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Transference Confidence -> 0 Conf Transactions singapore
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Author Topic: Transference Confidence -> 0 Conf Transactions  (Read 2984 times)

chanc3r

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Transference Confidence -> 0 Conf Transactions
« on: May 27, 2014, 08:30:37 pm »

Anyone seen this http://www.cryptocoinsnews.com/news/the-mathematically-secure-way-to-accept-zero-confirmation-transactions/2014/02/13

Does this have any merit for NXT.?

If I understand it the proposition is "I consider this transaction valid and I can see it will be confirmed if it is propagated well - once I know how many nodes have seen it I can trust it without waiting for a confirmation"

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mthcl

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Re: Transference Confidence -> 0 Conf Transactions
« Reply #1 on: May 28, 2014, 05:03:18 pm »

There are some skeptical comments below that article, that seem legitimate to me. So, I'm still not convinced that it would work. I mean, this approach is OK if the nodes behave honestly, but I'm not sure it can survive a carefully prepared attack.
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mczarnek

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Re: Transference Confidence -> 0 Conf Transactions
« Reply #2 on: May 29, 2014, 12:47:07 am »

Here's the attack against it, I as a miner find the hash, I quickly package a transaction and get it instantly confirmed by most of the network.  Simultaneously this block I've been creating would be the one published, everyone would treat the other transaction as the double spend, and I end up with free stuff.

Same thing applies to Nxt.. is it really that big of a deal.. idk.  Odds are it'd be very rare and it's not like anyone is going to accept a 0 confirmation $1 million transaction (probably not even $500), would have to be a concentrated attack most likely.  But you do have a 10, maybe even up to 30 minute window to perform this attack in, so you could double spend in a bunch of places.

Unfortunately this attack applies even more so to Nxt since you can predict who will be forging in the near future, including yourself.

And mining pool operators can do this kind of attack.. in fact, I've been thinking that once Nxt gets instant transaction confirmations, this would be an interesting mining pool to create:
-Users can send extra Bitcoin to an address owned by the mining pool ahead of time.
-Those extra Bitcoin are distributed amongst miners for this pool based upon the percentage of hashing power they are contributing.  This gives them extra incentive to join this pool.
-When someone wants to double spend, they use our software, we prepare the double spend and if we get lucky enough to be the ones to mine a block, they walk away with free stuff.

Given that miners stay anonymous and would be receiving free money for doing this.. might get some people. All you need is 1% of the network and you could probably scare some people.  If nothing else, might be enough to alert some people to this issue.

I'm not talking about enough to scare people away from Bitcoin but enough to make them wary of instant transaction confirmations.  Because if not done now.. might be done later, and if it's an issue.. then better to know now.  Plus we can advertise that Nxt doesn't suffer from this attack :)

Would I actually spend time on this.. probably not but toss the idea out there and someone might.

Is it a huge deal.. probably not but the whole idea is that Bitcoin is trustless.. wouldn't truly trustless Instant Transaction Confirmations be better?  Plus I think we can confirm transactions using the system mthcl and I are dreaming up faster.
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chanc3r

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Re: Transference Confidence -> 0 Conf Transactions
« Reply #3 on: May 29, 2014, 03:30:54 pm »

Thanks Matt, I agree and seen some of the proposals we have, always think its useful to look at the other side and this was the first time I had come across the idea that propagation was a factor in instant transactions, what you are saying is its a compromise for bit coin and a compromise we don't have to make.
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mczarnek

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Re: Transference Confidence -> 0 Conf Transactions
« Reply #4 on: May 30, 2014, 02:42:20 am »

Yup, I appreciate you posting this and always good to think through other proposals.  Thanks.
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Brangdon

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Re: Transference Confidence -> 0 Conf Transactions
« Reply #5 on: July 13, 2014, 11:18:27 am »

this was the first time I had come across the idea that propagation was a factor in instant transactions
I first came across that idea in the paper "Two Bitcoins at the Price of One? Double Spending attacks on Fast Payments in Bitcoin." by Karame and Androulaki at http://eprint.iacr.org/2012/248.pdf, in early 2012. That paper also points out that Bitcoin double-spends would be detected quicker if honest nodes relayed them. (Or rather, just relayed the first attempt, and only if its value is above some (low) threshold, to prevent denial of service attacks. And it should be relayed as an alert to ensure no-one thought the second spend was a real spend.) I don't know of any reason why this idea wasn't adopted; I see the lack of it as another sign Bitcoin development has become moribund.
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mczarnek

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Re: Transference Confidence -> 0 Conf Transactions
« Reply #6 on: July 24, 2014, 06:15:31 pm »

It does seem like it would be a good idea to add something like that.. but it in no way enforces your promise and selfish nodes would still include the transaction that makes them more money via higher transaction fee.  I suspect the percentage of selfish nodes is not trivial and an attacker could still cheat the system too often.
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