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Author Topic: Secure zero-confirmations payments w/ 24h notarized P2SH multisignature wallets  (Read 1029 times)
Natanael
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November 30, 2013, 10:35:58 PM
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I've got an idea for how to use notaries and P2SH addresses with multisignature transactions to make zero-confirmations transactions secure for merchants.

The full text is here: http://roamingaroundatrandom.wordpress.com/2013/11/30/bitcoin-idea-temporary-notarized-wallets-secure-zero-confirmation-payments-using-temporary-notarized-p2sh-multisignature-wallets/1

The thread on Reddit: http://www.reddit.com/r/Bitcoin/comments/1rsg78/bitcoin_idea_temporary_notarized_wallets_secure/

The TL:DR (kind of);

Using the scripts feature and pay-to-script-hash addresses, you create an address that for the first 24 hours only allow you to spend if a notary sign your transaction. Notaries have no incentive to enable a doublespend since it would be discovered nearly instantly and can be easily proven causing a total loss of trust. A merchant that trust the notary in use can accept transactions from these addresses with zero confirmations if there's about an hour or more left of the time window for notarization requirement, as they can be confident that no doublespend transactions will be accepted by the network as it won't have a valid signature, so they can be confident that the notarized transaction with the payment to them will be confirmed in the blockchain long before the buyer has any chance of making a doublespend transaction.

After 24h there's no longer any notary signature requirement, so if the notary shuts down your money isn't lost.
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