Smooth's point is that in a "segregated witness" block chain design where ordering of confirmations can be ambiguous due to the inability to prove propagation, then any threat of a penalty (e.g. confiscating a deposit) against a provably fraudulent instant confirmation node (which is a masternode in Dash) would be futile because for example the attacker who is in control of that fraudulent node could have shorted the coin and thus be profiting on the attack more than the cost of the penalty.

I agree smooth that is entirely correct. And it guarantees eventual failure for any "segregated witness" design that is vulnerable to double-spending and using only penalties to hope to disincentivize such attacks.

Fortunately I discovered the solution to foil such attacks and double-spend threads in my instant confirmation design. I am contemplating whether I should describe all the details of my design now or wait. I think I better wait, else Evan @ Dash might try to copy me and claim it was his own.

But suffice it to say that the confirmations have to be provably ordered even without being confirmed with PoW.   That is sort of tricky statement I have made, because we know that any ordering that is not confirmed by PoW is not consensus consistent. But again I already explained to monsterer how I can assure consensus (and remove the 50% attack and reduce electricity cost to a miniscule level!) as long as there are no ambiguous double-spend conflicts. They key word is in red color obviously.

Now I say let's bring this design to market pronto! And conquer the world.