Here's a little idea I thought of while day dreaming!
There seems to be a demand for a solution that provides better security for instant transactions without risking double spends.
Some will even mention LTC as being better in this regard as it has faster confirmation times. 1 confirmation in LTC is still better than 0 confirmations in BTC. There are merchants who want SOME type of assurance until a transaction finds its place in a block, even if it’s not as good as a complete confirmation. Something that assures the merchant that it’s not a double spend or that a double spend will be hard to accomplish. My idea could allow for instant secure transactions without any modification to the protocol at all.
The method I’ve pondered is using a “Miner’s Alliance for Instant Transactions” (MAIT).
If the merchant requires the use of high security instant transactions the merchant requests payment from the customer with a built in fee. This fee is actually set by the MAIT and may not be what the general Bitcoin network is using for fees.
The transaction is then re-sent to the MAIT using an API that:
-sends the 0-confirmation transaction to the MAIT for verification (Is it valid? Is it a double spend of something already out there? Was the proper fee attached for MAIT?)
-responds back with how much of the MAIT has “Ok’ed” the transaction
The merchant then gets back a message saying how much the MAIT has accepted the transaction. The merchant also gets the MAIT promise that any NEW transaction that would be a double spend of the previous transaction will be ignored even if the fees are higher. A miner who breaks this rule can no longer be part of the alliance. It also promises to include the transaction in the next available block if possible. The MAIT does this for slightly higher fees while the merchant gets instant feedback on how likely the transaction will succeed.
IF a large margin of miners and pools join MAIT, then instant transactions will be even more secure then the 1-confirmation in any faster confirming alt coin. If >90% of the network has promised your transaction going through, a double spend becomes even harder to accomplish as the attacker would have very little chance of making a block to double spend.
The miners win as well as they could have a slightly higher fee to provide the service. Even having a separate fee system where costs are shared amongst all members.
Would this work or not?
Another crazy idea would be using the API to get specific addresses for merchants to use so they are not normal fees but a payment to the merchant as well as a payment to the MAIT in the same transaction. The alliance then commits to this transaction EVEN if a double spend happens in another block.
(edit: but probably give up after 1 block or something) The MAIT will ignore the block that does the double spend and since they have a huge majority of the network they can fork the blockchain without the double spend. This would make it against any other miners intrust to ignore or go against a MAIT transaction! It would probably mean that other miners who aren't part of MAIT will have to be careful not to include a double spend, especially one that's in the public MAIT transaction waiting list for inclusion in a block.
