Why doesn't bitcoin have a "freeze" function?

[PrimeNumber7]

1) Bitcoin address X wants to add the freeze feature. So it generates a special bitcoin address F.

2) This new address F will control the state of address X.

3) When the user wants to freeze address X, they send a transaction to address X using a special opcode.

4) The first time a user freezes their address X using address F, miners will create a record in a special database that lists address X along with its related controlling address F. A flag field will be toggled to "1" which will represent the frozen state.

5) If a transaction is ever attempted from address X in the frozen state, miners will reject it because they will first consult their database and see that address X is in the frozen state. Assuming no other reasons for which the transaction would be invalid, they can provide an error code indicating the address is frozen and thus the transaction cannot be completed.

6) When the user wants to unfreeze address X, they just send a transaction to address X from address F using the same opcode.

7) Miners will update their database and update the record for address X by toggling its flag field to "0" which will represent the unfrozen state.

If a transaction is ever attempted from address X in the unfrozen state, miners will first consult their database and see that address X is in the unfrozen state and then continue to process the transaction as normal. If it passes all the other consensus rules then it will be accepted.

Do you guys think this would work? I spent the better part of a day coming up with it so I sure hope so! Let's turn this baby in to a BIP.

What you describe is just a complicated and more expensive version of 2-of-2 multi sig. in order to spend the coin, you need the private keys for address x and address F.

As Danny mentioned above, your coin should not be thought of as an account, but rather as cash.

As I mentioned above, “freezing” your credit card is a loss prevention feature to prevent losses for your bank, not you. With credit cards, you are generally not liable for unauthorized transactions.

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[larry_vw_1955]

in order to spend the coin, you need the private keys for address x and address F.

to unfreeze and spend you would need both but once it is unfrozen, they can do as many single sig transactions as they want to which is more convenient to the end user. Once they are done they can lock it up again by signging once with their private key. that's the theory of it anyway.

As I mentioned above, “freezing” your credit card is a loss prevention feature to prevent losses for your bank, not you.

I get that totally 

[o_e_l_e_o]

to unfreeze and spend you would need both but once it is unfrozen, they can do as many single sig transactions as they want to which is more convenient to the end user. Once they are done they can lock it up again by signging once with their private key. that's the theory of it anyway.

Then just use a multi-sig cold storage set up combined with a standard single-sig wallet. The single-sig wallet can be a hot wallet for portability and convenience, or can be a hardware wallet or cold storage itself for added security.

Think of your coins in the multi-sig as "frozen". No one can access them without gaining access to 2 (or more) private keys, just like someone wanting to use your credit card needs to gain access to 2 factors - your credit card itself and your online account. When you want to "unfreeze" the coins, send them from this multi-sig address to your single-sig address and make as many transaction from this single-sig as you like. When you want to "freeze" them again, send them back to the multi-sig cold storage.

The bonus of this set up is you do not need to "unfreeze" your entire stack, and can choose to only "unfreeze" as many coins as you want to at the time.

[o_e_l_e_o]

While it's good alternative, it could be costly if OP doesn't pay attention about transaction fee or the wallet has poor UTXO selection.

True, but taproot would keep the multisig transactions as small as possible, and if he does pay attention to his UTXOs then he could potentially save money over "unfreezing" unnecessary UTXOs only to have to "freeze" them again. Seems like the simplest solution to what he wants to achieve.

[larry_vw_1955]

While it's good alternative, it could be costly if OP doesn't pay attention about transaction fee or the wallet has poor UTXO selection.

True, but taproot would keep the multisig transactions as small as possible, and if he does pay attention to his UTXOs then he could potentially save money over "unfreezing" unnecessary UTXOs only to have to "freeze" them again. Seems like the simplest solution to what he wants to achieve.

In my ideal scheme that I have proposed (who knows if it is actually feasible/reasonable to expect devs to ever consider), the utxos are all turned on and off together like lightbulbs on a christmass tree. no need to worry about which ones to freeze and unfreeze in order to construct your transaction.

to unfreeze and spend you would need both but once it is unfrozen, they can do as many single sig transactions as they want to which is more convenient to the end user. Once they are done they can lock it up again by signging once with their private key. that's the theory of it anyway.

