Quote from: odolvlobo on June 07, 2024, 11:45:26 PM

Without going into detail, there is little benefit to encumbering the Bitcoin protocol with these new features because your proposal can already be implemented using the current protocol. The transfers would be done using Bitcoin, and the rest would be implemented outside of Bitcoin.

One possibility might be something like a 2-of-3 multisig Lightning channel.

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Without going into detail, there is little benefit to encumbering the Bitcoin protocol with these new features because your proposal can already be implemented using the current protocol. The transfers would be done using Bitcoin, and the rest would be implemented outside of Bitcoin. One possibility might be something like a 2-of-3 multisig Lightning channel.

Thank you for bringing up the potential of using existing Bitcoin technologies such as multisig and the Lightning Network to address issues of unauthorized access and theft. Indeed, these tools offer powerful ways to enhance security and provide mechanisms for dispute resolution without requiring significant changes to Bitcoin's core protocol.

2-of-3 Multisig Approach: Utilizing a 2-of-3 multisig setup could indeed serve as a preventive measure against theft. In this scenario, one key could be held by the user, another by a trusted third party or service, and the third could act as a recovery key in cases of dispute or loss. This setup provides a balance between security and recoverability, allowing transaction reversals under agreed conditions without needing protocol changes.

Lightning Network Channels: The Lightning Network offers another layer of security for transactions that can be reversed within the channel under certain conditions. For instance, a 2-of-3 multisig Lightning channel could facilitate faster dispute resolutions and provide a layer of reversibility for transactions before they are settled on the blockchain.

These solutions, while viable, rely heavily on external enforcement and trust in third parties, which might not align with the decentralized ethos of many Bitcoin users. The proposal aims to integrate a reversible transaction feature directly within the Bitcoin protocol to address these concerns systematically and transparently, ensuring all network participants adhere to the same rules without needing external arbitration.

Moreover, while multisig and Lightning solutions can provide mechanisms for security and dispute resolution, they do not address all cases, especially when transactions are already confirmed on the blockchain. The proposed reversible transaction feature aims to fill this gap, offering a method to contest and potentially reverse confirmed transactions in extreme cases of theft, which are currently irreversible under standard Bitcoin operations.

It's important to weigh the benefits of leveraging existing technologies against the need for new features that might provide a more comprehensive solution tailored specifically for theft recovery. Each approach has its merits and potential drawbacks, and the ongoing community discussion will be crucial in determining the most appropriate path forward.