[Bitcoin-development] Assurance contracts to fund the network with OP_CHECKLOCKTIMEVERIFY

Tier Nolan tier.nolan at gmail.com
Fri May 8 14:15:05 UTC 2015

Just to clarify the process.

Pledgers create transactions using the following template and broadcast
them.  The p2p protocol could be modified to allow this, or it could be a
separate system.

*Input: 0.01 BTC*


*Output 50BTC*


*Output 0.01BTC*

*Paid to OP_TRUE*
This transaction is invalid, since the inputs don't pay for the output.
The advantage of the sighash "anyone can pay" field is that other people
can add additional inputs without making the signature invalid.  Normally,
any change to the transaction would make a signature invalid.

Eventually, enough other users have added pledges and a valid transaction
can be broadcast.

*Input: 0.01 BTC*


*Input: 1.2 BTCSigned with SIGHASH_ANYONE_CAN_PAY*

*Input: 5 BTCSigned with SIGHASH_ANYONE_CAN_PAY*


*Input: 1.3 BTCSigned with SIGHASH_ANYONE_CAN_PAYOutput 50BTC*

*Output 0.01BTC**Paid to OP_TRUE*

This transaction can be submitted to the main network.  Once it is included
into the blockchain, it is locked in.

In this example, it might be included in block 999,500.  The 0.01BTC output
(and any excess over 50BTC) can be collected by the block 999,500 miner.

The OP_CHECKLOCKTIMEVERIFY opcode means that the 50BTC output cannot be
spent until block 1 million.  Once block 1 million arrives, the output is
completely unprotected.  This means that the miner who mines block 1
million can simply take it, by including his own transaction that sends it
to an address he controls.  It would be irrational to include somebody
else's transaction which spent it.

If by block 999,900, the transaction hasn't been completed (due to not
enough pledgers), the pledgers can spend the coin(s) that they were going
to use for their pledge.  This invalidates those inputs and effectively
withdraws from the pledge.

On Fri, May 8, 2015 at 11:01 AM, Benjamin <benjamin.l.cordes at gmail.com>

> 2. "A merchant wants to cause block number 1 million to effectively
> have a minting fee of 50BTC." - why should he do that? That's the
> entire tragedy of the commons problem, no?

No, the pledger is saying that he will only pay 0.01BTC if the miner gets a
reward of 50BTC.

Imagine a group of 1000 people who want to make a donation of 50BTC to
something.  They all way that they will donate 0.05BTC, but only if
everyone else donates.

It still isn't perfect.  Everyone has an incentive to wait until the last
minute to pledge.
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