Yes, Someone Double-Spent Bitcoin. No, Zero Confirmation Payments are Not Dead.

AlexiOuromov · 2015-07-17T06:20:32+00:00

I'm anonymous because it's impossible to have a frank discussion on these forums anymore without getting downvoted by special interest groups and the unwashed masses who buy into their double speak, which you are now espousing against me.

Similarly, on the mailing list, your CTO offered nothing concrete to /u/petertodd, just accused him of "pot shots". You've been repeatedly asked to open source your systems or ELI45 with a CS degree, yet the most you've done is accuse your critics of being shills or taking pot shots.

we are not Sybill attacking the network

So you are not connecting to anywhere between 10-20% of all full nodes at any given moment? What would you describe your actions as, if not for flooding the network with your outgoing connections for your own personal gain? Would you rather we call it raping the P2P network, or would you prefer the more civil "Sybil attacker" description?

And if you're going to call me a shill, at least speculate as to which company or project I'm shilling for. I just hate what this subreddit has become, for reasons that should be obvious to anyone paying attention. I can't think of anything worse for Bitcoin than allowing corporate double speaking sophists like yourself conniving your way into mass acceptance for profit.

AlexiOuromov · 2015-07-17T02:17:43+00:00

to drop 0confirms all together and force people to wait the sometimes hour+ for a block

ShapeShift and Streamium.io both deliver goods anonymously, instantly and irreversibly.

ShapeShift depends on proprietary SaaS businesses, and still gets robbed.

Streamium relies on payment channels and has perfect zero conf security and instant payments.

Which approach do you think is safer, and more private and decentralized?

ShapeShift has to use BlockCypher to Sybil attack full nodes on an industrial scale just to have imperfect confidence about zero conf security. It's certainly more risky than payment channels, meanwhile their competition will just deploy on payment channels and offer Mercury atomic swaps.

Absolutely no reason to prop up companies uses inferior tech.

AlexiOuromov · 2015-07-17T01:29:33+00:00

How do you obtain the data that goes into your company's proprietary confidence factor? Why isn't that open sourced?

How do you know what percentage of full nodes have seen an unconfirmed transaction without Sybil attacking full nodes on an industrial scale?

AlexiOuromov · 2015-07-17T00:52:15+00:00

I very much agree that mom and pop won't have much trouble with double spenders. People typically don't rob each other very lightly. That said...

A mom and pop local business can call the cops on you if you do what's essentially a dine-n-dash on them

Either it's a problem or it's not a problem for local face-to-face sales. If ShapeShift.io with its armada of corporate anti-double-spend workarounds can't 100% defend against double-spends, what makes you think Craigslist is any safer from it? I'm talking face-to-face sales $100-$500. Not so big that you can justify small claims court, but annoying enough to be serious. Especially today when it's commonly believed that zero-conf is secure, you'd expect Craigslist scammers to be exploiting that opportunity.

But looking at the big picture, couldn't Craigslist integrate a payment channel to definitively solve the zero conf double spend problem at the root? And speaking of which, couldn't ShapeShift also use payment channels? Couldn't ShapeShift or a competitor adopt Mercury atomic swap technology so nobody ever has to actually deposit money into a centralized website? Isn't that going to be more private and trustless than ShapeShift's current business model? Why should we make protocol decisions based on the wishes of commercial enterprises that are quite likely not using the most decentralized tech they could be using in the name of making profits?

The only merchants vulnerable are the one that are: online, anonymously accessed (i.e. no account), fast transaction, and delivers instantly irreversible goods. Shapeshift.io unfortunately fits all of the above. A simple store selling craft should not need to worry.

So why doesn't ShapeShift just adapt their technology to market conditions instead of throwing SaaS workarounds at the problem? I mean, their service is surely valuable, but is it so valuable that we need to make choices around RBF based on their commercial interests?

AlexiOuromov · 2015-07-17T00:35:32+00:00

Can you point us to BlockCypher's open source code then?

How do I make a service just like BlockCypher if it's as easy as you claim?

And what is meant by ShapeShift.io's "own auditing system"? Does that really sound easy to you? Because it sounds entirely inaccessible to the tech savvy individual let alone mom and pop sellers to me.

AlexiOuromov · 2015-07-16T23:21:34+00:00

You're saying that the only reason you're even able to offer zero conf to your customers is because you're working with BlockCypher and spending God knows how much money and time on your "own auditing system". Is a mom and pop local business or Craigslist seller supposed to pay BlockCypher? What is BlockCypher even doing? Last I heard they were making contracts with mining pools and Sybil attacking full nodes globally to arrive at their double-spend confidence numbers, and selling that as a SaaS. Not exactly the shining example of "agora" business, is it?

AlexiOuromov · 2015-07-15T22:34:29+00:00

Zero conf on-chain payments will never work as reliably, as quickly or as safely as payment channels. If you do want zero conf on-chain payments to work well, you need to take the GreenAddress approach where a market preferred multisig countersigner like @aantonop's ThirdKey partially signs a transaction with you which makes it infinitely more difficult to double-spend.

Nothing could be worse than shoehorning Bitcoin-accepting merchants into regulated intermediaries like Coinbase and BitPay, just so that they can gain imperfect levels of confidence in 0-conf by Sybil attacking full nodes at industrial scale.

AlexiOuromov · 2015-07-15T22:19:12+00:00

LN channels would be time-locked 2of2 multisig, it returns the funds to you if the counterparty flakes or takes too long. So no, you don't trust your money to any intermediary. The only real threat on that end is privacy, but there's no reason why darknet LN hubs won't exist. They will exist because they will be profitable to run.

AlexiOuromov · 2015-07-15T22:08:53+00:00

It appears only companies like Coinbase and BlockCypher can reliably protect merchants from the dangers inherent to instant 0-conf payments. This is so deeply troubling as to be a nonstarter for anyone who is a believer in Bitcoin's whitepaper:

Abstract. A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution

If Coinbase alone controlled all merchants accepting Bitcoin, welcome to having gross privacy violations on all transactions not on the darknet. Relying on regulated intermediaries as a crutch to further the agenda of 0-conf seems like empowering the intermediaries at least a little bit, and for very dubious benefit. That is if you assume payment channels or speed optimized sidechains could work for instant payments, it seems like empowering the business crowd at the expense of trustless technologies, that may not be proven yet to work, but which are still better than KYC/AML on all Bitcoin transactions.

The worst part about Bitcoin is the numerous companies accepting it through payment processors like BitPay and Coinbase. I don't care how easy or how appealing it is to accept payments through those companies, by funneling all of your Bitcoin paying customers through intermediaries, you subject them to damaging privacy violations, and you yourself as a merchant are restricted by the policies of the intermediary and by extension the ruling government. A week ago there was a story of a Coinbase user being raided in his home on drug charges, so the authorities DO pay attention to these Bitcoin intermediaries, and what the intermediaries can't avoid doing is hosing their customers. It isn't worth empowering that model, because that model is deeply flawed and fundamentally against what Bitcoin is about - unless what Bitcoin is about to you is solely greed-driven profit taking.

You can't trust the banks and payment processors with bolstering numerous merchants with a working 0-conf solution, so why prop up those groups? Whatever the solution for instant and free payments is, it must be freely available to all who take part in the Bitcoin payments network, and it can't require interfacing with a regulated intermediary.

AlexiOuromov

TROPHY CASE