter Todd p...@petertodd.org wrote:

 Yesterday F2Pool, currently the largest pool with 21% of the hashing
 power, enabled full replace-by-fee (RBF) support after discussions with
 me. This means that transactions that F2Pool has will be replaced if a
 conflicting transaction pays a higher fee. There are no requirements for
 the replacement transaction to pay addresses that were paid by the
 previous transaction.


 I'm a user. What does this mean for me?
 ---

 In the short term, very little. Wallet software aimed at average users
 has no ability to reliably detect conditions where an unconfirmed
 transaction may be double-spent by the sender. For example, Schildbach's
 Bitcoin Wallet for Android doesn't even detect double-spends of
 unconfirmed transactions when connected to a RBF or Bitcoin XT nodes
 that propagate them. The least sophisticated double-spend attack
 possibly - simply broadcasting two conflicting transactions at the same
 time - has about 50% probability of success against these wallets.

 Additionally, SPV wallets based on bitcoinj can't even detect invalid
 transactions reliably, instead trusting the full node(s) it is connected
 too over the unauthenticated, unencrypted, P2P protocol to do validation
 for them. For instance due to a unfixed bug¹ Bitcoin XT nodes will relay
 double-spends that spend the output of the conflicting transaction. I've
 personally tested this with Schildbach's Bitcoin Wallet for Android,
 which shows such invalid transactions as standard, unconfirmed,
 transactions.

 Users should continue to assume that unconfirmed transactions could be
 trivially reversed by the sender until the first confirmation. In
 general, only the sender can reverse a transaction, so if you do trust
 the sender feel free to assume an unconfirmed transaction will
 eventually confirm. However, if you do not trust the sender and/or have
 no other recourse if they double-spend you, wait until at least the
 first confirmation before assuming the transaction will go through.

 In the long term, miner support of full RBF has a number of advantages
 to users, allowing you to more efficiently make transactions, paying
 lower fees. However you'll need a wallet supporting these features; none
 exist yet.


 I'm a business. What does this mean for me?
 ---

 If you use your own node to verify transactions, you probably are in a
 similar situation as average users, so again, this means very little to
 you.

 If you use a payment processor/transaction API such as BitPay, Coinbase,
 BlockCypher, etc. you may or may not be accepting unconfirmed
 transactions, and they may or may not be guaranteed by your payment
 processor even if double-spent. If like most merchants you're using the
 API such that confirmations are required prior to accepting orders (e.g.
 taking a meaningful loss such as shipping a product if the tx is
 reversed) nothing changes for you. If not I recommend you contact your
 payment processor.


 I'm a miner. Why should I support replace-by-fee?
 -

 Whether full or first-seen-safe⁵ RBF support (along with
 child-pays-for-parent) is an important step towards a fully functioning
 transaction fee market that doesn't lead to users' transactions getting
 mysteriously stuck, particularly during network flooding
 events/attacks. A better functioning fee market will help reduce
 pressure to increase the blocksize, particularly from the users creating
 the most valuable transactions.

 Full RBF also helps make use of the limited blockchain space more
 efficiently, with up to 90%+ transaction size savings possible in some
 transaction patterns. (e.g. long payment chains⁶) More users in less
 blockchain space will lead to higher overall fees per block.

 Finally as we'll discuss below full RBF prevents a number of serious
 threats to the existing level playing field that miners operate in.


 Why can't we make accepting unconfirmed txs from untrusted people safe?
 ---

 For a decentralized wallet, the situation is pretty bleak. These wallets
 only have a handful of connections to the network, with no way of
 knowing if those connections give an accurate view of what transactions
 miners actually know about.

 The only serious attempt to fix this problem for decentralized wallets
 that has been actually deployed is 

Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Stephen Morse
It is disappointing that F2Pool would enable full RBF when the safe
alternative, first-seen-safe RBF, is also available, especially since the
fees they would gain by supporting full RBF over FSS RBF would likely be
negligible. Did they consider using FSS RBF instead?

Best,
Stephen

On Fri, Jun 19, 2015 at 6:39 AM, Peter Todd p...@petertodd.org wrote:

 Yesterday F2Pool, currently the largest pool with 21% of the hashing
 power, enabled full replace-by-fee (RBF) support after discussions with
 me. This means that transactions that F2Pool has will be replaced if a
 conflicting transaction pays a higher fee. There are no requirements for
 the replacement transaction to pay addresses that were paid by the
 previous transaction.


 I'm a user. What does this mean for me?
 ---

 In the short term, very little. Wallet software aimed at average users
 has no ability to reliably detect conditions where an unconfirmed
 transaction may be double-spent by the sender. For example, Schildbach's
 Bitcoin Wallet for Android doesn't even detect double-spends of
 unconfirmed transactions when connected to a RBF or Bitcoin XT nodes
 that propagate them. The least sophisticated double-spend attack
 possibly - simply broadcasting two conflicting transactions at the same
 time - has about 50% probability of success against these wallets.

 Additionally, SPV wallets based on bitcoinj can't even detect invalid
 transactions reliably, instead trusting the full node(s) it is connected
 too over the unauthenticated, unencrypted, P2P protocol to do validation
 for them. For instance due to a unfixed bug¹ Bitcoin XT nodes will relay
 double-spends that spend the output of the conflicting transaction. I've
 personally tested this with Schildbach's Bitcoin Wallet for Android,
 which shows such invalid transactions as standard, unconfirmed,
 transactions.

 Users should continue to assume that unconfirmed transactions could be
 trivially reversed by the sender until the first confirmation. In
 general, only the sender can reverse a transaction, so if you do trust
 the sender feel free to assume an unconfirmed transaction will
 eventually confirm. However, if you do not trust the sender and/or have
 no other recourse if they double-spend you, wait until at least the
 first confirmation before assuming the transaction will go through.

 In the long term, miner support of full RBF has a number of advantages
 to users, allowing you to more efficiently make transactions, paying
 lower fees. However you'll need a wallet supporting these features; none
 exist yet.


 I'm a business. What does this mean for me?
 ---

 If you use your own node to verify transactions, you probably are in a
 similar situation as average users, so again, this means very little to
 you.

 If you use a payment processor/transaction API such as BitPay, Coinbase,
 BlockCypher, etc. you may or may not be accepting unconfirmed
 transactions, and they may or may not be guaranteed by your payment
 processor even if double-spent. If like most merchants you're using the
 API such that confirmations are required prior to accepting orders (e.g.
 taking a meaningful loss such as shipping a product if the tx is
 reversed) nothing changes for you. If not I recommend you contact your
 payment processor.


 I'm a miner. Why should I support replace-by-fee?
 -

 Whether full or first-seen-safe⁵ RBF support (along with
 child-pays-for-parent) is an important step towards a fully functioning
 transaction fee market that doesn't lead to users' transactions getting
 mysteriously stuck, particularly during network flooding
 events/attacks. A better functioning fee market will help reduce
 pressure to increase the blocksize, particularly from the users creating
 the most valuable transactions.

 Full RBF also helps make use of the limited blockchain space more
 efficiently, with up to 90%+ transaction size savings possible in some
 transaction patterns. (e.g. long payment chains⁶) More users in less
 blockchain space will lead to higher overall fees per block.

