[Bitcoin-development] Coinbase reallocation to discourage Finney attacks

Christophe Biocca christophe.biocca at gmail.com
Thu Apr 24 14:47:35 UTC 2014

Actually Peter, coinbase confiscations are a much worse mechanism for
enforcement of widespread censorship rules than simple orphaning. They
lose their power when the transaction miners are punished for can
build up over time without losing their usefulness:

Assume a world where 75% of the hashpower is coerced into
stealing/burning the coinbases of miners who allow transactions to and
from a particular set of addresses (the actual rule isn't that
important). Then the following would be a rational behaviour from the
remaining 25%:

- Mine according to the enforced rules most of the time.
- Accept banned transactions paying you with an output (no real
miners' fees) and keep them in an ever-accumulating pool.
- When there's so much of those to make it worth your while, mine a
block filled with them.

If miners don't orphan your block, you made money. They can't
retaliate further, because you can publish the block anonymously, not
tying it to your previous identity. Hell, some of the 75% might be
able to do the same right under the authorities' noses (it would be
really hard to spot by an external observer).

Note that I, banned user, can submit to all these non-enforcing miners
at once (with a different fee txout for each). I get a severe
degradation of service, especially if I'm part of an extremely small
minority, but ultimately as long as a single miner can accumulate
enough transactions with enough fees, I'll eventually get through.

Of course, in such a dystopian future, orphaning would be the
enforcement mechanism. It would be stupid to rely on coinbase
reallocation/burning to do this task when the existing tools work so
much better.

What's interesting is that this mechanism is especially tailored to
blocking time sensitive transactions (that need to be confirmed
now/soon, or are worthless), such that their total out-of-band fees
can't build up over time. Double spending is one such category. I'm at
a loss to come up with something else, but maybe someone has a good

On Thu, Apr 24, 2014 at 10:09 AM, Mike Hearn <mike at plan99.net> wrote:
>> Like I said before, that leads to the obvious next step of
>> deleting/stealing their coinbases if they don't identify themselves.
> And as I said before, that's a huge leap. A majority of miners deciding
> double spending needs tougher enforcement doesn't imply they also think all
> miners should identify themselves. Those are unrelated things.
> This kind of totally unsupported "obvious next step" argument can be applied
> to any proposal in any walk of life. We developed SPV clients? The obvious
> next step is that miners have to stop being anonymous. We developed floating
> fees? The obvious next step is that miners have to stop being anonymous. The
> prior arguments sound absurd exactly because they're not obvious or even
> logical - same as this.
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