There don't seem to be too many technicalities in this proposal, which makes it very readable and easy to understand. I must first commend you for the hard work in putting this proposal together. I am a none developer, but I have understood everything in the best way I can, so do well to correct me if I misunderstood anything.
Final Reflections
While introducing reversible transactions into Bitcoin introduces a paradigm shift, it is a thoughtful response to the ongoing challenges of theft within the cryptocurrency space. By carefully balancing the core principles of Bitcoin with the practical needs of its users, this proposal aims to foster a safer, more resilient network for all participants.
One thing that makes people like Bitcoin is its level of decentralization, security, transparency, and immutability. Bitcoin theft is rampant, but the introduction of this proposal if accepted by the community, will reduce the level of decentralization and trigger centralization.
Bitcoin, as we all know is pseudonymous, which means transactions can be traced, but the real identities of the owners are not revealed. If the reversibility of transactions is added, we would see more influence from the government and agencies, as the power to halt anyone's transaction would be possible. Transaction reversibility wouldn't be used only for the specified purposes but would be
exploited beyond that,
trust me.
This is unlike banks that can perform reversibility with ease because they are centralized. Filing a complaint about a false transaction would be handled in a centralized way, which would require you to provide lots of details about yourself and prove you didn't initiate the transaction. In most cases, you have to visit the bank in person to clarify your claims. This is why implementing the same on Bitcoin, where there is no central authority, would be very difficult to manage.
I also think that this implementation will cause massive problems for the community, resulting to trust issues between all Bitcoin holders, miners, and developers.
I also think that the implementation might not work for everyone if it were to happen. Only major attacks involving massive amounts would be considered. Just imagine someone stole your 0.1 BTC. Would you expect massive action compared to when an exchange loses 120,000 BTC?
The only solution to solving this is never to introduce it in any way. This will reduce the pressure and opportunity for manipulation from the government or other parties. It is also a clear way of saying NO to centralization.
- Private Key Security: Private keys are the linchpin of user security in the Bitcoin network. They are targets for malicious actors because their compromise grants access to the user's funds.
- Exchange Security: Despite improvements over the years, many exchanges still suffer from security flaws that can be exploited by hackers.
- Phishing and Social Engineering: Users can be deceived into giving away sensitive information, leading to the theft of credentials and funds.
The issue of fund theft through various means has been ongoing for a long time and will likely continue. This theft does not only affect Bitcoin but also other valuable assets like alts, fiats, etc. Addressing Bitcoin theft has mainly been to improve wallet security and educate users on how to protect their keys. But there are still loopholes that attackers exploit due to regular discoveries. We can trace these vulnerabilities to the level of security and human error by those who end up being the victims.
My opinion on an instance where the community wants to consider the proposal.Introducing a Community-Driven Reversible Transaction Mechanism
This proposal seeks to introduce a reversible transaction feature into the Bitcoin network that is activated through community consensus. The mechanism enables a system where transactions identified as potentially fraudulent can be temporarily halted and reviewed by a decentralized body of appointed verifiers, herein referred to as Community Verification Nodes (CVNs). This feature aims to mitigate the risks associated with theft by allowing for corrective action, which is currently impossible due to the irreversible nature of Bitcoin transactions.
Just as I said earlier, I really like Bitcoin for its decentralization, immutability, security, and transparency. If we are considering reversible transactions on Bitcoin, then we should determine
at what level this might be possible. Ideally, when a transaction is initiated (whether by an attacker or the real owner), it must be validated, which means it sits in the mempool and waits for its turn. After the completion of its validation, the transaction ends up sealed in a block, which is aligned with other blocks.
There are two points I can pick from that process:
1. There might be a possible chance for reversal when the attacked transaction is in the mempool waiting to be confirmed. This chance might be possible if the victim flags the transaction before confirmation. If the transaction is flagged on time, the attacked transaction should be set aside for clarification.
2. When the transaction is already placed in the block and attached to the chain, then I don't think we should be talking about any transaction reversal.
Am not a developer, which means I won't be part of those making decisions for the approval. I hope to see this as a BIP on the community GitHub, so I can do my follow up on the decisions taken. You can also share regular update on this thread or board, as I visit here most often .