 Finally as we'll discuss below full RBF prevents a number of serious
 threats to the existing level playing field that miners operate in.


 Why can't we make accepting unconfirmed txs from untrusted people safe?
 ---

 For a decentralized wallet, the situation is pretty bleak. These wallets
 only have a handful of connections to the network, with no way of
 knowing if those connections give an accurate view of what transactions
 miners actually know about.

 The only serious attempt to fix this problem for decentralized wallets
 that has been actually deployed is Andresen/Harding's double-spend
 relaying, implemented in Bitcoin XT. It relays up to one double-spend
 transaction per double-spent txout, with the intended effect to warn
 

Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Peter Todd
On Fri, Jun 19, 2015 at 07:00:56AM -0700, Adrian Macneil wrote:
 
  For instance, if Coinbase had
  contracts with 80% of the Bitcoin hashing power to guarantee their
  transactions would get mined, but 20% of the hashing power didn't sign
  up, then the only way to guarantee their transactions could be for the
  80% to not build on blocks containing doublespends by the 20%.
 
 
 This seems to be more of a problem with centralized mining than zeroconf
 transactions.

You're mistaking cause and effect: the contracts will drive
centralization of mining, as only the larger, non-anonymous, players
have the ability to enter into such contracts.

 Speaking of, could we get a confirmation that Coinbase is, or is not,
  one of the merchant service providers trying to get hashing power
  contracts with mining pools for guaranteed transaction acceptance? IIRC
  you are still an advisor to them. This is a serious concern for the
  reasons I outlined in my post.
 
 
 We have no contracts in place or plans to do this that I am aware of.
 
 However, we do rely pretty heavily on zeroconf transactions for merchant
 processing, so if any significant portion of the mining pools started
 running your unsafe RBF patch, then we would probably need to look into
 this as a way to prevent fraud.

What happens if the mining pools who are mining double-spends aren't
doing it delibrately? Sybil attacking pools appears to have been done
before to get double-spends though, equally there are many other changes
the reduce the reliability of transaction confirmations. For instance
the higher demands on bandwidth of a higher blocksize will inevitably
reduce the syncronicity of mempools, resulting in double-spend
opportunities. Similarly many proposals to limit mempool size allow
zeroconf double-spends.

In that case would you enter into such contracts?

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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Lawrence Nahum
Chun Wang 1240902 at gmail.com writes:

 Hello. We recognize the problem. We will switch to FSS RBF soon. Thanks.

FSS RBF is better than no RBF but we think it is better to use full RBF.

We think Full RBF is better for a number of reasons:

-user experience
-efficiency
-cost
-code complexity

We think FSS RBF is  great progress but ultimately less efficient and more 
complicated to keep alive something that never worked properly.

And why would miner pick the option paying less when other miners run the 
option paying more? It may be soon more than 1-5% of block reward.

A lot of users don't have multiple UTXO handy.

Full RBF is the best, second FSS RBF and we'd be looking into supporting 
them both separately so that miners and users can pick whichever they 
prefer.

If users only had one UTXO it makes sense to use Full RBF since there are no 
other options.

Disclosure: GreenAddress always believed zero conf transactions are not 
secure and that miners have the incentive to run FBF; this bias doesn't make 
the above less true 



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[Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Peter Todd
Yesterday F2Pool, currently the largest pool with 21% of the hashing
power, enabled full replace-by-fee (RBF) support after discussions with
me. This means that transactions that F2Pool has will be replaced if a
conflicting transaction pays a higher fee. There are no requirements for
the replacement transaction to pay addresses that were paid by the
previous transaction.


I'm a user. What does this mean for me?
---

In the short term, very little. Wallet software aimed at average users
has no ability to reliably detect conditions where an unconfirmed
transaction may be double-spent by the sender. For example, Schildbach's
Bitcoin Wallet for Android doesn't even detect double-spends of
unconfirmed transactions when connected to a RBF or Bitcoin XT nodes
that propagate them. The least sophisticated double-spend attack
possibly - simply broadcasting two conflicting transactions at the same
time - has about 50% probability of success against these wallets.

Additionally, SPV wallets based on bitcoinj can't even detect invalid
transactions reliably, instead trusting the full node(s) it is connected
too over the unauthenticated, unencrypted, P2P protocol to do validation
for them. For instance due to a unfixed bug¹ Bitcoin XT nodes will relay
double-spends that spend the output of the conflicting transaction. I've
personally tested this with Schildbach's Bitcoin Wallet for Android,
which shows such invalid transactions as standard, unconfirmed,
transactions.

Users should continue to assume that unconfirmed transactions could be
trivially reversed by the sender until the first confirmation. In
general, only the sender can reverse a transaction, so if you do trust
the sender feel free to assume an unconfirmed transaction will
eventually confirm. However, if you do not trust the sender and/or have
no other recourse if they double-spend you, wait until at least the
first confirmation before assuming the transaction will go through.

In the long term, miner support of full RBF has a number of advantages
to users, allowing you to more efficiently make transactions, paying
lower fees. However you'll need a wallet supporting these features; none
exist yet.


I'm a business. What does this mean for me?
---

If you use your own node to verify transactions, you probably are in a
similar situation as average users, so again, this means very little to
you.

If you use a payment processor/transaction API such as BitPay, Coinbase,
BlockCypher, etc. you may or may not be accepting unconfirmed
transactions, and they may or may not be guaranteed by your payment
processor even if double-spent. If like most merchants you're using the
API such that confirmations are required prior to accepting orders (e.g.
taking a meaningful loss such as shipping a product if the tx is
reversed) nothing changes for you. If not I recommend you contact your
payment processor.


I'm a miner. Why should I support replace-by-fee?
-

Whether full or first-seen-safe⁵ RBF support (along with
child-pays-for-parent) is an important step towards a fully functioning
transaction fee market that doesn't lead to users' transactions getting
mysteriously stuck, particularly during network flooding
events/attacks. A better functioning fee market will help reduce
pressure to increase the blocksize, particularly from the users creating
the most valuable transactions.

Full RBF also helps make use of the limited blockchain space more
efficiently, with up to 90%+ transaction size savings possible in some
transaction patterns. (e.g. long payment chains⁶) More users in less
blockchain space will lead to higher overall fees per block.

Finally as we'll discuss below full RBF prevents a number of serious
threats to the existing level playing field that miners operate in.


Why can't we make accepting unconfirmed txs from untrusted people safe?
---

For a decentralized wallet, the situation is pretty bleak. These wallets
only have a handful of connections to the network, with no way of
knowing if those connections give an accurate view of what transactions
miners actually know about.

The only serious attempt to fix this problem for decentralized wallets
that has been actually deployed is Andresen/Harding's double-spend
relaying, implemented in Bitcoin XT. It relays up to one double-spend
transaction per double-spent txout, with the intended effect to warn
recipients. In practice however this functionality makes it easier to
double-spend rather than harder, by giving an efficient and easy way to
get double-spends to miners after the fact. Notably my RBF
implementation even connects to Bitcoin XT nodes, reserving a % of all
incoming and outgoing connection slots for them.

