Praveen Baratam [ARCHIVE] / is on Nostr

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🗓️ Active from 2017-11-20 to 2019-08-13
💬 Posted a total of 10 messages
📚 Participated in the following categories: bitcoin-dev, Lightning-dev
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Last Notes

2023-06-09 12:51:08

- reply

📅 Original date posted:2018-07-03
📝 Original message:
Thank you for the detailed explanation! ☺
ᐧ
On Fri, Jun 29, 2018 at 8:25 AM ZmnSCPxj <ZmnSCPxj at protonmail.com> wrote:
> Good morning Praveen,
>
> The patent system, has intent, that the inventor will completely reveal
> the design of the invention, in exchange for a (time-bound) state monopoly
> on the construction and sale of the invention. The intent, is that the
> inventor is compensated for the toil in creating the invention, while the
> revealed design may help future inventors to consider, an improved
> designed, after the granted monopoly has ended.
>
> Thus, the patent system, has the concept, "prior art".
>
> If the item being patented, is in the past ("prior") already known among
> practitioners ("art"), then there is no need for the state to "pay for"
> revealing the design by granting a monopoly. Already, the design is
> revealed and known, so why should the state pay the inventor with a
> state-enforced monopoly?
>
> Importantly, any evidence, that the design of the invention is known, is
> prior art. This includes publications made by the inventor himself or
> herself. It is prior art since the fact of publication indicates that
> other practitioners now know of the art of the new design.
>
> Another consideration, is the "grace period".
>
> An inventor may publish, the design of the invention, at some past point,
> and then file for a patent afterward. However, the fact of the
> publication, even initiated by the inventor, is itself prior art, and is
> evidence that the invention is known (and that the state must, logically,
> not pay for it by enforcing a patent-backed monopoly).
>
> Of course, an inventor may publish an invention with intent to patent it
> later. Thus, the state allows, a grace period, after the inventor publishes
> the design, to patent the design. Importantly, this grace period is not of
> unlimited duration. The de facto global state government, the USA,
> provides a grace period of 1 year only.
>
> For reference, the Poon-Dryja whitepaper for Lightning was published in
> 2016, and the current year is now known to be 2018.
>
> As the current Lightning design is designed publicly and continuously
> published in the lightning-rfc (thus a continuous evidence that the design
> of Lightning is already known), and is in any case based on the prior-art
> Poon-Dryja paper, and neither Poon nor Dryja have applied for patents of
> the Lightning design within a year of publication of the Poon-Dryja paper,
> then the state will not bother to grant a patent to the inventors of
> Lightning.
>
> (the above describes the ideal operation of patent systems. it should be
> noted, that agents operating patent systems are known to run on cognitive
> substrates that are highly amenable to external corrupting influences, and
> thus non-ideal operation may occur in practice.)
>
> Regards,
> ZmnSCPxj
>
>
> Sent with ProtonMail <https://protonmail.com> Secure Email.
>
> ‐‐‐‐‐‐‐ Original Message ‐‐‐‐‐‐‐
> On June 22, 2018 11:21 PM, Praveen Baratam <praveen.baratam at gmail.com>
> wrote:
>
> Hello everybody,
>
> I just heard from a friend that Second Level Protocols such as Lightening
> Network can be patented if the author/inventor chooses to!
>
> Is it possible? Am I missing something?
>
> Best,
>
> Praveen Baratam
>
> about.me <http://about.me/praveen.baratam>
> ᐧ
>
>
>
--
Dr. Praveen Baratam
about.me <http://about.me/praveen.baratam>
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2023-06-09 12:50:55

- reply

📅 Original date posted:2018-06-22
📝 Original message:
Hello everybody,
I just heard from a friend that Second Level Protocols such as Lightening
Network can be patented if the author/inventor chooses to!
Is it possible? Am I missing something?
Best,
Praveen Baratam
about.me <http://about.me/praveen.baratam>
ᐧ
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2023-06-09 12:48:21

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📅 Original date posted:2018-01-02
📝 Original message:
Which is the most mature Lightning implementation right now? I want to
setup a lightning node and start experimenting with it.
Also did anybody create a protocol diagram of how lightning works? (similar
to the one below about SSL)
[image: Inline image 1]
I have seen higher level diagrams but as evident from my previous mails,
they only touch the basic concepts and not the exact flow of events leaving
many doubts. It would be really helpful to make such a detailed
flowchart/diagram if one does not exist already.
Also, what are the current limitations/known-gaps in lightening network
protocol? When can its guarantees fail?
ᐧ
On Tue, Jan 2, 2018 at 8:13 PM, Johan Torås Halseth <johanth at gmail.com>
wrote:
> That’s correct :)
>
> On Tue, Jan 2, 2018 at 15:34, Praveen Baratam <praveen.baratam at gmail.com>
> wrote:
>
> Thank you for explaining @Hafeez & @Johan
>
> Now that all the BIPs necessary for LN including SegWit (Softfork) are
> active on the mainnet, are we just waiting for the LN implementation to
> mature or are there any other issues?
> ᐧ
>
> On Tue, Jan 2, 2018 at 8:01 PM, Johan Torås Halseth <johanth at gmail.com>
> wrote:
>
>> Hi,
>>
>> Before you can safely broadcast the funding transaction, the two parties
>> involved in a channel must have signed a commitment transaction spending
>> the output from the funding transaction. Without segwit, the funding
>> transaction can be malleated, leaving the commitment transaction invalid,
>> and funds locked up if one of the parties stops cooperating.
>>
>> Cheers,
>> Johan
>> On Tue, Jan 2, 2018 at 15:11, Hafeez Bana <hafeez.bana at gmail.com> wrote:
>>
>> to fix transaction malleability
>>
>> On Tue, Jan 2, 2018 at 1:53 PM, Praveen Baratam <
>> praveen.baratam at gmail.com> wrote:
>>
>>> Why is SegWit required for LN? If we wait for the *funding transaction*
>>> to be *confirmed*, we can then safely create and update unconfirmed
>>> commitment transactions...
>>>
>>> I don't see how SegWit is important here... Am I missing something?
>>>
>>> --
>>> Dr. Praveen Baratam
>>>
>>> about.me <http://about.me/praveen.baratam>
>>> ᐧ
>>>
>>> _______________________________________________
>>> Lightning-dev mailing list
>>> Lightning-dev at lists.linuxfoundation.org
>>> https://lists.linuxfoundation.org/mailman/listinfo/lightning-dev
>>>
>>>
>>
>> _______________________________________________ Lightning-dev mailing
>> list Lightning-dev at lists.linuxfoundation.org
>> https://lists.linuxfoundation.org/mailman/listinfo/lightning-dev
>>
>>
>
>
> --
> Dr. Praveen Baratam
>
> about.me <http://about.me/praveen.baratam>
>
>
--
Dr. Praveen Baratam
about.me <http://about.me/praveen.baratam>
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2023-06-09 12:48:20

