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Cleanup comments & removed notes on escrow
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@@ -1,121 +0,0 @@
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NOTE: Not implemented in code, only included as part of the wire protocol for
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future implementation!
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There are multiple R-value hashes supported in HTLCs in the wire protocol. This
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is to support conditional multiparty payments, e.g. 2-of-3 "escrow", which is
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one of the biggest use cases of bitcoin scripting today. An example use case is
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a 3rd party escrow verifies whether a seller should be paid. This design is
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such that the escrow is not a traditional custodial escrow, but instead
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determines who should get the money in the event of non-cooperation.
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In this implementation, we are including *wire protocol support* but not
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writing code yet for 2-of-3, it is to be implemented later. Arbitrary N-of-M
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can be supported with M values higher than 3 and lower than max script size,
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but let's keep this simple for now!
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How it works: Require 2-of-3 R-value preimages (from 3 hashes) in order for the
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HTLC to be fulfilled. For each hop in the payment, it requires this 2-of-3
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condition. The timeout minimum for each hop in the path is at least the minimum
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agreed contractual escrow timeout. This means each hop consumes a higher amount
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of time-value (due to much longer timeouts along all channels in the path),
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which does have greater pressure towards lower hop-distances compared to
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straight payments.
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This is a slightly different way of thinking about things. It's not signatures
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that the escrow produces (or for that matters any of the 3-parties in the
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2-of-3). It's some secret which is revealed to authorize payment. So if the
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Escrow wants the payment to go through, they disclose the secret (R-value) to
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the recipient. If the recipient is unable to produce 2-of-3, after the agreed
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timeout, the sender will be refunded. Sender and receiver can agree to
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authorize payment in most cases where there is cooperation, escrow is only
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contacted if there is non-cooperation.
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Supported in the wire protocol for the uint8 (two 4-bit N-of-M):
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17 (00010001): 1-of-1
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34 (00100010): 2-of-2
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35 (00100011): 2-of-3 [with Recipient being 1 of the two N parties]
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51 (00110011): 3-of-3
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I think the only ones that really matter are 1-of-1, 2-of-3, and 2-of-2. 1-of-2
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and 1-of-3 doesn't make sense if the recipient must consent to receiving funds
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anyway (pushing funds w/o consent is tricky due to pay-to-contract-hash) so
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that's basically a 1-of-1.
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Assume the order in the stack is Sender, Escrow, Recipient.
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For PAID 2-of-3 Escrow+Recipient, the HTLC stack is:
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<BobSig> <0> <EscrowPreimageR> <RecipientPreimageR> <0>
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If it's REFUND because 2-of-3 has not been redeemed in time:
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<AliceSig> <1>
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Script (we use OP_1/OP_0 to distinctly show computed true/false. 0/1 is for
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supplied data as part of the sigScript/redeemScript stack):
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-------------------------------------------------------------------------------
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//Paid
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OP_IF
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<CSVDelay> OP_DROP OP_CSV
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//Stack: <BobSig> <0> <EscrowPreimageR> <RecipientPreimageR>
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//Recipient must agree to receive funds.
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OP_HASH160 <RecipientHash> OP_EQUALVERIFY
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//Stack: <BobSig> <0> <EscrowPreimageR>
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//Either the Sender or Escrow must consent for payment
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OP_HASH160 <EscrowHash> OP_EQUAL
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//Stack: <BobSig> <0> <OP_1>
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OP_SWAP
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//Stack: <BobSig> <OP_1> <0>
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OP_HASH160 <SenderHash> OP_EQUAL
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//Stack: <BobSig> <OP_1> <OP_0>
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OP_BOOLOR
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//Stack: <BobSig> <OP_1>
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OP_VERIFY
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<BobPubKey>
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//Stack: <BobSig> <BobPubKey>
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//Refund
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OP_ELSE
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<CSVDelay> OP_DROP OP_CSV
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<HTLCTimeout> OP_DROP OP_CLTV
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<AlicePubKey>
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//Stack: <AliceSig> <AlicePubKey>
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OP_ENDIF
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OP_CHECKSIG
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-------------------------------------------------------------------------------
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Note: It is possible that Alice and Bob may not be Sender, Recipient, nor
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Escrow!
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The result? We can do 2-of-3 escrow payments which refund to the sender after a
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timeout! The Sender and Recipient can agree to redeem and they only need to go
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to the Escrow if there's a dispute. All nodes along the path gets paid or
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refunded atomically, the same as a single-HTLC payment on Lightning.
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Possible Resolution States:
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* Recipient paid: Recipient and Sender provide R-values
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* Recipient paid: Recipient and Escrow provide R-values
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* Sender refunded via timeout: Sender is refunded if Recipient cannot convince
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Escrow or Sender to disclose their R-value before HTLC timeout
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* Payment immediately cancelled and Sender gets refunded: Payment sent in the
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opposite direction enforced by same R-values (if there is sender & receiver
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consent & cooperation to cancel payment)
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Sender+Escrow isn't going to want to push funds w/o cooperation of Recipient.
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However, it's possible to construct a script that way.
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Ta-da! "Smart Contract(TM)" maymay.
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Escrow-enforced immediately refundable payments (2-of-3 can immediately cancel
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a payment) are also possible but requires another payment in the opposite
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direction with the R-value hashed twice (the H becomes the R-value) and funds
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encumbered in the opposite direction, but that's kind of annoying to write...
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it's easier if immediate refund can only occur when both Recipient+Sender agree
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to cancel the payment immediately (otherwise it will wait until the timeout).
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Escrow is only contacted if the recipient needs to redeem and the sender is
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uncooperative so this is still true to the "lazy escrow service" in Bitcoin
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multisig.
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(2-of-2 is also needed for payment cancellation.)
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