Additionally Bitcoin XT's double-spend relaying is subject to attacks
include bandwidth exhaustion, sybil 

Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Chun Wang
On Fri, Jun 19, 2015 at 10:00 PM, Adrian Macneil adr...@coinbase.com wrote:
 However, we do rely pretty heavily on zeroconf transactions for merchant
 processing, so if any significant portion of the mining pools started
 running your unsafe RBF patch, then we would probably need to look into this
 as a way to prevent fraud.

This might be useful to you: https://www.f2pool.com/api/mempool

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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread justusranvier
-BEGIN PGP SIGNED MESSAGE-
Hash: SHA512

On 2015-06-19 15:11, Peter Todd wrote:
 If you ask me to pay you 1BTC at address A and I create tx1 that pays
 1BTC to A1 and 2BTC of chain to C, what's wrong with me creating tx2
 that still pays 1BTC to A, but now only pays 1.999BTC to C? I'm not
 defrauding you, I'm just reducing the value of my change address to pay
 a higher fee. Similarly if I now need to pay Bob 0.5BTC, I can create
 tx3 paying 1BTC to A, 0.5BTC to B, and 1.498BTC to C.
 
 Yet from the point of view of an external observer they have no idea 
 why
 the transaction outputs reduced in size, nor any way of knowing if 
 fraud
 did or did not occur.

If there are two transactions which spend the same inputs, and each 
transaction has completely different output scripts, then this is prima 
facie fraudulent. https://en.wikipedia.org/wiki/Prima_facie

If the two transactions have identical output scripts, and one output is 
reduced in value to increase the transaction fee, that has the 
appearance of honest dealing. There is a possibility that the payer has 
chose to under-pay their payee in order to over-pay the miner, but 
that's not what a reasonable observer would assume at first glance.

Adding outputs to a transaction, while keeping all the existing outputs 
exactly how they are is another way of increasing the transaction fee of 
a transaction and is prima facie non-fraudulent.

Note that child-pays-for-parent has none of this ambiguity.

 What do you think of Bitcoin XT then? It relays double-spends, which
 makes it much easier to get double-spends to miners than before. In
 particular you see a lot of zero-fee transactions being replaced by
 fee-paying transactions, relayed through Bitcoin XT nodes and then
 mined. Is that encouraging fraud?

I haven't closely looked into the features of Bitcoin XT because I'm 
hoping that it never becomes relevant. I do want to see a heterogenous 
implementation network develop, but Bitcoin XT doesn't really count 
since it's a derivative of the Bitcoin Core codebase.

In general, I think every signed Bitcoin transaction sent between 
different parties is part of a valid, enforceable contract (using common 
law definitions which predate any particular legal jurisdiction). 
Handling contracts and money is Serious Business and so the decision of 
how software should respond to double spends should not be made 
frivolously.

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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Jeff Garzik
Yes, FSS RBF is far better.


On Fri, Jun 19, 2015 at 6:52 AM, Chun Wang 1240...@gmail.com wrote:

 Before F2Pool's launch, I performed probably the only successful
 bitcoin double spend in the March 2013 fork without any mining power.
 [ https://bitcointalk.org/index.php?topic=152348.0 ] I know how bad
 the full RBF is. We are going to switch to FSS RBF in a few hours.
 Sorry.

 On Fri, Jun 19, 2015 at 9:44 PM, Peter Todd p...@petertodd.org wrote:
  On Fri, Jun 19, 2015 at 09:33:05AM -0400, Stephen Morse wrote:
  It is disappointing that F2Pool would enable full RBF when the safe
  alternative, first-seen-safe RBF, is also available, especially since
 the
  fees they would gain by supporting full RBF over FSS RBF would likely be
  negligible. Did they consider using FSS RBF instead?
 
  Specifically the following is what I told them:
 
  We are
  interested in the replace-by-fee patch, but I am not following the
  development closely, more background info is needed, like what the
  difference between standard and zeroconf versions? Thanks.
 
  Great!
 
  Basically both let you replace one transaction with another that pays a
  higher fee. First-seen-safe replace-by-fee adds the additional criteria
  that all outputs of the old transaction still need to be paid by the new
  transaction, with = as many Bitcoins. Basically, it makes sure that if
  someone was paid by tx1, then tx2 will still pay them.
 
  I've written about how wallets can use RBF and FSS-RBF to more
  efficiently use the blockchain on the bitcoin-development mailing list:
 
 
 http://www.mail-archive.com/bitcoin-development@lists.sourceforge.net/msg07813.html
 
 http://www.mail-archive.com/bitcoin-development@lists.sourceforge.net/msg07829.html
 
  Basically, for the purpose of increasing fees, RBF is something like %50
  cheaper than CPFP, and FSS-RBF is something like %25 cheaper.
 
  In addition, for ease of implementation, my new FSS-RBF has a number of
  other restrictions. For instance, you can't replace multiple
  transactions with one, you can't replace a transaction whose outputs
  have already been spent, you can't replace a transaction with one that
  spends additional unconfirmed inputs, etc. These restrictions aren't
  set in stone, but they do make the code simpler and less likely to
  have bugs.
 
  In comparison my previous standard RBF patch can replace multiple
  transactions with one, can replace long chains of transactions, etc.
  It's willing to do more computation before deciding if a transaction
  should be replaced, with more complex logic; it probably has a higher
  chance of having a bug or DoS attack.
 
  You've probably seen the huge controversy around zeroconf with regard to
  standard replace-by-fee. While FSS RBF doesn't make zeroconf any safer,
  it also doesn't make it any more dangerous, so politically with regard
  to zeroconf it makes no difference. You *can* still use it doublespend
  by taking advantage of how different transactions are accepted
  differently, but that's true of *every* change we've ever made to
  Bitcoin Core - by upgrading to v0.10 from v0.9 you've also broken
  zeroconf in the same way.
 
 
  Having said that... honestly, zeroconf is pretty broken already. Only
  with pretty heroic measures like connecting to a significant fraction of
  the Bitcoin network at once, as well as connecting to getblocktemplate
  supporting miners to figure out what transactions are being mined, are
  services having any hope of avoiding getting ripped off. For the average
  user their wallets do a terrible job of showing whether or not an
  unconfirmed transaction will go through. For example, Schildbach's
  Bitcoin wallet for Android has no code at all to detect double-spends
  until they get mined, and I've been able to trick it into showing
  completely invalid transactions. In fact, currently Bitcoin XT will
  relay invalid transactions that are doublepsends, and Schildbach's
  wallet displays them as valid, unconfirmed, payments. It's really no
  surprise to me that nearly no-one in the Bitcoin ecosystem accepts
  unconfirmed transactions without some kind of protection that doesn't
  rely on first-seen-safe mempool behavior. For instance, many ATM's these
  days know who their customers are due to AML requirements, so while you
  can deposit Bitcoins and get your funds instantly, the protection for
  the ATM operator is that they can go to the police if you rip them off;
  I've spoken to ATM operators who didn't do this who've lost hundreds or
  even thousands of dollars before giving up on zeroconf.
 
