On Thu, Mar 07, 2013 at 06:00:18AM -0500, Peter Todd wrote:
> It's also notably that auditable off-chain transaction systems are
> vulnerable. All of the trustworthy ones that don't rely on trusted
> hardware require at least some of their on-chain transactions to be
> publicly known, specifically so that the total amount of reserves held
> by off-chain transaction providers can be audited. At best you can use
> Gregory Maxwell's suggestion of maintaining a "reserve" account backed
> by funds that rarely move, where new deposits go to non-public addresses
> and result in the depositor receiving funds from the reserve account,
> but again, if the spendability of those funds is in question, the value
> of the reserve itself is also in question. Additionally miners can block
> fidelity bond sacrifice transactions easily; again a critical
> technologies required to implement some types of off-chain transaction
> systems, as well as for many other purposes.

Oh, and it occured to me: merge-mining is also vulnerable to the exact
same censorship forces. Again, with small blocks running P2Pool is
feasible, and P2Pool does merge-mining just fine. With large blocks it's
easy for the pool to ignore shares that try to merge mine, so your
alt-chains competition is also censored.

-- 
'peter'[:-1]@petertodd.org