Topic: distributed escrow (Read 1226 times)

Here it is:

https://bitcointalksearch.org/topic/escrow-750

There are several other old threads discussing distributed/decentralized escrow. Great reads, some of them.

Edit: I believe the upcoming multi-sig features could be used in a very similar fashion.

Satoshi himself talked about implementing a very primitive escrow in the protocol, I thought it was a great idea... better than nothing at least. I'll look for the thread.

holders of key shares don't have to be able to read the key, just to hold it in their client until they are notified / requested to release it


escrow of all anonymous parties, that would be the goal
but i guess this is not quite as good as it seemed yesterday

i thought this could be used to verify bitcoin businesses,
owner escrows part of his capital as a sign of good intentions, and he can still remain anonymous,
his money would be his reputation,
instant reputation, faster start to his busyness

and he escrows to his users

Which can't be used to implement escrows of the kind we usually talk about in Bitcoin— because it results in at least one (and potentially two) parties having complete control of the separated secret (the party who creates it, and the party who recovers it).

Perhaps you should start of by saying what you're trying to accomplish.

do you like the rest of it ?
I  just wanted to mention this idea here, maybe it could be improved.
I know almost nothing about bitcoin under the hood, so I can't know if this is doable,
seemed interesting enough to write it here.

I don't like the sound of that. Sounds like a less distributed system, what if someone DDoSed the trusted nodes?

new fork or just a feature implemented in bitcoin ?

if implemented as new fork :

initial network must start from trusted escrow nodes,
those could be run by developers and forum mods
nodes earn trust points

miners and escrow-ers share the escrow fee,

entrepreneur decides how much money he is wiling to put in public control,
that bitcoin would be considered his default collateral.

he makes an "escrow deposit transaction"
a button in client would create shares of private key for the new escrow deposit,
using shamir's secret sharing scheme ,
for example,
number of created shares = 37
minimum restore collection = 24
those 37 shares are randomly sent one by one to some of the top 50 escrow-ers
all numbers random, with max defined by average network stats

his action is broadcasted as request to miners,

miners verify all changes: escrow coins transactions, shares creation, shares distribution...
 
maybe to limit max number of possible escrow nodes ?
to premine 1000 escrow coins, non-divisible, whole coins, and to limit each node to only 0 or 1 coin state ?
escrow coins would be redistributed every now and then, to the top escrow-ers according to their relative rating,
to make the best possible pool of nodes eligible for future escrow deposits

those nodes that are initially selected by miners to hold parts of key
can later sell that escrow shares to the users of busyness' service,
so if users get screwed, they pool together and release the escrow deposit to themselves, there would have to be some arbitrage, but
this is just an idea to start

escrow nodes earn trust and probability to get an escrow coin by relative online time,
relative response time to release the key share and so on...

users of entrepreneur's service would want those key shares,
they could get the key share if they prove ownership over the wallet that made a deposit to enterpreneurs service,
entrepreneur could in that way effectively get hold of his initial deposit, but could not run away with his users' money
so there is a market, incentive for miners and escrow-ers to continue,
entrepreneur would have to invest more on average, but they would actually get their core of users faster
and they can stay anonymous

new escrow-ers could enter the escrow service by depositing some bitcoin and just like entrepreneur from the beginning,
they would vouch with their bitcoin not to run away with the key or not to destroy it
they build reputation points in time, and climb to the top escrow-ers to get (bigger) share of profits

to release or end the escrow, depositor makes a request, it is sent to all escrow-ers involved, they then release their part of the key,
risking their reputation and their own deposit, if they do not respond or release before the arbitrage is done.

to prevent a collective attack on depositor, if private key is constructed before depositors approval ,
there is waiting period for funds to be released and they can go only to miners ?
 
the level of trust would be much higher than now
and the demand for bitcoin would also increase

I do not know much about mechanics of bitcoin, so if this is interesting or controversial,
sort it out between yourselves, don't ask me anything
 
this could be used for lending, or could be used by
entrepreneurs to emit ipo-s and dividends payouts, like distributed glbse...