Hourglass V2 Update

[Mike Casey]

In response to feedback, the Hourglass proposal to mitigate against potential mass liquidation of P2PK funds has been enhanced to further limit spend amounts from such outputs to only 1 bitcoin per block.

https://github.com/cryptoquick/bips/blob/hourglass-v2/bip-hourglass-v2.mediawiki

Prior discussion of the original Hourglass proposal:

https://groups.google.com/g/bitcoindev/c/zmg3U117aNc/m/lDCMs9j7EAAJ

Thoughts & feedback welcome!

[Light]

Bitcoin should not have an in-protocol plunge protection mechanism, and certainly not one that artificially restricts people's ability to spend their coins. I encourage you to withdraw this proposal, for the sake of bitcoin's integrity and utility as a p2p electronic cash system.

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[Jameson Lopp]

Bitcoin is ultimately a system of rules that are enforced by those who use the system and hold the keys to spend UTXOs. As such, if a sufficiently large cohort of economic power within the system is interested in protecting itself against massive liquidation events from malicious actors who arguably are not the rightful owners of UTXOs, the incentives are in place for them to do something about it.

I like Hourglass V2 a lot more than V1. My primary complaint is that 1 BTC per block is somewhat arbitrary. It would be interesting to point to the on-chain statistics of what P2PK UTXO spend volume we have seen in recent years.

Additionally, in the context of my own migration BIP, Hourglass V2 could be complementary to the concept of offering a ZK quantum safe spending option for folks who fail to migrate UTXOs to quantum safe scripts before a set deadline, given that these old P2PK outputs do not belong to HD wallets and thus the owners would be incapable of constructing a ZK proof of HD wallet ownership.

To view this discussion visit https://groups.google.com/d/msgid/bitcoindev/57bd09bc-1c1b-4605-82f9-65b6b61cf8a2%40app.fastmail.com.