- reply

📅 Original date posted:2018-01-02
📝 Original message:
Why is SegWit required for LN? If we wait for the *funding transaction* to
be *confirmed*, we can then safely create and update unconfirmed commitment
transactions...
I don't see how SegWit is important here... Am I missing something?
--
Dr. Praveen Baratam
about.me <http://about.me/praveen.baratam>
ᐧ
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2023-06-07 18:20:09

- reply

📅 Original date posted:2019-08-12
📝 Original message:Bryan,
This is very similar to *CoinVault - Secure Depository and Secure Exchange*
technologies that I have shared with you all.
ᐧ
On Wed, Aug 7, 2019 at 7:23 PM Bryan Bishop via bitcoin-dev <
bitcoin-dev at lists.linuxfoundation.org> wrote:
> Hi,
>
> I have a proposal for implementing bitcoin vaults in a way that does not
> require any soft-forks or other software upgrades, although it could
> benefit
> from SIGHASH_NOINPUT which I'll describe later.
>
> I call them pre-signed vaults.
>
> Vault definition
> ================
>
> Here, a vault is defined as a transaction setup scheme that binds both the
> user
> and the attacker to always using a public observation and delay period
> before a
> weakly-secured hot key is allowed to arbitrarily spend coins. This is the
> same
> definition previously used[1]. During the delay period, there is an
> opportunity
> to initiate recovery/clawback which can either trigger deeper cold storage
> parameters or at least reset the delay period to start over again for the
> same
> keys.
>
> One of the important components of this is the delete-the-key pre-signed
> transaction concept, where only a single transaction is (pre)signed before
> deleting the key. This is basically an emulation of a covenant and
> enforces a
> certain outcome.
>
> Background and motivation
> =========================
>
> I was looking at Eyal and Sirer's 2016 vaults paper [1], and I saw this
> headscratcher:
>
> > Vault transactions use a delay mechanism. We note that vault transactions
> > cannot be implemented with existing timing mechanisms such as
> > CHECKLOCKTIMEVERIFY opcode or transaction locktime.
>
> This was probably written before the introduction of
> OP_CHECKSEQUENCEVERIFY.
> Still, a viable construction would have more steps than just using OP_CSV.
> They
> were probably not thinking about what those steps might be, because in the
> context of the paper they were proposing a bitcoin vault implemented using
> recursive consensus-enforced covenants via a new opcode, which obviously
> cannot
> be deployed without an upgrade fork. Covenants have been discussed for
> years,
> but require new opcodes or other consensus-enforcement changes.
>
> Relative locktimes are useful here because there is no knowledge as to
> when the
> transactions might be broadcasted in the future. The delays need to be
> relative
> to after the transaction is included in the blockchain, not to setup
> initialization time.
>
> Also, from [2]:
>
> > We show that a [vault transaction] mechanism is currently not possible
> in all
> > cryptocurrencies [...] Bitcoin's scripting language requires support for
> > covenants.
>
> I haven't seen any previous proposal for how to implement recursive bitcoin
> vaults without a fork and without a covenant. After asking around, I am
> pretty
> sure this is somewhat novel. The closest I guess is [3].
>
> Vaults are particularly interesting as a bitcoin cold storage security
> mechanism because they enable a publicly observable delay period during
> which
> time a user could be alerted by a watchtower that a thief might be in the
> process of stealing their coins, and then the user may take some actions to
> place the coins back into the vault before the relative timelock expires.
> There
> seems to be no way to get this notification or observation period without a
> vault construction. It might have been assumed it required a covenant.
>
> Having a vault construction might go a long way to discourage would-be
> attackers, on principle that the attacker might be incapable of recovering
> their cost-of-attack because the recovery mechanism can lock up the coins
> indefinitely. Griefing or denial-of-service would still be possible, of
> course,
> but with multisig there might be some ways to put a halt to that as well.
> I am
> working under the assumption that the attacker knows that the user is a
> vault
> user.
>
> Vaults
> ======
>
> The idea is to have a sequence of pre-generated pre-signed transactions
> that
> are generated in a certain way. The basic components are a vaulting
> transaction
> that locks coins into a vault, a delayed-spend transaction which is the
> only
> way to spend from a vault, and a re-vaulting transaction which can
> recover/clawback coins from the delayed-spend transaction. The security of
> this
> scheme is enforced by pre-signing transactions and deleting private keys,
> or
> with the help of SIGHASH_NOINPUT then there's another scheme where private
> keys
> are provably never known. This enforces that there's only a specific set of
> possible outcomes at every step of the vault.
>
> Some examples of what the set of broadcasted transactions might look like
> in
> regular usage:
>
> coins -> VT -> DST -> exit via hot wallet key
> coins -> VT -> DST -> RVT
> coins -> VT -> DST -> RVT -> DST -> ...
> coins -> VT -> ... -> RVT998 -> nuclear abort
>
> where:
> VT = vault transaction
> DST = delayed-spend transaction
> RVT = re-vaulting transaction
>
> The delayed-spending transaction would have a single output with a script
> like:
> (
> 30 days AND hot wallet key
> OR 10 days AND re-vaulting public key
> OR 1 day AND 4-of-7 multisig
> OR 0 days and super-secure nuclear abort ragequit key
> )
>
> Another diagram:
>
> VT_100 -> DST -> (optionally) RVT -> coins are now in VT_99
> VT_99 -> DST -> (optionally) RVT -> coins are now in VT_98
> ...
> VT_1 -> burn-all-coins nuclear abort ragequit (final)
>
> Definitions
> ===========
>
> Transactions and components:
>
> * Commitment/funding vault setup transaction. Signed after setting up the
