Increasing hot wallet security by adding decentralized 2-factor

[coastermonger]

[BitTrade]

I like this idea.  Has anyone attempted to implement it?

[trcwhale]

This looks very interesting!!!

[DeathAndTaxes]

Um isn't this exactly how multisig works?

Except the network on the left and right will both be the bitcoin network and the missing piece is a protocol message to relay partially signed transactions.

[Parliament]

Lucidchart is awesome!

Problem is: everything you're describing is identical to multisig, except that both partially signed and completed transactions are on the same (main) network.

lets you know when a spend attempt has been made

You could modify a client, or write a monitoring solution to do this.

No need to reinvent the wheel.

[DeathAndTaxes]

except that both partially signed and completed transactions are on the same (main) network

that is a potential outcome but currently the existing bitcoin network has no support for partially signed messages.  So today the partially signed messages need to be relayed out of band.  There is nothing that would prevent the protocol from being extended to support a new "PartialTx" message.  It wouldn't even be a hard fork as older nodes would simply ignore them.  There are some potential DDOS and spam concerns.  Current anti-spam rules operate on the assumption that nodes will only relay tx which will eventually confirm (and thus have a cost to the attacker).  An attacker can choose to never complete partially signed messages and thus could spam/attack/degrade the network.   There are some potential solutions but it is a problem which needs to be considered carefully.

[Parliament]

that is a potential outcome but currently the existing bitcoin network has no support for partially signed messages.

I see, thanks for explaining!

[Bitalo_Maciej]

Didn't you already post this idea in another thread?