Quote from: BrewMaster on Today at 05:39:49 PM

Sabu tokens...

I have to correct your hypothesis, then explain the scam scenarios.
Lets say Bob owns 1 Bitcoin and sign a valid transaction and send it through the Sabu protocol to Alice. It is a private and encrypted communication and no one will be aware of this agreement.
Now Bob has the fiat money (or goods or services) of Alice, and Alice has a valid signed Bitcoin transaction in her hand. Note that there is nothing like Sabu token! Both Bob or Alice have this transaction and both are able to send it to Bitcoin network immediately (of course if they will).

Scam scenario 1: Bob spends the promised UTXO (a part of this UTXO is promised to Alice) and "wants" to buy something. He spend entire UTXO and pay it to someone else, he signs and sends the cheating transaction to Bitcoin network. And now the initial valid tx Alice had is no longer valid.
As I mentioned in paper, in order to prevent this scenario, the Sabu protocol initially forces Bob to prepare and sign 2 transaction. One is Main transaction(MT) which contains the just balance and the second is the Guarantee transaction(GT) in which both Alice and Bob will lose a portion of their coins in favor of miner fee. If Bob deny the initial agreement and spend the promised UTXO, Alice will be aware of spending same UTXO in few seconds (since Bob has to broadcast new cheating transaction to Bitcoin network, and Alice Wallet watches full-nodes or mining pools through API), So Alice will send the Guarantee transaction to defend herself. Now we are ending in a situation by which there are two(or more) transactions in miners mempool which are using same UTXO. Miners are in business because of money, so they will put the transaction with higher fee in next block. The higher fee payer is the Guarantee Transaction. In this case both Alice and Bob will lose a portion of their money in favor of miners, but the numbers are precisely calculated to rationally hinder both "issuer" and "creditor" from cheating. You can find more detail on https://github.com/raymaot/transaction-numbers-and-coefficients .

Scam scenario 2: Alice send the valid transaction to Bitcoin network.
It is ok too, since the valid transaction contains just and fair outputs for both issuer(Bob) and creditor(Alice), the only barrier is the Bitcoin-transaction-fee which is fixed to 10,000 Satoshi and would be divided between issuer and creditor(s) in proportion to their outputs. So if they like to pay Bitcoin transaction fee (what Sabu is invented to avoid it

) they are free to do it. It is not scam at all.