> transaction tree, and it is broadcasted whenever funds are to be placed
> into
> the vault.
>
> * Delayed-spend transaction. Signed during the vault transaction tree
> setup,
> and it is broadcasted when the user wants to withdraw coins from cold
> storage
> or otherwise manipulate the coins. The output script template used by the
> delayed-spend transaction was defined earlier.
>
> * Hot wallet key: Somewhat insecure key. This can also be multisig using
> multiple hot keys.
>
> * Re-vaulting key: It is important to note that the private key either
> never
> existed (SIGHASH_NOINPUT + P2WPK for the re-vaulting transaction) or the
> private key was deleted after pre-signing the re-vaulting transaction.
>
> * 4-of-7 multisig: This is a group of differently-motivated individuals
> who are
> responsible for signing transactions. This multisig group is not necessry
> to
> describe the technique, I just think it's a useful feature for a vault to
> include.
>
> * Nuclear abort key: Also unnecessary. This is a key for which only a
> single
> signed transaction will ever exist, and that single transaction will spend
> to a
> proof-of-burn key like 0x00. This key must be extremely secure, and if
> there
> is any doubt about the ability to keep such a key secured, then it is
> better to
> not include this in the protocol. Alternatively, maybe include it as an
> option
> 50 layers down in the revaulting sequence.
>
> * Nuclear-abort pre-signed transaction. This is signed during transaction
> tree
> setup, before constructing the delayed-spend transaction. It is broadcasted
> only if the user wants to provably relinquish coins forever without giving
> the
> attacker any coins.
>
> * Re-vaulting transaction. This is where the magic happens. The re-vaulting
> transaction is signed during transaction tree setup, before constructing
> the
> delayed-spend transaction for the parent vault. The re-vaulting
> transaction is
> broadcasted when someone wants to prevent a coin withdrawal during the
> public
> observation delay period. The re-vaulting transaction spends the
> delayed-spend
> transaction outputs. It has a single output with a script created by
> running
> the entire vault setup function again. Hence, when the re-vaulting
> transaction
> is confirmed, all of the coins go back into a new identically-configured
> vault
> instead of being relinquished through the delayed-spend transaction
> timeout for
> hot wallet key signing.
>
> * Special case: final transaction. This is the very first pre-signed
> transaction during setup, and the transaction spends the coins using any
> provable burn technique. This is broadcasted only at the end of the game,
> as an
> ultimate abort and forfeiture of coins without giving in to an adversary.
> It's
> similar to the nuclear-abort ragequit transaction but it sits at the same
> place
> that a delayed-spend transaction would, at the very end of the rainbow or
> yellow brick road.
>
> Example log during vault setup
> ==============================
>
> When running the recursive vault setup function, the created artifacts (in
> order) will look like:
>
> 1) choose one of:
> (first iteration) pre-signed burn-all-coins nuclear abort ragequit
> (final)
> (all others) a new vault setup transaction spendable only by its
> delayed-spend transaction
>
> 2) pre-signed re-vaulting transaction sending to vault setup or final
> transaction, with a unique private key
>
> 3) pre-signed delayed-spend transaction, with a unique private key
>
> 4) vault transaction spendable only by the delayed-spend public key
>
> Pseudocode
> ==========
>
> In pseudocode (where PTX is a pre-signed transaction function with
> private key deletion):
>
> VT(counter, *args, **kwargs) =
> if counter == 0:
> DST = PTX("burn-all-coins")
> else:
> next_vault = VT(counter-1, *args, **kwargs)
> revaulting = PTX("only spendable by next_vault public key")
> DST = PTX("DST policy including revaulting and other
> conditions")
> vault = PTX("spendable only by this DST")
> return vault
>
> Pre-signed transactions
> =======================
>
> What has been known for a while is that a covenant can be somewhat emulated
> using a pre-signed transaction where the user then deletes the private key,
> enforcing that the user's chosen policy must be enforced since there is
> only
> one existing option and there will only ever be one option.
>
> Such a scheme has been previously described for simple one-time and chained
> vaults [3]. I have learned that the author has an implementation that is in
> preparation, for a non-recursive version.
>
> Note that a series of pre-signed transactions can be considered to be an
> emulation of a covenant. Imagine a linear chain of pre-signed transactions
> where each hop has a relative locktime before being able to broadcast the
> next
> transaction. To recover the coins at the end of the rainbow, one would
> need to
> broadcast each sequential transaction in order and wait for the relative
> timelocks to expire each time. Here, covenants provide something like an
> undo
> for bitcoin, but only between pre-determined addresses and scripts.
>
> Fees for pre-signed transactions
> ================================
>
> There's a few different techniques to talk about:
>
> 1) SIGHASH_SINGLE|SIGHASH_ANYONECANPAY to let someone add inputs and
> outputs.
> This can get pretty complex though.
>
> 2) Add a zero-value OP_TRUE output and let anyone spend the zero-value
> output
> and attach a child-pays-for-parent (CPFP) transaction to pay for
> everything.
>
> 3) Pre-sign a variety of different possible fee rates. Unfortunately this
> involves an explosive blow-up in the amount of transaction data to
> generate. It
> might actually be a reasonable blow-up amount, only resulting in a few
> hundred
> megabytes of additional data. But given the other options, this is
> unnecessary.
>
> Delete the key (for pre-signed transactions)
> ============================================
>
> The delete-the-key trick is simple. The idea is to pre-sign at least one