  My big worry with zeroconf is a service like Coinbase or Shapeshift
  coming to rely on it, and then attempting to secure it by gaining
  control of a majority of hashing power. For instance, if Coinbase had
  contracts with 80% of the Bitcoin hashing power to guarantee their
  transactions would get mined, but 20% of the hashing power didn't sign
  up, then the only way to guarantee their 

Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Eric Lombrozo
OK, a few things here:

The Bitcoin network was designed (or should be designed) with the requirement 
that it can withstand deliberate double-spend attacks that can come from 
anywhere at any time…and relaxing this assumption without adequately assessing 
the risk (i.e. I’ve never been hacked before so I can assume it’s safe) is 
extremely dangerous at best and just horrid security practice at worst. Your 
users might not thank you for not getting hacked - but they surely will not 
like it when you DO get hacked…and lack a proper recovery plan.

Furthermore, the protocol itself makes no assumptions regarding the intentions 
behind someone signing two conflicting transactions. There are many potential 
use cases where doing so could make a lot of sense. Had the protocol been 
designed along the lines of, say, tendermint…where signing multiple conflicting 
blocks results in loss of one’s funds…then the protocol itself disincentivizes 
the behavior without requiring any sort of altruistic, moralistic assumptions. 
That would also mean we’d need a different mechanism for the use cases that 
things like RBF address.

Thirdly, taken to the extreme, the viewpoint of “signing a conflicting 
transaction is fraud and vandalism” means that if for whatever reason you 
attempt to propagate a transaction and nobody mines it for a very long time, 
you’re not entitled to immediately reclaim those funds…they must remain in 
limbo forever.


- Eric Lombrozo


 On Jun 19, 2015, at 8:11 AM, Peter Todd p...@petertodd.org wrote:
 
 On Fri, Jun 19, 2015 at 03:00:57PM +, justusranv...@riseup.net wrote:
 On 2015-06-19 10:39, Peter Todd wrote:
 
 Yesterday F2Pool, currently the largest pool with 21% of the hashing
 power, enabled full replace-by-fee (RBF) support after discussions
 with
 me. This means that transactions that F2Pool has will be replaced if
 a
 conflicting transaction pays a higher fee. There are no requirements
 for
 the replacement transaction to pay addresses that were paid by the
 previous transaction.
 
 
 Intentional fraud is a bad thing to add to a financial protocol.
 
 A user who creates conflicting transactions, one that pays someone else
 and another which does not pay them, and broadcasts both of them, has
 just self-incriminated themselves by producing prima facie evidence of
 fraud.
 
 Depends.
 
 If you ask me to pay you 1BTC at address A and I create tx1 that pays
 1BTC to A1 and 2BTC of chain to C, what's wrong with me creating tx2
 that still pays 1BTC to A, but now only pays 1.999BTC to C? I'm not
 defrauding you, I'm just reducing the value of my change address to pay
 a higher fee. Similarly if I now need to pay Bob 0.5BTC, I can create
 tx3 paying 1BTC to A, 0.5BTC to B, and 1.498BTC to C.
 
 Yet from the point of view of an external observer they have no idea why
 the transaction outputs reduced in size, nor any way of knowing if fraud
 did or did not occur.
 
 Equally, maybe you tell me Actually, just give me 0.5BTC to cancel out
 that debt, in which case I'm not breaking any contract at all by giving
 you less money than I first promised - the contract has changed.
 
 Again, none of this can or should be observable to anyone other than the
 parties directly involved.
 
 It may be the case that since Bitcoin spans multiple legal jurisdictions
 and can be use anonymously that the victims of such fraud can not rely
 on legal recourse, and it may also be the case that proof of work is how
 Bitcoin deals with the aforementioned factors, but regardless
 un-prosecutable fraud is still fraud and anyone who encourages it should
 be recognied as a bad actors.
 
 Committing vandalism and encouraging fraud to prove a point may be
 something the network can't stop on a technical level, but there's no
 reason not to call it out for what it is.
 
 What do you think of Bitcoin XT then? It relays double-spends, which
 makes it much easier to get double-spends to miners than before. In
 particular you see a lot of zero-fee transactions being replaced by
 fee-paying transactions, relayed through Bitcoin XT nodes and then
 mined. Is that encouraging fraud?
 
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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Peter Todd
On Fri, Jun 19, 2015 at 03:00:57PM +, justusranv...@riseup.net wrote:
 On 2015-06-19 10:39, Peter Todd wrote:
 
  Yesterday F2Pool, currently the largest pool with 21% of the hashing
  power, enabled full replace-by-fee (RBF) support after discussions 
 with
  me. This means that transactions that F2Pool has will be replaced if 
 a
  conflicting transaction pays a higher fee. There are no requirements 
 for
  the replacement transaction to pay addresses that were paid by the
  previous transaction.
 
 
 Intentional fraud is a bad thing to add to a financial protocol.
 
 A user who creates conflicting transactions, one that pays someone else 
 and another which does not pay them, and broadcasts both of them, has 
 just self-incriminated themselves by producing prima facie evidence of 
 fraud.

Depends.

If you ask me to pay you 1BTC at address A and I create tx1 that pays
1BTC to A1 and 2BTC of chain to C, what's wrong with me creating tx2
that still pays 1BTC to A, but now only pays 1.999BTC to C? I'm not
defrauding you, I'm just reducing the value of my change address to pay
a higher fee. Similarly if I now need to pay Bob 0.5BTC, I can create
tx3 paying 1BTC to A, 0.5BTC to B, and 1.498BTC to C.

Yet from the point of view of an external observer they have no idea why
the transaction outputs reduced in size, nor any way of knowing if fraud
did or did not occur.

Equally, maybe you tell me Actually, just give me 0.5BTC to cancel out
that debt, in which case I'm not breaking any contract at all by giving
you less money than I first promised - the contract has changed.

Again, none of this can or should be observable to anyone other than the
parties directly involved.

 It may be the case that since Bitcoin spans multiple legal jurisdictions 
 and can be use anonymously that the victims of such fraud can not rely 
 on legal recourse, and it may also be the case that proof of work is how 
 Bitcoin deals with the aforementioned factors, but regardless 
 un-prosecutable fraud is still fraud and anyone who encourages it should 
 be recognied as a bad actors.
 
 Committing vandalism and encouraging fraud to prove a point may be 
 something the network can't stop on a technical level, but there's no 
 reason not to call it out for what it is.

What do you think of Bitcoin XT then? It relays double-spends, which
makes it much easier to get double-spends to miners than before. In
particular you see a lot of zero-fee transactions being replaced by
fee-paying transactions, relayed through Bitcoin XT nodes and then
mined. Is that encouraging fraud?

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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Adrian Macneil

 Unless you're sybil attacking the network and miners, consuming valuable
 resources and creating systemic risks of failure like we saw with
 Chainalysis, I don't see how you're getting very small double-spend
 probabilities.


So connecting to many nodes just because we can and it's not technically
prevented is bad for the network and creating systemic risks of failure,
but relaying harmful double spend transactions just because you can and
it's not technically prevented, is good for everyone?


 You know, you're creating an interesting bit of game theory here: if I'm
 a miner who doesn't already have a mining contract, why not implement
 full-RBF to force Coinbase to offer me one? One reason might be because
 other miners with such a contract - a majority - are going to be asked
 by Coinbase to reorg you out of the blockchain, but then we have a
 situation where a single entity has control of the blockchain.