Then just use a multi-sig cold storage set up combined with a standard single-sig wallet. The single-sig wallet can be a hot wallet for portability and convenience, or can be a hardware wallet or cold storage itself for added security.

Think of your coins in the multi-sig as "frozen". No one can access them without gaining access to 2 (or more) private keys, just like someone wanting to use your credit card needs to gain access to 2 factors - your credit card itself and your online account. When you want to "unfreeze" the coins, send them from this multi-sig address to your single-sig address and make as many transaction from this single-sig as you like. When you want to "freeze" them again, send them back to the multi-sig cold storage.

The bonus of this set up is you do not need to "unfreeze" your entire stack, and can choose to only "unfreeze" as many coins as you want to at the time.

i always feel stupid when i come up with some complicated scheme and then someone introduces me to something that already exists and does the same exact thing 

your idea is pretty close to the same end effect but the method is not the same. the only thing i would argue here is the funds in a 2of2 multisig, their utxos are not in any type of frozen state. with my idea which i know is crazy, the utxos have a state. the state must be changed before they can be spent. how that state gets changed should be cheaper than having to combine alot of utxos and send them to somewhere else to be spent.

[moderator's note: consecutive posts merged]

[BlackHatCoiner]

I think that you didn't pay attention to DannyHamilton's post, which was a wonderful read by the way.

You probably haven't understood that this electronic payment method is a currency. Note that it's significant and completely different from payment processors. When you're using your credit card to buy something, you become in debt of this purchase in fiat. When, your Netflix sweeps you money from your bank account for the monthly payment, it debts you in fiat. Unless you pay someone in cash, you're getting constantly in debt for your purchases.

Your credit card and your bank account aren't currencies; they manage to debt you in a currency, which is fiat. In Bitcoin, if you make a purchase, you aren't in debt of anything; the confirmed transaction is a proof that you paid your dues. I don't know if you understand this, but it's significantly different.

If you wanted from Bitcoin to have a “freeze” option you should deposit it on a third party and they'll freeze your money (which is no longer yours) whenever you told them to.

[vjudeu]

In my ideal scheme that I have proposed (who knows if it is actually feasible/reasonable to expect devs to ever consider), the utxos are all turned on and off together like lightbulbs on a christmass tree. no need to worry about which ones to freeze and unfreeze in order to construct your transaction.

If you don't want to choose your UTXO, then you have to accumulate everything on one UTXO. Because transaction fees depend on transaction size, people have incentive to use as small number of UTXO's as possible. There are coins like Ethereum where everything is account-based and all amounts are automatically accumulated, but that's the same level of privacy than using single UTXO in Bitcoin. If you have more splitted funds, you have better privacy, but you can always send coins to yourself and have just one UTXO if you really want.

[larry_vw_1955]

I think that you didn't pay attention to DannyHamilton's post, which was a wonderful read by the way.

Yes it was wonderful and yes I did read it. I'll make up a more formal reply to his posting in that case. Since you seem to feel that I didn't notice it. thanks

If you don't want to choose your UTXO, then you have to accumulate everything on one UTXO. Because transaction fees depend on transaction size, people have incentive to use as small number of UTXO's as possible. There are coins like Ethereum where everything is account-based and all amounts are automatically accumulated, but that's the same level of privacy than using single UTXO in Bitcoin. If you have more splitted funds, you have better privacy, but you can always send coins to yourself and have just one UTXO if you really want.

You just gave me another amazing idea! But I'm not sure if it would be possible to implement but I'll maybe try and think about it a bit more and make a posting sometime. I don't think the boys can handle too many new ideas in one single thread you know

You are thinking of Bitcoin as an electronic payment system instead of as a currency.