> transaction and then delete the private key, thus locking in that course of
> action.
>
> Unfortunately, delete-the-key doesn't really work for multisig scenarios
> because nobody would trust that anyone else in the scheme has actually
> deleted
> the secret. If they haven't deleted the secret, then they have full
> unilateral
> control to sign anything in that branch of the transaction tree. The only
> time
> that delete-the-key might be appropriate would be where the user who
> deletes
> the key and controls the key during the setup process is also the sole
> beneficiary of the entire setup with the multisig participants.
>
> Alternative fee rates are easier to deal with using delete-the-key,
> compared to
> a technique where the private key never existed which can only be used to
> sign
> one fee rate per public key, requiring an entirely new vault subtree for
> each
> alternative fee rate. With delete-the-key, the alternative fee rates are
> signed
> with the private key before the private key is deleted.
>
> Multisig gated by ECDSA pubkey recovery for provably-unknown keys
> =================================================================
>
> A group can participate in a multisig scheme with provably-unknown ECDSA
> keys.
> Instead of deleting the key, the idea is to agree on a blockheight and then
> select the blockhash (or some function of the chosen blockhash like
> H(H(H(blockhash)))) as the signature. Next, the group agrees on a
> transaction
> and they recover the public key from the signature using ECDSA pubkey
> recovery.
> A pre-signed transaction is created, which will trigger the start of the
> public
> observation period described earlier and also start the clock for the
> bip112
> relative timelock on its output. In the output script, an OR branch
> is added that enables the use of a re-vaulting key which could also be its
> own
> separate multisig construction.
>
> This is incompatible with P2WPKH because the P2WPKH spending scriptSig
> needs to
> have the pubkey (to check the hash of the pubkey against the pubkeyhash in
> the
> scriptPubKey), which in turn makes it incompatible with ECDSA pubkey
> recovery
> which requires a hash of the message. However, with P2WPK and
> SIGHASH_NOINPUT
> instead of P2WPKH it could conceivably work. SIGHASH_NOINPUT is required
> because
> otherwise the input includes a txid which references the public key. With
> P2WPK,
> the scriptSig only needs a signature and not a public key. Note that what
> would
> be required is a version of SIGHASH_NOINPUT that does not commit to the
> public
> key, and I think a few of the NOINPUT proposals are committing to the
> public
> key.
>
> Alternatively, there may be some constructions using the 2-party ECDSA
> techniques or m-n party ECDSA techniques.
>
> Deploying exceedingly large scripts
> ===================================
>
> A brief interlude to share a somewhat obvious construction. I haven't seen
> this
> written down yet.
>
> Suppose there is a bitcoin script that someone is interested in using, but
> it
> far exceeds the size limits and sigop limits. To fix this, they would
> split up
> the script into usable chunks, and then use the delete-the-key mechanism
> (or
> the other one) to create an OR branch that is signable by a single key for
> which only a single signature is known. That new pre-signed transaction
> would
> spend to a script that has the output with the remainder of the script of
> interest. Re-vaulting or clawback clauses can be added to that output as
> well,
> but spending back to the original root script will only work by generating
> new
> scripts and keys (since the final hash isn't known until the whole tree is
> constructed, it's a dependency loop).
>
> Recursively-enforced multi-party multisig bitcoin vaults
> ========================================================
>
> Ideally, to enforce a covenant with impossible fairy dust magic, we would
> ask
> for a bitcoin transaction that could be self-referential because the
> only-one-signature-ever trick requires that the signed message be known
> before
> producing the signature, and the signature has to be known before the
> public
> key can be known, and the public key would have to be included in the
> self-referential message/transaction hash value. So, that's a dependency
> loop
> and it doesn't work. It would be interesting to explore a variation of this
> idea with masking, such that a value X can be replaced by a hash over the
> whole
> script with the X value, even though the real script will have the hash.
> Someone else can figure that one out for me :-).
>
> Instead of the self-referential values attempting to reference the same
> script that is in the process of being constructed, an alternative is to
> use
> the same script template but populate it with different parameters. The
> script
> template gets reused over and over again, all the way down the tree, until
> the
> final transaction which could be >100 years into the future once done
> adding up
> all the relative locktimes. In fact, to create and populate this terrifying
> recursive script tree, the final transaction needs to be created first, and
> then it is given as input to the script template function and that output
> is
> then given to the script template function itself-- and so on. At each
> stage,
> there are additional pre-signed transactions and values to remember.
>
> This can be written as:
>
> final_transaction = TX(spend to 0x0000 to burn the coins)
> initial_transaction = F(F(...F(final_transaction))
>
> (This is missing parameters to indicate to the function what the
> spending
> keys requirements are to be.)
>
> See earlier explanation for more details.
>
> Each call to the template populating function produces values that each
> must be
> preserved for a very long time. It is less safe to store all of the
> pre-signed
> transactions together at the same time, but more convenient. With less
> redundancy, there is an increased chance of losing data over time, which