If someone did enter into contracts with miners to mine certain
transactions, and had a guarantee that the miners would not build on
previous blocks which included double spends, then they would only need
contracts with 51% of the network anyway. So it wouldn't really matter if
you were a small time miner and wanted to run full-RBF.


 For the good of Bitcoin, and your own company, you'd do well to firmly
 state that under no condition will Coinbase ever enter into mining
 contracts.


I don't personally see what good this does for bitcoin. Now you are
suggesting that we should prevent a 51% attack by using policy and
promises, rather than a technical solution. How is this any better than us
relying on existing double spend rules which are based on policy and
promises?
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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Jeff Garzik
On Fri, Jun 19, 2015 at 6:44 AM, Peter Todd p...@petertodd.org wrote:

 Having said that... honestly, zeroconf is pretty broken already. Only
 with pretty heroic measures like connecting to a significant fraction of
 the Bitcoin network at once, as well as connecting to getblocktemplate
 supporting miners to figure out what transactions are being mined, are
 services having any hope of avoiding getting ripped off. For the average
 user their wallets do a terrible job of showing whether or not an


This is no excuse for further degrading the overall network security.

There are many issues to address in the bitcoin ecosystem.  It negatively
impacts users to roll out scorched earth replace-by-fee given today's
ecosystem.

Yes, zero conf security is poor.  An outright attack on zero conf degrades
user security even more.

-- 
Jeff Garzik
Bitcoin core developer and open source evangelist
BitPay, Inc.  https://bitpay.com/
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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread justusranvier
-BEGIN PGP SIGNED MESSAGE-
Hash: SHA512

On 2015-06-19 10:39, Peter Todd wrote:

 Yesterday F2Pool, currently the largest pool with 21% of the hashing
 power, enabled full replace-by-fee (RBF) support after discussions 
with
 me. This means that transactions that F2Pool has will be replaced if 
a
 conflicting transaction pays a higher fee. There are no requirements 
for
 the replacement transaction to pay addresses that were paid by the
 previous transaction.


Intentional fraud is a bad thing to add to a financial protocol.

A user who creates conflicting transactions, one that pays someone else 
and another which does not pay them, and broadcasts both of them, has 
just self-incriminated themselves by producing prima facie evidence of 
fraud.

It may be the case that since Bitcoin spans multiple legal jurisdictions 
and can be use anonymously that the victims of such fraud can not rely 
on legal recourse, and it may also be the case that proof of work is how 
Bitcoin deals with the aforementioned factors, but regardless 
un-prosecutable fraud is still fraud and anyone who encourages it should 
be recognied as a bad actors.

Committing vandalism and encouraging fraud to prove a point may be 
something the network can't stop on a technical level, but there's no 
reason not to call it out for what it is.

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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Peter Todd
On Fri, Jun 19, 2015 at 07:30:17AM -0700, Adrian Macneil wrote:
  In that case would you enter into such contracts?
 
 
 We take it as it comes.
 
 Currently, it's perfectly possible to accept zeroconf transactions with
 only a very small chance of double spend. As long as it's only possible to
 double spend a small fraction of the time, it's an acceptable cost to us in
 exchange for being able to provide a fast checkout experience to customers
 and merchants.

Unless you're sybil attacking the network and miners, consuming valuable
resources and creating systemic risks of failure like we saw with
Chainalysis, I don't see how you're getting very small double-spend
probabilities.

You realise how the fact that F2Pool is using full-RBF right now does
strongly suggest that the chances of a double-spend are not only low,
but more importantly, vary greatly? Any small change in relaying policy
or even network conditions creates opportunities to double-spend.

 If the status quo changes, then we will need to investigate alternatives
 (which realistically would include mining contracts, or only accepting
 instant payments from other trusted hosted wallets, which would be a net
 loss for decentralization).

You know, you're creating an interesting bit of game theory here: if I'm
a miner who doesn't already have a mining contract, why not implement
full-RBF to force Coinbase to offer me one? One reason might be because
other miners with such a contract - a majority - are going to be asked
by Coinbase to reorg you out of the blockchain, but then we have a
situation where a single entity has control of the blockchain.

For the good of Bitcoin, and your own company, you'd do well to firmly
state that under no condition will Coinbase ever enter into mining
contracts.

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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Adrian Macneil
Great. Thank you for this!

Adrian

On Fri, Jun 19, 2015 at 7:40 AM, Chun Wang 1240...@gmail.com wrote:

 On Fri, Jun 19, 2015 at 10:00 PM, Adrian Macneil adr...@coinbase.com
 wrote:
  However, we do rely pretty heavily on zeroconf transactions for merchant
  processing, so if any significant portion of the mining pools started
  running your unsafe RBF patch, then we would probably need to look into
 this
  as a way to prevent fraud.

 This might be useful to you: https://www.f2pool.com/api/mempool


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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Jeff Garzik
This is very disappointing.  scorched earth replace-by-fee implemented
first at a pool, without updating wallets and merchants, is very
anti-social and increases the ability to perform Finney attacks and
double-spends.

The community is progressing more towards a safer replace-by-fee model, as
indicated by the following code change:
https://github.com/bitcoin/bitcoin/pull/6176


On Fri, Jun 19, 2015 at 3:39 AM, Peter Todd p...@petertodd.org wrote:

 Yesterday F2Pool, currently the largest pool with 21% of the hashing
 power, enabled full replace-by-fee (RBF) support after discussions with
 me. This means that transactions that F2Pool has will be replaced if a
 conflicting transaction pays a higher fee. There are no requirements for
 the replacement transaction to pay addresses that were paid by the
 previous transaction.


 I'm a user. What does this mean for me?
 ---

 In the short term, very little. Wallet software aimed at average users
 has no ability to reliably detect conditions where an unconfirmed
 transaction may be double-spent by the sender. For example, Schildbach's
 Bitcoin Wallet for Android doesn't even detect double-spends of
 unconfirmed transactions when connected to a RBF or Bitcoin XT nodes
 that propagate them. The least sophisticated double-spend attack
 possibly - simply broadcasting two conflicting transactions at the same
 time - has about 50% probability of success against these wallets.

 Additionally, SPV wallets based on bitcoinj can't even detect invalid
 transactions reliably, instead trusting the full node(s) it is connected
 too over the unauthenticated, unencrypted, P2P protocol to do validation
 for them. For instance due to a unfixed bug¹ Bitcoin XT nodes will relay
 double-spends that spend the output of the conflicting transaction. I've
 personally tested this with Schildbach's Bitcoin Wallet for Android,
 which shows such invalid transactions as standard, unconfirmed,
 transactions.

 Users should continue to assume that unconfirmed transactions could be
 trivially reversed by the sender until the first confirmation. In
 general, only the sender can reverse a transaction, so if you do trust
 the sender feel free to assume an unconfirmed transaction will
 eventually confirm. However, if you do not trust the sender and/or have
 no other recourse if they double-spend you, wait until at least the
 first confirmation before assuming the transaction will go through.

