Even the unhackable Bitcoin presents certain security flaws as the currency is exchanged with fiat money. One of the leading currency exchange services, Coingaming Group, is stepping out ahead of any such problems that could occur with a potential solution for those operating on the Bitcoin network.
Erich Erstu is a developer for Coingaming. He has penned a white paper for the group that addresses a possible solution for “double-spending attacks” entitled, “Disincentivizing Double-Spending by Making it Unprofitable”.
If implemented, the solution could help Bitcoin businesses reduce the costs associated with fraudulent activity and remain more efficient, and therefore more competitive. Just like it sounds, double spending means using the same money more than once. Product and service providers often provide their wares before a payment is confirmed on the Bitcoin network. Confirmation takes time and resources.
Erstu’s solution involves using the free market in such a way as to make the fraudulent activity unprofitable to cheaters. As with most elegant solutions, Erstu’s is quite simple on its face – load the double-spend TX with so many miner fees that it becomes unprofitable. This appears to be a viable solution as long as, ” the adversary is not a miner and miners, in general, remain greedy for TX fees,” according to the white paper.
In a statement released Monday, Erstu said, “I am excited to release this white paper to the wider cryptocurrency community, and I hope that it will generate constructive discussion about what I feel to be a significant breakthrough in mitigating the lost revenues associated with double-spending.
“At the Coingaming Group, we are always looking to improve both our back-office and customer-facing solutions, and any costs saved through negating fraudulent activity we intend to pass onto the customer in better margins and increased product investment.”
The white paper can be read in its entirety here.