> could
> render the coins completely frozen. This doesn't particularly worry me
> because
> forgetting a key has that property already, and this could be likened to
> hundreds of megabytes of extra key data or something. Unlike the much
> smaller
> covenant-based (opcode-based covenant) vault construction, the multiple
> layers
> here can be separately stored and protected, which might be able to protect
> against an adversary that has stolen some of the re-vaulting keys but not
> all
> of them.
>
> Optimizations can be made to store parameters for generating the remainder
> of
> the tree, such as using deterministic key derivation, such that megabytes
> of
> data wouldn't need to be long-term stored. Only the initial parameters
> would
> need to be stored.
>
> Financial privacy for custody
> =============================
>
> One of the concerns raised in [2] is that if all coins at an exchange are
> stored together in the same vault, then attackers would be able to learn
> about
> access control policies by observing scripts and keys. Some privacy can be
> recovered by using segregated vaults, at the cost of additional setup
> complexity and keeping more data in long-term storage.
>
> However, note that I think vaults are also useful for personal cold storage
> solutions.
>
> Fail-deadly mechanism
> =====================
>
> An early nuclear abort option can be added to these scripts. This idea was
> explored in [2]. This would be a very cold very secret key that would
> abort the
> re-vaulting procedure and send all coins to a (provably) nonsense key. This
> allows a vault user to destroy the coins instead of continuously
> monitoring the
> bitcoin blockchain for the rest of his life. The attacker can't recover
> their
> cost of attack if they never get the coins, and this eliminates an entire
> class
> of potential attackers who are directly interested only in financial gain.
> The
> disadvantage is that if the attacker finds the secret key for the
> fail-deadly
> mechanism and uses it, then all of the coins are gone forever.
>
> Multisig variations
> ===================
>
> The re-vaulting key could be the same key at each layer, or only sometimes
> the
> same key, or always a unique key stored separately in another secure
> location.
>
> Additionally, these re-vaulting keys could be subjected to multisig
> schemes, as
> well as Shamir secret sharing schemes or other secret sharing schemes.
>
> The idea of adding the 4-of-7 multisig component is to avoid griefing
> situations, at the cost of the additional security requirements for the
> 4-of-7
> multisig group.
>
> Key rotation for vaults
> =======================
>
> Keeping the same hot wallet key for 100 years is not advisable. Rotate the
> keys
> by setting up a new vault construction and initiating a withdrawal
> transaction
> from the old vault to the new vault.
>
> Single-use seals
> ================
>
> This proposal may have inadvertedly demonstrated a practical way to
> implement
> Peter Todd's single-use seals concept [4]. I am hesitant to say so, though,
> because I think he would ask for a more sophisticated way to verify seal
> closure.
>
> Paid defection
> ==============
>
> It might be advisable to add small rewards for evidence of defection
> amongst
> multiparty multisig setups. Besides amounts spendable by individual keys
> from a
> multisig setup, it may be possible to use a zero-knowledge contingent
> payment
> for a zero-knowledge statement like: I have a signature s over some
> message m
> which validates for pubkey pk where pk is a member of the multisig group.
> Then
> the zkcp transaction would pay for knowledge of defectors. The zkcp
> procedure
> would require interaction with the defector, while the direct pubkey method
> would not. This is similar to companies paying employees to quit when they
> value the payment over the value of continued employment.
>
> Handling change
> ===============
>
> It is important to note that this vault setup is one-time and once-only.
> There
> must only ever be one deposit into one vault. Also, spending some coins
> would
> require sending the change amount back into a new vault. Alternatively,
> upfront work can be done to set a regular withdrawal stipend or assumption
> about how many coins are left, such that the transaction tree can be
> pre-generated for those possibilities, hence cutting down on future vault
> reinitializations. It would also be possible to commit upfront to only ever
> working in some minimum increment number of bitcoin or something.
>
> It is very important to only fund the vault once, and only with the amount
> that
> was configured when setting up the vault.
>
> References
> ==========
>
> [1] https://fc16.ifca.ai/bitcoin/papers/MES16.pdf
>
> [2]
> http://www0.cs.ucl.ac.uk/staff/P.McCorry/preventing-cryptocurrency-exchange.pdf
>
> [3]
> http://web.archive.org/web/20180503151920/https://blog.sldx.com/re-imagining-cold-storage-with-timelocks-1f293bfe421f?gi=da99a4a00f67
>
> [4]
> https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2017-December/015350.html
> or
> https://diyhpl.us/wiki/transcripts/building-on-bitcoin/2018/single-use-seals/
> or https://petertodd.org/2016/closed-seal-sets-and-truth-lists-for-privacy
>
> Acknowledgements
> ================
>
> * Jeremy Rubin for pointing out something embarrassingly broken in an
> earlier
> draft.
>
> * Bob McElrath for telling me to use SIGHASH_NOINPUT which I proceeded to
> promptly forget about.
>
> * Andrew Poelstra for the OP_TRUE trick.
>
> * Joe Rayhawk for paid defection.
>
> * Tadge Dryja for pointing out a few differences between SIGHASH_NOINPUT
> proposals.
>
>
>
> Thank you,
>
> - Bryan
> http://heybryan.org/
> _______________________________________________
> bitcoin-dev mailing list
> bitcoin-dev at lists.linuxfoundation.org
> https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev
>
--
Dr. Praveen Baratam
about.me <http://about.me/praveen.baratam>
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2023-06-07 18:20:02