If you have cash in your wallet in your back pocket, there is no way to "freeze" that.  If anyone get's their hands on your wallet, they can spend the cash that is in it.  The way you protect your cash from being spent is to do one of two things. You either make sure that the cash is always under your control (that nobody else has physical access to it), or you find a trusted third party (such as a bank) and you give it to them, trusting that they will make sure that the cash is always under THEIR control (using economy of scale, they can implement more expensive vaults, guards, security systems, and insurance than you can).

I'm not sure why it is but I don't think I would trust anyone with holding my bitcoin for me. But yet, I trust them with my small lifetime savings they haven't stole it from me yet and they do let me spend it if i want to but I'm not dumb enough to think that they are my friend. And that they wouldn't do what is in their best interest even if it hurt me, a customer, if it came to that. I don't mind my cash being under their control but I do mind my bitcoin being in that status! Now putting an flash drive with my private key inside a lockbox at the bank well i don't consider that being under their control. they're not even supposed to open the box.

IF you choose to trust someone else (such as a bank) to maintain control of your funds, THEN they can provide a method for you to "lock" your account with them so that no transactions can occur until you perform some "unlocking" action.  Of course, if the thief can figure out out to perform the unlocking action, then they'll still be able to access the account.

the problem with trusting someone like is they might lock your funds when you don't want them to and never gave them permission to. they might go out of business. they might have a rogue employee that goes on a spending spree with my bitcoin. never say never.

This is exactly how Bitcoin works.

I can play the role of the bank too, if I have the features built into the particular cryptocurrency such as the ability to freeze and unfreeze my own address.

If you use your own wallet, and you have control of your private keys, then it is up to you to secure those private keys so that nobody else can access them. This is like cash in your back pocket, or in a small safe in your house, or hidden in a drawer somewhere in your house, etc.

If you choose to use a custodial service, then you can turn over complete control of your bitcoins to that service. That service can then make transactions on your behalf whenever you ask them to. You'll have to trust that they'll do a good job of securing the bitcoins that they are holding for you against both outside attackers and internal fraud. It would be easy for such a service to provide a "locking" method where they would refuse to create any transactions on your behalf until you perform an "unlocking" action. This is like depositing your cash into a service (such as a bank).

The problem with the above scenario is I have no way of knowing how good of a job they are actually doing and as you said I have to just "trust". The last thing I want is handing over complete control of bitcoins to a custodial service because I am not sure they are going to be trustworthy. Custodial services could freeze your account if they wanted to without your permission. What would you do then?

Coinbase already offers something like this with their 2FA system.  You can "lock" your Coinbase account with 2FA, and then they will refuse to send any transactions on your behalf unless you provide the appropriate 2FA value to "unlock" your account for that single transaction.

Well I don't think coinbase has very good customer service. I would be very hesitant to do business with a company who I can't get ahold of on the phone anytime I want to. Now I can get off my soapbox.

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[BlackHatCoiner]

I'm not sure why it is but I don't think I would trust anyone with holding my bitcoin for me.

But, you do trust a bank for holding your money which can be frozen anytime, right?

the problem with trusting someone like is they might lock your funds when you don't want them to and never gave them permission to. they might go out of business. they might have a rogue employee that goes on a spending spree with my bitcoin. never say never.

There are lots of problems with trusting someone, but only if you have a trusted third party, you can use this frozen “feature”.

I can play the role of the bank too, if I have the features built into the particular cryptocurrency such as the ability to freeze and unfreeze my own address.

But, for the bank, the money aren't frozen. They can move them whenever they want. Again, you have to be their client in order to freeze your own money.

[larry_vw_1955]

But, you do trust a bank for holding your money which can be frozen anytime, right?

Money is different than bitcoin. Money belongs to the government and they control it. Banks are part of that system. Bitcoin is totally different. The government also has insurance on your money so they guarantee you can't lose it. I don't think they could do that for bitcoin.
Of course, it can be debated whether the us government fdic insurance really means anything or not. But I'm not here to make that discussion :-)

There are lots of problems with trusting someone, but only if you have a trusted third party, you can use this frozen “feature”.