 In the long term, miner support of full RBF has a number of advantages
 to users, allowing you to more efficiently make transactions, paying
 lower fees. However you'll need a wallet supporting these features; none
 exist yet.


 I'm a business. What does this mean for me?
 ---

 If you use your own node to verify transactions, you probably are in a
 similar situation as average users, so again, this means very little to
 you.

 If you use a payment processor/transaction API such as BitPay, Coinbase,
 BlockCypher, etc. you may or may not be accepting unconfirmed
 transactions, and they may or may not be guaranteed by your payment
 processor even if double-spent. If like most merchants you're using the
 API such that confirmations are required prior to accepting orders (e.g.
 taking a meaningful loss such as shipping a product if the tx is
 reversed) nothing changes for you. If not I recommend you contact your
 payment processor.


 I'm a miner. Why should I support replace-by-fee?
 -

 Whether full or first-seen-safe⁵ RBF support (along with
 child-pays-for-parent) is an important step towards a fully functioning
 transaction fee market that doesn't lead to users' transactions getting
 mysteriously stuck, particularly during network flooding
 events/attacks. A better functioning fee market will help reduce
 pressure to increase the blocksize, particularly from the users creating
 the most valuable transactions.

 Full RBF also helps make use of the limited blockchain space more
 efficiently, with up to 90%+ transaction size savings possible in some
 transaction patterns. (e.g. long payment chains⁶) More users in less
 blockchain space will lead to higher overall fees per block.

 Finally as we'll discuss below full RBF prevents a number of serious
 threats to the existing level playing field that miners operate in.


 Why can't we make accepting unconfirmed txs from untrusted people safe?
 ---

 For a decentralized wallet, the situation is pretty bleak. These wallets
 only have a handful of connections to the network, with no way of
 knowing if those connections give an accurate view of what transactions
 miners actually know about.

 The only serious attempt to fix this problem for decentralized wallets
 that has been actually deployed is Andresen/Harding's double-spend
 relaying, implemented in Bitcoin XT. It relays up 

Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Adrian Macneil

  We have no contracts in place or plans to do this that I am aware of.
 
  However, we do rely pretty heavily on zeroconf transactions for merchant
  processing, so if any significant portion of the mining pools started
  running your unsafe RBF patch, then we would probably need to look into
  this as a way to prevent fraud.

 What happens if the mining pools who are mining double-spends aren't
 doing it delibrately? Sybil attacking pools appears to have been done
 before to get double-spends though, equally there are many other changes
 the reduce the reliability of transaction confirmations. For instance
 the higher demands on bandwidth of a higher blocksize will inevitably
 reduce the syncronicity of mempools, resulting in double-spend
 opportunities. Similarly many proposals to limit mempool size allow
 zeroconf double-spends.

 In that case would you enter into such contracts?


We take it as it comes.

Currently, it's perfectly possible to accept zeroconf transactions with
only a very small chance of double spend. As long as it's only possible to
double spend a small fraction of the time, it's an acceptable cost to us in
exchange for being able to provide a fast checkout experience to customers
and merchants.

If the status quo changes, then we will need to investigate alternatives
(which realistically would include mining contracts, or only accepting
instant payments from other trusted hosted wallets, which would be a net
loss for decentralization).

Long term we would prefer to see an open, decentralized solution, such as
payment channels / green addresses / lightening networks. However, I think
as a community we are a long way away from choosing a standard here and
implementing it across all popular wallet software and merchant processors.

Adrian
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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Peter Todd
On Fri, Jun 19, 2015 at 09:44:08AM -0400, Peter Todd wrote:
 On Fri, Jun 19, 2015 at 09:33:05AM -0400, Stephen Morse wrote:
  It is disappointing that F2Pool would enable full RBF when the safe
  alternative, first-seen-safe RBF, is also available, especially since the
  fees they would gain by supporting full RBF over FSS RBF would likely be
  negligible. Did they consider using FSS RBF instead?
 
 Specifically the following is what I told them:

Incidentally, because someone asked that message was sent two weeks ago.


Also, a shout-out to Marshal Long of FinalHash for his help with
(FSS)-RBF deployment and for getting F2Pool and myself in touch, as well
as his work in talking getting pools on board with BIP66.

-- 
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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread justusranvier
-BEGIN PGP SIGNED MESSAGE-
Hash: SHA512

On 2015-06-19 16:36, Matt Whitlock wrote:
 On Friday, 19 June 2015, at 3:53 pm, justusranv...@riseup.net wrote:
 I'd also like to note that prima facie doesn't mean always, it 
 means
 that the default assumption, unless proven otherwise.
 
 Why would you automatically assume fraud by default? Shouldn't the
 null hypothesis be the default? Without any information one way or
 another, you ought to make *no assumption* about the fraudulence or
 non-fraudulence of any given double-spend.

If we have ECDSA proof that an entity intentionally made and publicly 
announced incompatible promises regarding the disposition of particular 
Bitcoins under their control, then why shouldn't that be assumed to be a 
fraud attempt unless shown otherwise?

There are ways of achiving transaction fee adjustment after broadcast 
that do not present the appearance of, or opportunity for, fraud. If 
those options are available and the user chooses not to use them in 
favor of the option that does, that makes bad intentions even more 
probable.

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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Milly Bitcoin
prima facie generally means that in a court case the burden of proof 
shifts from one party to another. For instance, if you have a federal 
trademark registration that is prima fascia evidence of those rights 
even though they could still be challenged.  To say a prosecutor would 
have prima fascia evidence of a crime because double spend was detected 
is quite a stretch.



On 6/19/2015 12:36 PM, Matt Whitlock wrote:
 On Friday, 19 June 2015, at 3:53 pm, justusranv...@riseup.net wrote:
 I'd also like to note that prima facie doesn't mean always, it means
 that the default assumption, unless proven otherwise.
 Why would you automatically assume fraud by default? Shouldn't the null 
 hypothesis be the default? Without any information one way or another, you 
 ought to make *no assumption* about the fraudulence or non-fraudulence of any 
 given double-spend.

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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Matt Whitlock
On Friday, 19 June 2015, at 3:53 pm, justusranv...@riseup.net wrote:
 I'd also like to note that prima facie doesn't mean always, it means
 that the default assumption, unless proven otherwise.

Why would you automatically assume fraud by default? Shouldn't the null 
hypothesis be the default? Without any information one way or another, you 
ought to make *no assumption* about the fraudulence or non-fraudulence of any 
given double-spend.

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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread justusranvier
-BEGIN PGP SIGNED MESSAGE-
Hash: SHA512

On 2015-06-19 16:42, Eric Lombrozo wrote:
 If we want a non-repudiation mechanism in the protocol, we should
 explicitly define one rather than relying on “prima facie”
 assumptions. Otherwise, I would recommend not relying on the existence
 of a signed transaction as proof of intent to pay…

Again, I'm not talking about any changes to the protocol. The mining 
mechanism in the Bitcoin protocol is the fallback method of resolving 
fraud that isn't prevented or resolved via other mechanisms.

There are plenty of other ways economic actors resolve their 
disagreements other than blockchain adjudication. Sometimes when both 
parties are identified and reside in the same legal jurisdiction, 
contract violations and fraud can be adjudicated in courts. In some 
situations, the parties involved may have access to private dispute 
resolution techniques.