- reply

📅 Original date posted:2019-08-05
📝 Original message:Hello Devs,
I am Praveen and I am the inventor of CoinVault, a new second layer
protocol and technology that makes Bitcoin and other similar altcoins
`Unstealable
and Unlosable` for all practical purposes. Tall claim, but I will get to
the details in a bit.
Before that, here is a little context to set the perspective…
I was introduced to Bitcoin by a friend in 2017 and realized how late I was
to the party.
Bitcoin Cash's block size debate was a hot topic then and so were many
hacks and heists affecting various cryptocurrency exchanges across the
world.
I personally did not like the idea of increasing block size to accommodate
more transactions and also thought that Cold Storage and Multi-Sig security
for Hot Wallets (BitGo) is just the beginning.
We thought micro and high frequency transactions should ideally be handled
by intermediaries who settle balances periodically, while larger
transactions and settlements happen directly on Blockchain. Even if
Lightning Network handles all micro-transactions, we cannot completely rule
out all intermediaries and we still need exchanges, etc. to interface with
the offline world. This felt like a healthy compromise while preserving the
spirit of Bitcoin.
But given the security requirements and concerns surrounding Bitcoin and
other cryptocurrencies, any kind of pooling in the hands of any
intermediary such as an exchange, wallet, escrow, etc., makes it a hot
target for hackers.
To mitigate this problem, me and my fellow compatriots set out to create a
safer way to store cryptocurrencies both for individuals and enterprises.
After nearly two years of brainstorming and toiling we have come up with
CoinVault, a second layer technology, that can ensure the safety and
security of Bitcoin and other cryptocurrencies for both large and small
entities.
Below is an overview of CoinVault technology specifically adopted to secure
Cryptocurrency Exchanges and Wallets. Please find the figures referred to
in the below text in the PDF attached. The complete draft is also attached
as a PDF if you prefer printing and reading it. A video overview
<https://www.youtube.com/watch?v=yDvLqTv1FDg> is also attached for those
who prefer a video over text.
Any and every feedback will help us iterate and serve the ecosystem better.
We are all ears for your comments and suggestions.
-----------------~~~~~~~~~~~~~~~-----------------
Secure Cryptocurrency Exchange & Wallet
Dr. Praveen Baratam
Background:
Cryptocurrencies in general are both acquired and traded on an electronic
exchange that lists different cryptocurrencies/crypto-assets often with
other assets such as fiat currencies issued by central banks of various
countries and enables trading between them. Most of these exchanges are
custodial in nature and act as trusted third parties where trading parties
transfer both cryptocurrencies and other assets in their control/possession
to the exchange controlled addresses/accounts and get notional limits on
the exchange to trade. All this works well as long as there is no security
breach on the exchange.
Since most cryptocurrencies are secured by public-key encryption which is
knowledge based, any security breach on the exchange’s systems can be
disastrous. And any adversary gaining access to exchange’s private-keys can
irreversibly steal the cryptocurrencies in its custody leading to huge loss
of wealth for trading parties and loss of trust within the ecosystem. We
have seen this scenario playout with many cryptocurrency exchanges all over
the world at some point or the other and approximately 15 Billion USD worth
cryptocurrencies were stolen from them as of Dec 2017. This has become the
Achilles heel of the cryptocurrency world off late.
Over time cryptocurrency exchanges have evolved several strategies such as
Hot-Wallets coupled with Cold/Offline Storage, Multi-Signature arrangements
with third-parties that serve as gatekeepers to enforce limits on
transactions, insurance for hot funds, etc. But most of these strategies
have proved inadequate and/or were circumvented over the past few years by
increasingly sophisticated attacks. eg: BitFinex lost $71 Million USD worth
of Bitcoin in spite of Multi-Signature arrangements with BitGo.
The same is true for Custodial Cryptocurrency Wallet Services, hereafter
referred to as Cryptocurrency Wallets, that store users’ funds/tokens with
them and allow their users to make transactions like a bank. They then
settle these transactions on their users’ behalf. Most Cryptocurrency
Exchanges also double up as Cryptocurrency Wallets for their users allowing
transacting parties to pay/accept in cryptocurrencies/assets of their
choice and managing the conversion for them when necessary.
There is an urgent need for securing cryptocurrency exchanges and wallets
to prevent further losses and bolster general faith in the cryptocurrency
ecosystem.
Solution:
The following describes an arrangement and method, in its simplest form,
between two parties (First Party and Second Party where the Second Party is
acting as Secure Cryptocurrency Exchange and/or Wallet for the First Party)
participating in a cryptocurrency network/system to effectively reduce the
probability of loss or theft of the First Party’s funds/tokens while
guaranteeing settlement between trading/transacting parties by the Second
Party. Hereafter, the term Cryptocurrency Exchange, shall also imply
Cryptocurrency Wallet wherever relevant.
The method presumes that unrecoverable hardware wallets (or rendered
unrecoverable by not-recording / discarding the backup/seed) without any
provision for recovery of the private-keys/secrets stored inside it in case
of loss or malfunction of the device, hereafter referred to as hardware
tokens, and time-locks for transaction outputs are available for the
crypto-currency system of interest. Relative time-locks
(CheckSequenceVerify) similar to the one described in Bitcoin Improvement
Proposal 112 are more desirable than absolute time-locks
(CheckLockTimeVerify) similar to the one described in Bitcoin Improvement
Proposal 65. The subsequent discussion assumes relative time-locks are
available for the cryptocurrency of interest even though similar
functionality can be devised using absolute time-locks too.
The method and arrangement proceeds as follows:
1.
At inception, the First Party creates a transaction similar to the one
depicted in Figure 1, hereafter called the Deposit Transaction, in which
the First Party transfers an arbitrary sum of funds/tokens in its control
to a multi-signature address but does not yet sign or broadcast it. The
multi-signature address in the Deposit Transaction requires the following
signatures to authenticate and spend/transfer from it:
1.
First Party’s Private Key generated Signature
2.
First Party’s Hardware Token generated Signature
3.
Second Party’s Private Key generated Signature
2.
Then, the First Party creates a second transaction, hereafter referred
to as Provisional Transaction, as depicted in Figure 2, spending all the
funds/tokens sent to the multi-signature address in the Deposit
Transaction, and sends a copy of the Provisional Transaction without any
signed inputs or signatures, to the Second Party. Please note that the
Provisional transaction is spending from an unconfirmed Deposit Transaction.
3.
Then, the Second Party adds its Private Key generated signature to the