There is no such thing as a "trusted third party" there are just "third parties" in view of things. But hey everyone can see things how they wish. Now there may be such things as "parties you are kind of forced to trust but really don't want to" etc. I'm sure we all know abut that.

But, for the bank, the money aren't frozen. They can move them whenever they want. Again, you have to be their client in order to freeze your own money.

I think usdc has a feature where they (THE ADMINS) can freeze particular addresses. I'm against that to be quite honest. But I'm all for each individual having soverignty to manage their own funds and freeze them if they had the ability to. THANKS.

[pooya87]

Money is different than bitcoin. Money belongs to the government and they control it.

The correct term is "fiat" not money.
Money is any object or verifiable record that is used for payment. So technically money is the bigger category that contains both fiat and bitcoin.

[BlackHatCoiner]

Money is different than bitcoin. Money belongs to the government and they control it. Banks are part of that system. Bitcoin is totally different. The government also has insurance on your money so they guarantee you can't lose it. I don't think they could do that for bitcoin.

Money is everything that can be accepted between people as a medium of exchange. The money of the government is called “fiat”. If we decided to accept mushrooms as a way to transact, we'd essentially consider them money whether we were two people or a billion.

There is no such thing as a "trusted third party" there are just "third parties" in view of things.

I disagree. If I want to make an escrow, I'll choose someone I trust and thus, a trusted third party. When I want to send a message and I don't trust the administrators I won't have to reveal them the content of my message; I'll encrypt it. Thus, they'll simply be third parties.

I think usdc has a feature where they (THE ADMINS) can freeze particular addresses. I'm against that to be quite honest. But I'm all for each individual having soverignty to manage their own funds and freeze them if they had the ability to. THANKS.

How do you understand “freezing”? I do it as followed:  Someone suspends you from transacting your own money while you may have or not told them to.

[PrimeNumber7]

When I want to send a message and I don't trust the administrators I won't have to reveal them the content of my message; I'll encrypt it. Thus, they'll simply be third parties.

This is off-topic in this thread, however even if you are encrypting a message to someone, for most people on this forum, you are trusting that the administrator has not changed the displayed encryption key of the person you are interacting with. For example, I may make public an encryption key, 'ABC', however, it may be changed by the administration to 'DEF' and anytime anyone encrypts a message to encryption key 'DEF', the administration may automatically decrypt the message, store it for later reading, and encrypt the decrypted message to encryption key 'ABC'. Do I think the bitcointalk administration is doing anything like this? No, absolutely not, however, I would not rule it out on other forums, especially DNM forums.

I'm not sure why it is but I don't think I would trust anyone with holding my bitcoin for me.

Okay, good. If you use maximum measures to protect any third party from ever learning your private key, no third party will ever have the ability to spend any of your coin. No one can spend your coin without your private key. Your coin will be frozen until you sign and broadcast a transaction that spends your coin.

Many companies also utilize a "hot wallet" for smaller amounts whose private keys are stored on a computer connected to the internet, and a "cold wallet" for larger amounts whose private keys are stored on devices that never touch the internet. This setup is very similar to what you are asking for, as it is more difficult to spend any coin from the "cold wallet" and spending said coin requires additional steps.

[BlackHatCoiner]

This is off-topic in this thread, however even if you are encrypting a message to someone, for most people on this forum, you are trusting that the administrator has not changed the displayed encryption key of the person you are interacting with.

This includes that the keys have been transacted within this forum's private messaging system. The parties can communicate outside of the forum and exchange their keys there.

[larry_vw_1955]

Okay, good. If you use maximum measures to protect any third party from ever learning your private key, no third party will ever have the ability to spend any of your coin. No one can spend your coin without your private key. Your coin will be frozen until you sign and broadcast a transaction that spends your coin.

I get what you are saying but that's not entirely what I had in mind. I want to able to inactivate the utxos for the address so even if they know the private key, they won't be able to do anything. And I don't wanted to have to trust a 3rd party. So the suggestion below doesn't really help.

Many companies also utilize a "hot wallet"...