Sometimes the stakeholders in the network act to preserve the long term 
value of their investments, even if it means passing short-term profits. 
The more of those stakeholders there are in Bitcoin, the more effective 
it is to make the case for choices that are long-term beneficial.

The degree to which anyone should rely on a signed transaction as 
assurance of future payment is not a question with a universal answer. 
It depends on the particular details of the situation, and the parties 
involved, and their own risk tolerances and time preferences. There's no 
right answer for everyone, which is why let's break zeroconf because 
*I* don't think it's safe enough is a kind of vandalism.
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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread justusranvier
-BEGIN PGP SIGNED MESSAGE-
Hash: SHA512

On 2015-06-19 15:37, Eric Lombrozo wrote:
 OK, a few things here:
 
 The Bitcoin network was designed (or should be designed) with the
 requirement that it can withstand deliberate double-spend attacks that
 can come from anywhere at any time…and relaxing this assumption
 without adequately assessing the risk (i.e. I’ve never been hacked
 before so I can assume it’s safe) is extremely dangerous at best and
 just horrid security practice at worst. Your users might not thank you
 for not getting hacked - but they surely will not like it when you DO
 get hacked…and lack a proper recovery plan.
 
 Furthermore, the protocol itself makes no assumptions regarding the
 intentions behind someone signing two conflicting transactions. There
 are many potential use cases where doing so could make a lot of sense.
 Had the protocol been designed along the lines of, say,
 tendermint…where signing multiple conflicting blocks results in loss
 of one’s funds…then the protocol itself disincentivizes the behavior
 without requiring any sort of altruistic, moralistic assumptions. That
 would also mean we’d need a different mechanism for the use cases that
 things like RBF address.
 
 Thirdly, taken to the extreme, the viewpoint of “signing a conflicting
 transaction is fraud and vandalism” means that if for whatever reason
 you attempt to propagate a transaction and nobody mines it for a very
 long time, you’re not entitled to immediately reclaim those funds…they
 must remain in limbo forever.

I'm not talking about changing the protocol - I'm talking about the 
business relationships between users of Bitcoin.

I would expect a payment processor to inform the merchants of relevant 
double spends that it observes on the network, even if the payment is 
actually successful, so that the merchant can decide for themselves 
whether or not to pursue it out of band.

Mining is a kind of technical fallback that allows the network to 
resolve human misbehavior without human intervention. If nobody ever 
attempted to make a fraudulent payment, we wouldn't need mining at all 
because the signed transaction itself is proof of intention to pay. That 
it exists doesn't suddenly make fraud less fraudulent and mean that 
users who are in a position to pursue out of band recourse shouldn't do 
so.

I agree that there are valid reasons for replacing transactions in the 
mempool, I just think they should be implemented in a way that doesn't 
facilitate fraud.

I'd also like to note that prima facie doesn't mean always, it means 
that the default assumption, unless proven otherwise.

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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Peter Todd
On Fri, Jun 19, 2015 at 09:18:54AM -0700, Adrian Macneil wrote:
 
   So connecting to many nodes just because we can and it's not technically
   prevented is bad for the network and creating systemic risks of failure,
 
  Well it is actually; that's why myself, Wladimir van der Laan, and
  Gregory Maxwell all specifically¹ called Chainalysis's actions a sybil
  attack.
 
  The Bitcoin P2P network is resilliant to failure when the chance of any
  one node going down is uncorrelated with others. For instance if you
  accidentally introduced a bug in your nodes that failed to relay
  transactions/blocks properly, you'd simultaneously be disrupting a large
  portion of the network all at once.
 
 
 This is exactly what your RBF patch is doing. By your own logic, nodes on
 the network should be allowed to relay (or not relay) whatever they wish.

Ah, seems you misunderstand the problem.

By properly we're concerned that things do get relayed, not that they do
not. In particularl with blocks a fairly to relay valid blocks will
quickly lead to a loss of consensus.

  How many nodes is Coinbase connecting too? What software are they
  running? What subnets are they using? In particular, are they all on one
  subnet or multiple?
 
 
 We're running about a dozen nodes running regular Bitcoin Core in various
 subnets. We aren't doing anything particularly out of the ordinary here.
 Nothing that would fall under your definition of a sybil attack or harmful
 to the network.

Right, so those dozen nodes, how many outgoing connections are they
making?

  But of course, you'd never 51% the network right? After all it's not
  possible to guarantee that your miner won't mine double-spends, as there
  is no single consensus definition of which transaction came first, nor
  can there be.
 
  Or do you see things differently? If I'm a small miner should I be
  worried my blocks might be rejected by the majority with hashing power
  contracts because I'm unable to predict which transactions Coinbase
  believes should go in the blockchain?
 
 
 You seem so concerned that we are actively trying to harm or control the
 network. We're simply trying to drive bitcoin adoption by making it easy
 for people to spend their bitcoin with merchants online. The problems we
 face are no different from other merchant processors, or small independent
 merchants accepting online or point-of-sale payments.

 We've historically had relatively little interest in what miners were doing
 (until RBF came out) - for the most part it didn't affect our business.
 However, most large merchants would be simply uninterested in accepting
 bitcoin if we forced their customers to wait 10-60 minutes for their
 payments to confirm. Many have inventory management systems which can not
 even place items on hold that long.

While your goals may be reasonable, again, the question is how are you
going to achieve them? Do you accept that you may be in a position where
you can't guarantee confirmations? Again, what's your plan to deal with
this? For instance, I know Coinbase is contractually obliged to accept
zeroconf payments with at least some of your customers - how strong are
those agreements?

What we're worried about is your plan appears to include nothing
concrete beyond the possibility of getting contracts with hashing power,
maybe even just a majority of hashing power. This is something that
should concern everyone in the Bitcoin ecosystem, and it'd help if you
clearly stated what your intentions are.

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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Peter Todd
On Fri, Jun 19, 2015 at 09:42:33AM -0700, Eric Lombrozo wrote:
 If we want a non-repudiation mechanism in the protocol, we should explicitly 
 define one rather than relying on “prima facie” assumptions. Otherwise, I 
 would recommend not relying on the existence of a signed transaction as proof 
 of intent to pay…

Indeed.

For instance, one of the ideas behind my Proofchains work is that you
could hind all details of a smartcontract-whatchamacallit protocol
behind single-use-seals in a consensus blockchain. Closing those seals,
that is spending the appropriate txouts, represents things in the
protocol which are absolutely unobservable to anyone without the data
behind those hashes, an extreme version of the above.


Incidentally, some patent prior-art exposure:

https://github.com/proofchains/python-proofchains

:)

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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Adrian Macneil

  So connecting to many nodes just because we can and it's not technically
  prevented is bad for the network and creating systemic risks of failure,

 Well it is actually; that's why myself, Wladimir van der Laan, and
 Gregory Maxwell all specifically¹ called Chainalysis's actions a sybil
 attack.

 The Bitcoin P2P network is resilliant to failure when the chance of any
 one node going down is uncorrelated with others. For instance if you
 accidentally introduced a bug in your nodes that failed to relay
 transactions/blocks properly, you'd simultaneously be disrupting a large
 portion of the network all at once.