unsigned Provisional Transaction received from the First Party and then
sends the partially signed Provisional Transaction back to the First Party.
4.
In the meantime, the First Party also adds its Private Key generated
signature and the signature generated by the hardware token in its
possession to the unsigned copy of the Provisional Transaction it created
and sends the partially signed Provisional Transaction to the Second Party.
Note: The signatures used in this scheme sign the transaction similar to
SIGHASH_ALL or SIGHASH_SINGLE in BitCoin protocol where the corresponding
output of the transaction cannot be modified once signed.
5.
At this point in time, the First Party is in possession of the partially
signed Provisional Transaction with Second Party’s Private Key generated
signature added to it and the Second Party is in possession of the
partially signed Provisional Transaction with First Party’s Private Key
generated signature and the signature generated by the hardware token in
First Party’s possession added to it.
6.
Then, the First Party signs and broadcasts the Deposit Transaction it
created to the cryptocurrency network/system completing the setup process.
The whole process in outlined in Figure 3.
7.
Once the Deposit Transaction is confirmed, both First Party and Second
Party start monitoring the Cryptocurrency network directly and/or using
third party services for transactions referencing the Multi-Signature
output address described above from the Deposit Transaction to detect any
breach of security or foul play.
8.
Subsequently, the First Party, at its discretion, can add its Private
Key generated signature and the signature generated by the hardware token
in its possession to the partially signed Provisional Transaction with the
Second Party’s Private Key generated signature and broadcast the fully
signed Provisional Transaction to the cryptocurrency network/system when
necessary.
9.
Similarly, the Second Party can add its Private Key generated signature
to the partially signed Provisional Transaction with the First Party’s
Private Key generated signature and the signature generated by the hardware
token in possession of the First Party and broadcast the fully signed
Provisional Transaction to the cryptocurrency network/system when necessary.
10.
To sum it up, either parties can add missing signatures to the partially
signed Provisional Transaction in their possession and broadcast them when
necessary.
11.
As soon as the Provisional Transaction is broadcasted, the
cryptocurrency monitoring systems prompt both parties to initiate recovery
if it is not broadcasted by them to begin with. Either ways First Party or
the Second Party in coordination with the other or optionally unilaterally
create and broadcast a transaction using the respective options of the
Provisional Transaction transferring the funds/tokens to a desired address
terminating the arrangement.
Description
Cryptocurrency Exchanges act as custodial escrow agents for the trading
entities participating on their platforms to minimize counter party risk
and guarantee settlement. However, this escrow mechanism, with respect to
cryptocurrencies, creates a new problem of keeping third party funds/tokens
in their custody safe and secure. A security breach on the respective
Cryptocurrency Exchanges’ systems can compromise the private-keys securing
the funds in its custody and lead to loss/theft of respective funds/tokens.
In the proposed scheme/arrangement a Cryptocurrency Exchange can enforce
settlement albeit with a predefined delay and does not need exclusive
custody of the said funds/tokens beforehand to guarantee settlement.
Moreover, in the event of a security breach on one or both sides, there are
remedial steps that the Cryptocurrency Exchange and/or First Party can take
to prevent loss or theft of respective funds/tokens.
Generally, First Party will cooperate with Second Party in the settlement
process and in situations where it disagrees or refuses to cooperate, the
Cryptocurrency Exchange (Second Party) can get exclusive custody of the
respective funds/tokens and enforce settlements as per the terms of the
contractual service agreement with the First Party.
For instance, when the First Party is in disagreement with a proposed
settlement for a trade, the Cryptocurrency Exchange (Second Party) can use
the Option 2 as depicted in Figure 2 and take exclusive custody of the
respective funds/tokens to enforce settlement. This option allows the
Cryptocurrency Exchange to function as a regular custodial escrow between
trading parties as is the case with most exchanges and in general.
In another instance, if a Cryptocurrency Exchange suffers a security breach
and its private-keys are compromised/stolen, it can use Option 1, 2, 3, 7
or 8 depicted in Figure 2 to transfer the funds/tokens to another secure
address or back to the First Party as may be desired. Cryptocurrency
Exchanges can even prevent loss/theft using Option 7 depicted in Figure 2
and transfer the respective funds/tokens away from the compromised address
even when its hardware tokens are lost/stolen in the above described
situation.
Also, the Cryptocurrency Exchange (Second Party) can use Option 2 depicted
in Figure 2 and transfer the respective funds/tokens to a secure address
when First Party’s private-key and/or hardware token are
compromised/lost/stolen.
The Confusion Matrix in Figure 4 enumerates the options available and
outcomes of situations where private-keys and/or hardware tokens of First
Party and/or Second Party are compromised or stolen. It also enumerates
situations where respective private-keys are lost by First Party but not
Second Party.
Since Second Party is an organized entity that can employ data-safety
measures such as multi-site replication, offline storage, etc. this method
does not explicitly specify the process and enumerate options available
when Second Party’s private-keys are lost for simplicity and brevity. This
method can be analogously extended to this scenario and more or simplified
if desired by reordering,adding or removing options in the Provisional
Transaction accordingly when planning and accounting for certain
contingencies are deemed necessary or unnecessary. Also the timelocks
mentioned in the Provisional Transaction are one of the many possible
values for them exemplifying a particular order and can be adjusted as
necessary to suit a particular arrangement.
It should be noted here that the Second Party always gets first claim on
the respective funds/tokens as it is accepting a liability on First Party’s
behalf and can steal First Party’s funds/tokens but will not do so because
such unilateral actions will result in loss of trust/business from other
parties as well as legal proceedings by the First Party. Hence, the
incentive and motive to cheat the First Party of its funds/tokens by Second
Party is non-existent. But if First Party and/or Second Party are
compromised either by an internal or external adversary, they still have
recourse and can reconcile the situation by taking remedial steps available.
Finally, even if Hardware Tokens are not available and we have to rely on
relative/absolute timelocks only, the method and scheme described above can
be scaled down as depicted in Figure 5 and still offer better protection
than currently practiced multi-signature arrangements.
https://www.youtube.com/watch?v=yDvLqTv1FDg
ᐧ
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2023-06-07 18:10:59

