rich1.0npub16dt55fpq3a8r6zpphd9xngxr46zzqs75gna9cj5vf8pknyv2d7equx4wrdhttps://nostr.ae/npub16dt55fpq3a8r6zpphd9xngxr46zzqs75gna9cj5vf8pknyv2d7equx4wrdnjumphttps://nostr.ae📅 Original date posted:2023-05-24 🗒️ Summary of this message: The Ark protocol involves an Ark service provider broadcasting a new unconfirmed on-chain transaction every 5 seconds, with three outputs. Bob can deposit 1 BTC with Alice and they both sign the PSBT, which is broadcast. Bob can unilaterally withdraw or collaboratively withdraw the funds. 📝 Original message:Hi Burak, Thanks for this really interesting protocol! I tend to analyze complicated ideas like this by writing about them in my own words, so I've pasted my summary of your idea to the end of this email in case it's useful, either to other people or to you in helping understand my one concern. My concern is the same one I think Olaoluwa Osuntokun mentioned on Twitter[1] and (less clear to me) might be related to ZmnSCPxj's concern[2]: It seems to me that receiving a payment on the protocol, including conditional payments using HTLC, PTLC, or Anchor-TLC, requires waiting for the transaction containing that payment to confirm to a sufficient depth (e.g., I'd wait 6 blocks for small payments and longer for huge payments). Am I missing something? My summary of how I think that part of the protocol works is in the sections labeled "Make an unconditioned payment" and "Make a conditional payment" below. In short, it's clear to me how the service provider and the customer can make instant atomic swaps with each other---they can either spend instantly cooperatively, or they have to wait for a timeout. But how can a receiver of funds be assured that they will actually get those funds unless there's already a timelock and cooperative spend path placed on those funds? -Dave Rough initial summary of Ark protocol: Alice runs an Ark service provider. Every 5 seconds, she broadcasts a new unconfirmed onchain transaction that pays three outputs (the three Cs): 1. *Change Output:* money not used for the other two Cs that gets sent back to the the transaction creator. 2. *Connector Output:* an output that will be used in a future transaction created by Alice as protection against double spends. 3. *Commitment Output:* a CTV-style commitment to a set of outputs that can be published later in a descendant transaction (alternatively, the commitment output may be spent unilaterally by Alice after 4 weeks). Bob wants to deposit 1 BTC with Alice. He sends her an unsigned PSBT with an input of his and a change output. She updates the PSBT with a commitment output that refunds Bob the 1 BTC and a connector output with some minimum value. They both sign the PBST and it is broadcast. We'll ignore fees in our examples, both onchain transaction fees and fees paid to Alice. From here, there are several things that Bob can do: - *Unilaterally withdraw:* Bob can spend from the commitment output to put his refund onchain. The refund can only be spent after a 24-hour time delay, allowing Bob to optionally come to an agreement with Alice about how to spend the funds before Bob can spend them unilaterally (as we'll see in a moment). For example, the script might be[3]: pk(B) && (older(1 day) || pk(A)) - *Collaboratively withdraw:* as seen above, Bob has the ability to come to a trustless agreement with Alice about how to spend his funds. They can use that ability to allow Bob to trade his (unpublished) UTXO for a UTXO that Alice funds and broadcasts. For example: - Alice creates an unsigned PSBT that uses as one of its inputs the connector from Bob's deposit transaction. This will ensure that any attempt by Bob to double-spend his deposit transaction will invalidate this withdrawal transaction, preventing Bob from being able to steal any of Alice's funds. Also included in Alice's unsigned PSBT is another connector output plus the output that pays Bob his 1 BTC. - Bob receives Alice's unsigned PSBT and creates a separate PSBT that includes his unpublished UTXO as an input, giving its value to Alice in an output. The PSBT also includes as an input the connector output from Alice's PSBT. This will ensure that any attempt by Alice to double spend her transaction paying him will invalidate his transaction paying her. - Bob signs his PSBT and gives it to Alice. After verifying it, Alice signs her PSBT and broadcasts it. - *Collaboratively trade commitments:* as mentioned, the commitment output that pays Bob may be claimed instead by Alice after 4 weeks, so Bob will need to either withdraw or obtain a new commitment within that time. To trade his existing commitment for a new commitment looks similar to the collaborative withdrawal procedure but without the creation of an immediately-spendable onchain output: - Alice creates an unsigned PSBT that uses as one of its inputs the connector from Bob's deposit transaction, again preventing double spending by Bob. Alice also includes a new connector and a new commitment that again allows Bob to later claim 1 BTC. - Bob receives Alice's PSBT and creates a PSBT transferring his existing commitment to her, with the new connector again being included as an input to ensure atomicity. - Bob signs; Alice signs and broadcasts. - *Make an unconditioned payment:* using the mechanisms described above, it's possible to make either an onchain payment or an offchain payment---just have Carol receive the new output or commitment rather than Bob. That payment would have no conditions (except its atomicity). - *Make a conditional payment:* imagine that Carol knows a secret (e.g. a preimage) that Bob is willing to pay for. - Alice creates an unsigned PSBT depending on the connector from Bob's deposit transaction and creating a new connector. The PSBT includes an output paying Carol (either onchain or via a commitment) with an HTLC, allowing Carol to claim the funds if she reveals the secret or allowing Bob to claim the funds after a timeout. - Bob receives Alice's PSBT and creates a PSBT transferring his existing commitment to her with the HTLC condition attached and, again, with connectors being used to ensure atomicity. - Bob signs; Alice signs and broadcasts. - Carol can settle her HTLC by either revealing the secret onchain or by trading her commitment containing the HTLC clause for a commitment from Alice that doesn't contain the clause (which Alice will only accept by learning the secret, since Alice has to settle with Bob). Alice can then either settle onchain or trade commitments with Bob after giving him the secret. - *Do nothing for 4 weeks:* if Bob does nothing for four weeks, Alice can claim the funds from the commitment output (i.e., takes his money). If Bob did actually do something, and if every other user who also had an unpublished output in the commitment transaction did something, then they all exchanged their portion of the funds in this output to Alice, so Alice can now claim all of those funds onchain in a highly efficient manner. Regarding the connector outputs, although all of the examples above show Alice directly spending from the connector output in Bob's deposit transaction, atomicity is also ensured if Alice spends from any output descended from Bob's connector output. Connector outputs from different deposits can be used as inputs into the same transaction, merging their histories. This allows all operations made by Alice to be fully atomic, ensuring that she doesn't lose any money during a reorg of any length. Users are not so well protected during reorgs, e.g. if Bob double-spends a transaction whose funds were later used in a payment to Carol, then Carol loses the money. For this reason, Alice will probably want to prove to users that no funds they receive in a payment derive from any deposit less than safe_confirmation_depth blocks. [1] https://twitter.com/roasbeef/status/1661266771784126464 [2] https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2023-May/021710.html [3] https://min.sc/#c=pk%28B%29%20%26%26%20%28older%281%20day%29%20%7C%7C%20pk%28A%29%29