This is exactly what your RBF patch is doing. By your own logic, nodes on
the network should be allowed to relay (or not relay) whatever they wish.


 How many nodes is Coinbase connecting too? What software are they
 running? What subnets are they using? In particular, are they all on one
 subnet or multiple?


We're running about a dozen nodes running regular Bitcoin Core in various
subnets. We aren't doing anything particularly out of the ordinary here.
Nothing that would fall under your definition of a sybil attack or harmful
to the network.

  You know, you're creating an interesting bit of game theory here: if I'm
   a miner who doesn't already have a mining contract, why not implement
   full-RBF to force Coinbase to offer me one? One reason might be because
   other miners with such a contract - a majority - are going to be asked
   by Coinbase to reorg you out of the blockchain, but then we have a
   situation where a single entity has control of the blockchain.
  
 
  If someone did enter into contracts with miners to mine certain
  transactions, and had a guarantee that the miners would not build on
  previous blocks which included double spends, then they would only need
  contracts with 51% of the network anyway. So it wouldn't really matter if
  you were a small time miner and wanted to run full-RBF.

 But of course, you'd never 51% the network right? After all it's not
 possible to guarantee that your miner won't mine double-spends, as there
 is no single consensus definition of which transaction came first, nor
 can there be.

 Or do you see things differently? If I'm a small miner should I be
 worried my blocks might be rejected by the majority with hashing power
 contracts because I'm unable to predict which transactions Coinbase
 believes should go in the blockchain?


You seem so concerned that we are actively trying to harm or control the
network. We're simply trying to drive bitcoin adoption by making it easy
for people to spend their bitcoin with merchants online. The problems we
face are no different from other merchant processors, or small independent
merchants accepting online or point-of-sale payments.

We've historically had relatively little interest in what miners were doing
(until RBF came out) - for the most part it didn't affect our business.
However, most large merchants would be simply uninterested in accepting
bitcoin if we forced their customers to wait 10-60 minutes for their
payments to confirm. Many have inventory management systems which can not
even place items on hold that long.

If full-RBF sees any significant adoption by miners, then it will actively
harm bitcoin adoption by reducing or removing the ability for online or POS
merchants to accept bitcoin payments at all. I do not see a single benefit
to running full-RBF.

FWIW, I'm fine with the first-seen-safe RBF, that seems like a sensible
addition and a good way to allow fees to be added or increased on existing
transactions, without harming existing applications of bitcoin.

Adrian
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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Eric Lombrozo
If we want a non-repudiation mechanism in the protocol, we should explicitly 
define one rather than relying on “prima facie” assumptions. Otherwise, I would 
recommend not relying on the existence of a signed transaction as proof of 
intent to pay…


 On Jun 19, 2015, at 9:36 AM, Matt Whitlock b...@mattwhitlock.name wrote:
 
 On Friday, 19 June 2015, at 3:53 pm, justusranv...@riseup.net wrote:
 I'd also like to note that prima facie doesn't mean always, it means
 that the default assumption, unless proven otherwise.
 
 Why would you automatically assume fraud by default? Shouldn't the null 
 hypothesis be the default? Without any information one way or another, you 
 ought to make *no assumption* about the fraudulence or non-fraudulence of any 
 given double-spend.



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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Matt Whitlock
Even if you could prove intent to pay, this would be almost useless. I can 
sincerely intend to do a lot of things, but this doesn't mean I'll ever 
actually do them.

I am in favor of more zero-confirmation transactions being reversed / 
double-spent. Bitcoin users largely still believe that accepting zero-conf 
transactions is safe, and evidently it's going to take some harsh lessons in 
reality to correct this belief.


On Friday, 19 June 2015, at 9:42 am, Eric Lombrozo wrote:
 If we want a non-repudiation mechanism in the protocol, we should explicitly 
 define one rather than relying on “prima facie” assumptions. Otherwise, I 
 would recommend not relying on the existence of a signed transaction as proof 
 of intent to pay…
 
 
  On Jun 19, 2015, at 9:36 AM, Matt Whitlock b...@mattwhitlock.name wrote:
  
  On Friday, 19 June 2015, at 3:53 pm, justusranv...@riseup.net wrote:
  I'd also like to note that prima facie doesn't mean always, it means
  that the default assumption, unless proven otherwise.
  
  Why would you automatically assume fraud by default? Shouldn't the null 
  hypothesis be the default? Without any information one way or another, you 
  ought to make *no assumption* about the fraudulence or non-fraudulence of 
  any given double-spend.
 

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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Tier Nolan
On Fri, Jun 19, 2015 at 5:42 PM, Eric Lombrozo elombr...@gmail.com wrote:

 If we want a non-repudiation mechanism in the protocol, we should
 explicitly define one rather than relying on “prima facie” assumptions.
 Otherwise, I would recommend not relying on the existence of a signed
 transaction as proof of intent to pay…


Outputs could be marked as locked.  If you are performing a zero
confirmation spend, then the recipient could insist that you flag the
output for them as non-reducible.

This reduces privacy since it would be obvious which output was change.  If
both are locked, then the fee can't be increased.

This would be information that miners could ignore though.

Creating the right incentives is hard though.  Blocks could be
discouraged if they have a double spend that is known about for a while
which reduces payment for a locked output.
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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread justusranvier
-BEGIN PGP SIGNED MESSAGE-
Hash: SHA512

On 2015-06-19 17:50, Jeff Garzik wrote:
 No.  You cannot know which is the 'right' or wrong transaction.  One tx 
 has
 obvious nSequence adjustments, the other - the refund transaction - may 
 not.

I'm still not seeing a case where a node could see conflicting 
transactions on the network as part of a micropayment channel, and not 
know it was observing the resolution of a channel rather than a likely 
retail double spend.

If both transactions have been broadcast, then one of the conflicting 
members of the set will have nSequence adjustments.

Maybe a clever griefer could try to make their retail double spend look 
like a micropayment channel, but it seems like they'd be missing the 
other identifiable markers of that protocol.

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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Jeff Garzik
On Fri, Jun 19, 2015 at 9:44 AM, justusranv...@riseup.net wrote:

 If we have ECDSA proof that an entity intentionally made and publicly
 announced incompatible promises regarding the disposition of particular
 Bitcoins under their control, then why shouldn't that be assumed to be a
 fraud attempt unless shown otherwise?


Making multiple incompatible versions of a spend is a -requirement- of
various refund contract protocols.

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BitPay, Inc.  https://bitpay.com/
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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Jeff Garzik
On Fri, Jun 19, 2015 at 10:48 AM, justusranv...@riseup.net wrote:

 On 2015-06-19 17:40, Jeff Garzik wrote:

 Making multiple incompatible versions of a spend is a -requirement- of
 various refund contract protocols.


 Is there not a dedicated field in a transaction (nSequence) for express
 purpose of indicating when a protocol like this is in use?


No.  You cannot know which is the 'right' or wrong transaction.  One tx has
obvious nSequence adjustments, the other - the refund transaction - may not.

-- 
Jeff Garzik
Bitcoin core developer and open source evangelist
BitPay, Inc.  https://bitpay.com/
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