BITCOIN

Use Bitcoin as cash to fix transaction malleability

TAGs: Bitcoin, Bitcoin Cash, cryptocurrencies

Transaction malleability is a new-old Bitcoin issue that negatively affects the perception of cryptocurrencies in general as it is believed to create problems for the network. But contrary to popular belief, there is a simple solution addresses this concern.

Use Bitcoin as cash to fix transaction malleabilityTransaction malleability allows someone to change a Bitcoin transaction’s unique ID before it’s confirmed on the network, which, in effect, makes it possible for the person to pretend that the transaction didn’t happen. This issue has been cited by the now-defunct digital currency exchange Mt. Gox as the reason why it suspended Bitcoin withdrawals in 2014, and was also mentioned as the basis of attacks against many digital currency platforms.

Complicated proposals have been made to “fix” this issue. SegWit, for instance, promises to solve transaction malleability by not “taking into account signatures when calculating the transaction’s fingerprint.” But why settle on complex and convoluted methods, when the answer is simple: use Bitcoin as a cash system.

“Once we move past the unfounded FUD [fear, uncertainty and doubt] that has been oversold as a scaling issue (and seems more to be a method to extract value from Bitcoin into Alt-Coins) we start to see that Bitcoin was designed to work as cash and when it is used this way, it works best,” Dr. Craig Wright, chief scientist of nChain, wrote in a blog post.

Bitcoin was designed with the idea of splitting and re-joining transactions in mind, according to Wright. The concept can be read in Section 9 of the Bitcoin whitepaper, which states that “fan-out, where a transaction depends on several transactions, and those transactions depend on many more is not a problem here.”

Bitcoin has proven to be an effective tool in ensuring that online gambling operators will reliably deliver services to their customers, especially since governments around the world have been blocking website domains or targeting operators’ access to traditional payment processing channels in a bid to prevent these merchants from accessing their markets.

For online merchants, particularly in the gaming industry, wanting Bitcoin commerce (bComm) solutions there is no need to look for complicated solutions to these “so-called” issues with Bitcoin. The solution, after all, is simple, according to Wright.

“If we start to think of Bitcoin as a cash system again, we can start to think of using it as cash would have been used and how cash is still used in countries like Japan where it is common and remains unsuppressed,” Wright said.
Read Dr. Wright’s blog post, “Spending the simple way in Bitcoin Cash,” here.

Comments

views and opinions expressed are those of the author and do not necessarily reflect those of CalvinAyre.com