Good morning Nadav, Indeed.
It seems to me that practical deployments of statechains requires the statechain operator to be a trusted federation, possibly a k-of-n. This is slightly better than a federated sidechain because the money can always be reclaimed on the blockchain layer very quickly in case of a loss of trust in the federation. If the k-of-n is arranged in such a way that the signers can be identified (such as by use of old `OP_CHECKMULTISIG` or some combination of the proposed `OP_CHECKSIGADD`) then it has the same "auditability", i.e. you can identify the pseudonyms of the members who cheated (which is not worth much, as getting a new pseudonym is trivial). It is helpful to remember that a k-of-n federation can only be trusted if you have full trust in at least (n - k + 1) members of the federation. Regards, ZmnSCPxj > Hey all, > > So my main concern with the proposal as written is that the Statechain Entity > (SE) can untraceably scam its users with the following attack: > 1) Buy the utxo (have it transferred to a key it knows), this first step can > be skipped if the utxo was created by the SE. > 2) Transfer the UTXO to someone else, let it be for however long > 3) When it wishes to steal the UTXO, the SE now knows its own shard s_n and > it knows the full private key, x, from when it owned the UTXO (and had both > shards), and so it can compute x/s_n = the current users shard. It can then > sign for the current user, and forge a state transition to a key it owns > before spending the UTXO on chain. > > The main problem here is that the user who had their funds stolen cannot > prove to anyone that this has happened since the attack compromises their key. > That said, I think this problem is easily fixed by adding a new user key to > the protocol with which they must sign in order for the transfer to be > considered valid on the state chain. This way, if the SE wishes to steal the > funds (which they still can), at least it is traceable/provable that this SE > is not trustworthy as there is no evidence of a valid transfer for the funds > that have been stolen. > > Best, > Nadav > > On Thu, Apr 2, 2020 at 7:22 PM Tom Trevethan via bitcoin-dev > <bitcoin-dev@lists.linuxfoundation.org> wrote: > > > Thanks for all of the input and comments - I do now think that the > > decrementing nSequence relative locktime backup system with kick-off > > transaction is the way to go, including a fee penalty via CPFP to > > disincentivise DoS, as suggested. > > I have started a more detailed document specifying the proposed protocol in > > more detail: > > https://github.com/commerceblock/mercury/blob/master/statechains.md which > > includes improvements to the transfer mechanism (and an explanation of how > > this can be used to transfer/novate positions in DLCs). Always happy to get > > more feedback or PRs. > > > > Tom > > > > On Tue, Mar 31, 2020 at 12:41 PM Tom Trevethan <t...@commerceblock.com> > > wrote: > > > > > Hi David, > > > > > > Just for clarity, I left nChain over 2 years ago (having worked there > > > since 2016). While there, I (along with other researchers) were given > > > free rein to work on any ideas we wanted to. I had been interested in the > > > scaling of Bitcoin off-chain, and this was one of several things I spent > > > time on (including things like sidechains, pegs and threshold > > > signatures). This patent application came out of an idea I had to > > > transfer ownership of UTXOs off-chain that has some similarities to the > > > statechains proposal, which has shown there is interest and demand for > > > this type of system. > > > > > > Although I think the existence of this application is something to be > > > mindful of, there are several important things to note: > > > > > > 1. Although there are similarities, the current ideas are significantly > > > different to those in the application. > > > 2. The key transfer protocol as described in the application is not > > > secure (for several reasons, including as discussed above, by Albert and > > > Bob etc.) - and a different mechanism is required. > > > 3. Decrementing timelocks (as suggested in the application) are prior art > > > (Decker-Wattenhofer 2015), and in any case any implementation will most > > > likely use an 'invalidation tree' relative locktime backup mechanism for > > > open-ended UTXOs. > > > 4. The patent application has not been granted (it was made in May 2017) > > > and the international search report rejected it on the grounds of prior > > > art. > > > > > > Tom > > > > > > On Tue, Mar 31, 2020 at 11:36 AM David A. Harding <d...@dtrt.org> wrote: > > > > > > > On Wed, Mar 25, 2020 at 01:52:10PM +0000, Tom Trevethan via bitcoin-dev > > > > wrote: > > > > > Hi all, > > > > > > > > > > We are starting to work on an implementation of the statechains > > > > > concept ( > > > > > https://medium.com/@RubenSomsen/statechains-non-custodial-off-chain-bitcoin-transfer-1ae4845a4a39), > > > > > > > > > > [...] > > > > > There are two main modifications we are looking at: > > > > > [...] > > > > > > > > > > 2. Replacing the 2-of-2 multisig output (paying to statechain entity > > > > > SE key > > > > > and transitory key) with a single P2(W)PKH output where the public key > > > > > shared between the SE and the current owner. The SE and the current > > > > > owner > > > > > can then sign with a 2-of-2 ECDSA MPC. > > > > > > > > Dr. Trevethan, > > > > > > > > Would you be able to explain how your proposal to use statechains with > > > > 2P-ECDSA relates to your patent assigned to nChain Holdings for "Secure > > > > off-chain blockchain transactions"?[1] > > > > > > > > [1] https://patents.google.com/patent/US20200074464A1 > > > > > > > > Here are some excerpts from the application that caught my attention in > > > > the context of statechains in general and your proposal to this list in > > > > particular: > > > > > > > > > an exchange platform that is trusted to implement and operate the > > > > > transaction protocol, without requiring an on-chain transaction. The > > > > > off-chain transactions enable one computer system to generate multiple > > > > > transactions that are recordable to a blockchain in different > > > > > circumstances > > > > > > > > > > [...] > > > > > > > > > > at least some of the off-chain transactions are valid for recording on > > > > > the blockchain even in the event of a catastrophic failure of the > > > > > exchange (e.g., exchange going permanently off-line or loosing key > > > > > shares). > > > > > > > > > > [...] > > > > > > > > > > there may be provided a computer readable storage medium including a > > > > > two-party elliptic curve digital signature algorithm (two-party ECDSA) > > > > > script comprising computer executable instructions which, when > > > > > executed, configure a processor to perform functions of a two-party > > > > > elliptic curve digital signature algorithm described herein. > > > > > > > > > > [...] > > > > > > > > > > In this instance the malicious actor would then also have to collude > > > > > with a previous owner of the funds to recreate the full key. Because > > > > > an attack requires either the simultaneous theft of both exchange and > > > > > depositor keys or collusion with previous legitimate owners of funds, > > > > > the opportunities for a malicious attacker to compromise the exchange > > > > > platform are limited. > > > > > > > > Thank you, > > > > > > > > -Dave > > > > _______________________________________________ > > bitcoin-dev mailing list > > bitcoin-dev@lists.linuxfoundation.org > > https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev _______________________________________________ bitcoin-dev mailing list bitcoin-dev@lists.linuxfoundation.org https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev
