[bitcoin-dev] OP_DIFFICULTY to enable difficulty hedges (bets) without an oracle and 3rd party.
jl2012 at xbt.hk
Fri May 24 08:15:45 UTC 2019
A gamble like this, decentralised or not, is easy to manipulate since difficulty is determined entirely by the last block in a cycle
> On 24 May 2019, at 1:42 AM, Tamas Blummer via bitcoin-dev <bitcoin-dev at lists.linuxfoundation.org> wrote:
> Difficulty change has profound impact on miner’s production thereby introduce the biggest risk while considering an investment.
> Commodity markets offer futures and options to hedge risks on traditional trading venues. Some might soon list difficulty futures.
> I think we could do much better than them natively within Bitcoin.
> A better solution could be a transaction that uses nLocktime denominated in block height, such that it is valid after the difficulty adjusted block in the future.
> A new OP_DIFFICULTY opcode would put onto stack the value of difficulty for the block the transaction is included into.
> The output script may then decide comparing that value with a strike which key can spend it.
> The input of the transaction would be a multi-sig escrow of those who entered the bet.
> The winner would broadcast.
> Once signed by both the transaction would not carry any counterparty risk and would not need an oracle to settle according to the bet.
> I plan to draft a BIP for this as I think this opcode would serve significant economic interest of Bitcoin economy, and is compatible with Bitcoin’s aim not to introduce 3rd party to do so.
> Do you see a fault in this proposal or want to contribute?
> Tamas Blummer
> bitcoin-dev mailing list
> bitcoin-dev at lists.linuxfoundation.org
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