From: Tamas Blummer <tamas.blummer@gmail.com>
Message-Id: <FC1E77CA-929C-40E1-A80E-ADC1CBD65A6E@gmail.com>
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Date: Thu, 23 May 2019 21:54:43 +0200
In-Reply-To: <09724852-6971-4E5A-AAB5-3FBAEEA1D995@gmail.com>
To: Nathan Cook <nathan.cook@gmail.com>
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Cc: Bitcoin Protocol Discussion <bitcoin-dev@lists.linuxfoundation.org>
Subject: Re: [bitcoin-dev] OP_DIFFICULTY to enable difficulty hedges (bets)
 without an oracle and 3rd party.
Precedence: list


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Block hash can suggest much higher difficulty than what is in effect, so =
OP_CHECKBLOCKATHEIGHT would not work to decide if difficulty is above =
the level of the bet.

> On May 23, 2019, at 21:45, Tamas Blummer <tamas.blummer@gmail.com> =
wrote:
>=20
> I see. The uncompressing needs to be done either to compare. How are =
chances for that BIP?
>=20
> This BIP would be explicitly offering risk managment of miners biggest =
risk.
> Doing so without relying on external markets or oracle, self =
cointained would be an impressive and adequate feature.
>=20
> Tamas Blummer
>=20
>> On May 23, 2019, at 21:21, Nathan Cook <nathan.cook@gmail.com> wrote:
>>=20
>> It's true that it fetches the block hash; the idea is to compare the =
block hash's numeric value to the desired (uncompressed) difficulty =
directly, using a 256-bit version of OP_LESSTHAN.
>>=20
>> Nathan Cook
>>=20
>>=20
>> On Thu, 23 May 2019 at 22:18, Tamas Blummer <tamas.blummer@gmail.com> =
wrote:
>> That opcode would not help as it fetches block hash and not the =
content of the header.
>>=20
>>> On May 23, 2019, at 21:05, Nathan Cook <nathan.cook@gmail.com> =
wrote:
>>>=20
>>> You can get the same effect with OP_CHECKBLOCKATHEIGHT as proposed =
by Luke Dashjr =
(https://github.com/luke-jr/bips/blob/bip-cbah/bip-cbah.mediawiki) if =
you also re-enable/extend certain opcodes like OP_AND and OP_LESSTHAN. =
See =
https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2016-September/013=
149.html and the ensuing thread.
>>>=20
>>> Nathan Cook
>>>=20
>>>=20
>>> On Thu, 23 May 2019 at 21:33, Tamas Blummer via bitcoin-dev =
<bitcoin-dev@lists.linuxfoundation.org> wrote:
>>> Difficulty change has profound impact on miner=E2=80=99s 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.
>>>=20
>>> I think we could do much better than them natively within Bitcoin.
>>>=20
>>> 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.
>>>=20
>>> Once signed by both the transaction would not carry any counterparty =
risk and would not need an oracle to settle according to the bet.
>>>=20
>>> 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=E2=80=99s aim not to introduce 3rd party to do so.
>>>=20
>>> Do you see a fault in this proposal or want to contribute?
>>>=20
>>> Tamas Blummer
>>>=20
>>> _______________________________________________
>>> bitcoin-dev mailing list
>>> bitcoin-dev@lists.linuxfoundation.org
>>> https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev
>>=20
>=20


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