Quote from: kjj on October 04, 2012, 04:47:54 PM

As far as transactions are concerned, there are no blocks, there is no chain, there is no height. This is not an accident or an oversight. Please search next time.

I think you totally misunderstand my proposal.

Let me explain this way: A user does not fully trust the exchange but he wants to sell his BTC through the exchange. He wants to transfer the BTC to the exchange at the last minute before he sells. However, the exchange requires 6 confirmations to prevent double-spending.

One way to do this is to have a 2-by-2 multisig account, which the exchange owns one of the keys (E), and the user owns the other key (U). The user will send his BTC to this multisig account. When the user wants to sell the BTC later, he sign a transaction by U to send the BTC in the multisig account to an account owned by the exchange exclusively. The exchange will complete the transaction by signing it with E. Since the user is not possible to double-spend, the exchange can accept it with zero confirmation and the user can sell his BTC immediately.

However, if the exchange is completely disappeared, the BTC in the multi-sig accounts will be lost forever. Therefore, we need some "emergency exit mechanism". When the multisig account is setting up, an additional condition is added: (e.g.) "After 1 Jan 2013, the coins in this account can be spent by signature of key U only". That means in the worst case, if the exchange fails tomorrow, the user can get his coins back after 1 Jan 2013.

Of course, in bitcoin world, time is measured by block height, not days. So the condition becomes "after block height > 220000, the coins in this account can be spent by signature of key U only". If the user tries to spend the coins today (block height = 201800) without involving the exchange, the transaction is considered invalid.

And the following notice explains why we need this system:

Quote

GLBSE is offline

For those worried about their bitcoin, please calm yourselves there has been no hack and your coins are safe and all accounted for.

I apologize for the lack of notice and the downtime, but there isn't much choice. We will update our users on Saturday.