Quote from: BoardGameCoin on July 27, 2012, 10:47:03 PM

So, I have a half-technical half-systematic question. As I understand it, bitcoin uses a cryptographic proof of work with a most-work-wins approach to double-spend resolution.

Just to clarify, the blockchain (like a ledger) uses a proof of work in knowing which blocks are added to the chain. That chain then holds the ledger which is used to ensure the coin has not previously been spent. The "most-work-wins" refers to resolution when there are competing branches when there is fork in the blockchain.

So presumably you are considering this only for double spending where the spend in one branch of the fork contradicts the spend in another branch.

Quote from: BoardGameCoin on July 27, 2012, 10:47:03 PM

What are the implications of black-holing any double-spent coins?

The double spend in a competing branch could then be spent with an innocent party. Your black-holing means bitcoins are no longer fungible. Innocents will be harmed. That's bad.

Without a blockchain fork, there are a couple other double spend attacks as well:

Not all double spends attempts are intentional even. Take the scenario where someone who imports their private key from a wallet.dat into Blockchain.info, for example, and then spends the one in blockchain.info. Then the bitcoin-qt is launched but it hasn't caught up on the blockchain and a payment is sent, which happens to spend the coin that was transferred to blockchain.info. That would be a double spend. That can happen seconds apart or months apart.