- reply

📅 Original date posted:2018-02-21
📝 Original message:Thank you Daniel!
Your detailed explanation did clear things up :-)
ᐧ
On Wed, Feb 21, 2018 at 6:29 AM, Daniel Robinson <danrobinson010 at gmail.com>
wrote:
> Yes, although it's a functionality of Bitcoin Script generally, not OP_CSV
> in particular. Bitcoin Script allows you to use nested IF statements, and
> enforce whatever different conditions you want in each branch.
>
> Here's your contract in Ivy <https://ivy-lang.org/bitcoin/>:
>
> contract MultiCSV(
> bob: PublicKey,
> carol: PublicKey,
> bobDelay: Duration,
> carolDelay: Duration,
> val: Value
> ) {
> clause bobSpend(sig: Signature) {
> verify checkSig(bob, sig)
> verify older(bobDelay)
> unlock val
> }
> clause carolSpend(sig: Signature) {
> verify checkSig(carol, sig)
> verify older(carolDelay)
> unlock val
> }
> clause bothSpend(bobSig: Signature, carolSig: Signature) {
> verify checkMultiSig([bob, carol], [bobSig, carolSig])
> unlock val
> }
> }
>
> It compiles to the following Bitcoin Script:
>
> PUSH(carolKey) PUSH(bobKey) 2 PICK 2 EQUAL IF ROT DROP 0 4 ROLL 4 ROLL 2
> 2ROT 2 CHECKMULTISIG ELSE ROT IF DROP CHECKSIGVERIFY PUSH(carolDelay)
> CHECKSEQUENCEVERIFY DROP 1 ELSE NIP CHECKSIGVERIFY PUSH(bobDelay)
> CHECKSEQUENCEVERIFY DROP 1 ENDIF ENDIF
>
> On Tue, Feb 20, 2018 at 5:32 PM Praveen Baratam via bitcoin-dev <
> bitcoin-dev at lists.linuxfoundation.org> wrote:
>
>> Hello Everybody,
>>
>> I need a little clarity about how OP_CHECKSEQUENCEVERIFY (CSV) works in
>> transactions.
>>
>> Can I use multiple CSV end points as depicted in the figure below? I
>> basically want to allow different conditions at different delays.
>>
>> [image: Multi CSV.png]
>>
>> I just want to know if OP_CHECKSEQUENCEVERIFY can be used to achieve the
>> above.
>>
>> Thank you.
>>
>> Praveen
>> ᐧ
>> _______________________________________________
>> bitcoin-dev mailing list
>> bitcoin-dev at lists.linuxfoundation.org
>> https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev
>>
>
--
Dr. Praveen Baratam
about.me <http://about.me/praveen.baratam>
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2023-06-07 18:10:58

- reply

📅 Original date posted:2018-02-20
📝 Original message:Hello Everybody,
I need a little clarity about how OP_CHECKSEQUENCEVERIFY (CSV) works in
transactions.
Can I use multiple CSV end points as depicted in the figure below? I
basically want to allow different conditions at different delays.
[image: Inline image 3]
I just want to know if OP_CHECKSEQUENCEVERIFY can be used to achieve the
above.
Thank you.
Praveen
ᐧ
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2023-06-07 18:07:50

- reply

📅 Original date posted:2017-11-20
📝 Original message:BIP 140 looks like it solves Tx Malleability with least impact on current
practices. It is still a soft fork though.
Finally, if we were to create an alternative cyptocurrency similar to
Bitcoin, a Normalized Tx ID approach would be a better choice if I get it
right!
ᐧ
On Mon, Nov 20, 2017 at 11:15 PM, Johnson Lau <jl2012 at xbt.hk> wrote:
> We can’t “just compute the Transaction ID the same way the hash for
> signing the transaction is computed” because with different SIGHASH flags,
> there are 6 (actually 256) ways to hash a transaction.
>
> Also, changing the definition of TxID is a hardfork change, i.e. everyone
> are required to upgrade or a chain split will happen.
>
> It is possible to use “normalised TxID” (BIP140) to fix malleability
> issue. As a softfork, BIP140 doesn’t change the definition of TxID.
> Instead, the normalised txid (i.e. txid with scriptSig removed) is used
> when making signature. Comparing with segwit (BIP141), BIP140 does not have
> the side-effect of block size increase, and doesn’t provide any incentive
> to control the size of UTXO set. Also, BIP140 makes the UTXO set
> permanently bigger, as the database needs to store both txid and normalised
> txid
>
> On 21 Nov 2017, at 1:24 AM, Praveen Baratam via bitcoin-dev <
> bitcoin-dev at lists.linuxfoundation.org> wrote:
>
> Bitcoin Noob here. Please forgive my ignorance.
>
> From what I understand, in SegWit, the transaction needs to be serialized
> into a data structure that is different from the current one where
> signatures are separated from the rest of the transaction data.
>
> Why change the format at all? Why cant we just compute the Transaction ID
> the same way the hash for signing the transaction is computed?
>
> --
> Dr. Praveen Baratam
>
> about.me <http://about.me/praveen.baratam>
> _______________________________________________
> bitcoin-dev mailing list
> bitcoin-dev at lists.linuxfoundation.org
> https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev
>
>
>
--
Dr. Praveen Baratam
about.me <http://about.me/praveen.baratam>
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2023-06-07 18:07:49

- reply

📅 Original date posted:2017-11-20
📝 Original message:Bitcoin Noob here. Please forgive my ignorance.
>From what I understand, in SegWit, the transaction needs to be serialized
into a data structure that is different from the current one where
signatures are separated from the rest of the transaction data.
Why change the format at all? Why cant we just compute the Transaction ID
the same way the hash for signing the transaction is computed?
--
Dr. Praveen Baratam
about.me <http://about.me/praveen.baratam>
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