I don't want this to involve any other company.

People have suggested using a 2 of 2 multisig wallet that's not what I had in mind either. Although they don't see why it wouldn't do the same exact thing.

Money is different than bitcoin. Money belongs to the government and they control it.

The correct term is "fiat" not money.
Money is any object or verifiable record that is used for payment. So technically money is the bigger category that contains both fiat and bitcoin.

ok boss if you say so but if you read that wikipedia it does say

Money is historically an emergent market phenomenon establishing a commodity money, but nearly all contemporary money systems are based on fiat money.

So that means we can refer to fiat money as simply money. And everyone will know what I'm talking about right?

I disagree. If I want to make an escrow, I'll choose someone I trust and thus, a trusted third party. When I want to send a message and I don't trust the administrators I won't have to reveal them the content of my message; I'll encrypt it. Thus, they'll simply be third parties.

Who's your trusted third party? So we can all use them.

How do you understand “freezing”? I do it as followed:  Someone suspends you from transacting your own money while you may have or not told them to.

that's a bad form of freezing. the kind i'm talking about is initiated by the user themself as a form of protection of assets. there are issues with how to implement something like that but that's another story!


[moderator's note: consecutive posts merged]

[BlackHatCoiner]

Money is historically an emergent market phenomenon establishing a commodity money, but nearly all contemporary money systems are based on fiat money.

Yes, nearly all. Not all.

Who's your trusted third party? So we can all use them.

I have never used a third party for escrowing, I just gave an example. You can find bunch of such services here, though:

• Escrow Service of Bl4nkcode [Active]
• Dream's Marketplace ~ ESCROW SERVICE ($2 MILLION+) ~ Buy and Sell with Crypto
• 💹📈 Royse777🧢: Campaign Management, Translation & Escrow Service 💪🔥

that's a bad form of freezing. the kind i'm talking about is initiated by the user themself as a form of protection of assets.

And do what next? Be able to unfreeze them after a certain period of time? There's locktime for that.

[larry_vw_1955]

And do what next?

Do nothing until I need to unfreeze them and spend something. then freeze them back.

Be able to unfreeze them after a certain period of time?

No just whenever I want to.

There's locktime for that.

You would need to read over the whole thread...

[Pmalek]

I want to able to inactivate the utxos for the address so even if they know the private key, they won't be able to do anything.

Even the solution your bank is offering where you can freeze your credit card is a very basic form of protection. You said it yourself, all you need to do to freeze your card is log in to your online banking account and click the freeze button. That's it.

Why do you feel like that option is safer than creating an additional wallet protected with a separate passphrase? You can then move any coins you want to "freeze" to that new passphrase-protected wallet, and once you want to access them, you "unfreeze" your hidden wallet by entering the correct passphrase.

The passphrase and your banks' freeze option both offer a second layer of security on top of the first layer. The first layer being your credit card number + the CVV, and your seed phrase. Your second layer is the passphrase and your banking login details. Losing the first layer doesn't give anyone access to your money. Losing both, gives anyone who has it full control.

[BlackHatCoiner]

Do nothing until I need to unfreeze them and spend something. then freeze them back.

I think that you haven't understood something very important. The system works autonomously. The nodes have to somehow verify that you're indeed the owner of a certain address whether you want to spend from that address or “freeze” it. So, you'd still have to provide a digital signature for each “freezing” action you made. Thus, “freezing” wouldn't differ from spending outputs.

That's why it can't be implemented with the way you want. A third party is always required.

[larry_vw_1955]

I think that you haven't understood something very important. The system works autonomously. The nodes have to somehow verify that you're indeed the owner of a certain address whether you want to spend from that address or “freeze” it. So, you'd still have to provide a digital signature for each “freezing” action you made. Thus, “freezing” wouldn't differ from spending outputs.

I understand a person can't just spend bitcoin without providing a digital signature belonging to the private key on that address.

That's why it can't be implemented with the way you want. A third party is always required.

We'll see. I'm going to try and cook something up in my laboratory and post when I'm done.