Date: Wed, 13 Sep 2017 05:24:34 -0400
From: Peter Todd <pete@petertodd.org>
To: Jorge =?iso-8859-1?Q?Tim=F3n?= <jtimon@jtimon.cc>
Message-ID: <20170913092434.GA1094@savin.petertodd.org>
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	<20170907180014.GA13727@fedora-23-dvm>
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Cc: Bitcoin Protocol Discussion <bitcoin-dev@lists.linuxfoundation.org>
Subject: Re: [bitcoin-dev] SF proposal: prohibit unspendable outputs with
 amount=0
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On Sat, Sep 09, 2017 at 11:11:57PM +0200, Jorge Tim=F3n wrote:
> Tier Nolan, right, a new tx version would be required.
>=20
> I have to look deeper into the CT as sf proposal.
>=20
> What futures upgrades could this conflict with it's precisely the
> question here. So that vague statement without providing any example
> it's not very valuable.

So with Confidential Transactions, the only thing that's changed relative t=
o a
normal Bitcoin transaction is that fact that the sum of input values is >=
=3D the
sum of output values is proven via a CT proof, rather than revealing the ac=
tual
sums. Other than that, CT transactions don't need to be any different from
regular transactions.

For CT to be a softfork, we have to ensure that each CT transaction's sum of
inputs and outputs is valid. An obvious way to do this is to have a pool of
"shielded" outputs, whose total value is the sum of all CT-protected output=
s.
Outputs in this pool would appear to be anyone-can-spend outputs to pre-CT
nodes.

This gives us three main cases:

1) Spending unshielded outputs to CT-shielded outputs

Since the CT-shielded output's value is unknown, we can simply set their va=
lue
to zero. Secondly, we will add the newly CT-shielded value to the pool with=
 an
additional output whose value is the sum of all newly created CT-shielded
outputs.


2) Spending CT-shielded outputs to unshielded outputs

Here one or more CT-shielded outputs will be spent. Since their value is ze=
ro,
we make up the difference by spending one or more outputs from the CT pool,
with the change - if any - assigned to a CT-pool output.


3) Spending CT-shielded outputs to CT-shielded outputs

Since both the inputs and outputs are zero-valued, to pre-CT nodes the
transaction is perfectly valid: the sum of coins spent is 0 BTC, and the su=
m of
coins created is also 0 BTC. We do have the problem of paying miners fees, =
but
that could be done with an additional CT output that the miner can spend, a
child-pays-for-parent transaction, or something else entirely that I haven't
thought of.


> Although TXO commitments are interesting, I don't think they make UTXO
> growth a "non-issue" and I also don't think they justify not doing
> this.
>=20
> Yeah, the costs for spammers are very small and doesn't really improve
> things all that much, as acknowledged in the initial post.

Suppose zero-valued outputs are prohibited. In case #3 above, if there are =
more
outputs than inputs, we need to add an additional input from the CT-shielded
pool to make up the difference, and an additional change output back to the
CT-shielded pool.

If shielded-to-shielded transactions are common, these extra outputs could
consume a significant % of the total blockchain space - that's a significant
cost. Meanwhile the benefit is so small it's essentially theoretical: an
additional satoshi per output is an almost trivial cost to an attacker.

Quite simply, I just don't think the cost-benefit tradeoff of what you're
proposing makes sense.

--=20
https://petertodd.org 'peter'[:-1]@petertodd.org

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