Coingaming releases white paper on double-spending

Coingaming releases white paper on double-spending

Thursday, August 3, 2017 Posted by Luke Massey
Coingaming Group
The company's backend developer has authored the paper

Erich Ertsu, the backend developer at Bitcoin-led operator Coingaming Group, has authored a white paper on ‘double-spending’, focused on removing a “closable loophole in the system”.

The paper, ‘Disincentivizing Double-Spending by Making it Unprofitable’, includes a solution for the issue of double-spending attacks on payments, which if solved would allow bitcoin businesses to be more efficient by reducing costs associated with fraudulent activity.

Ertsu is proposing “loading the double spend TX with so many miner fees that it becomes unprofitable”, which according to the paper is a viable solution so long as “the adversary is not a miner and miners, in general, remain greedy for TX fees”.

His solution is a way of using the free market, in which bitcoin users protect themselves from fraudulent activity by waiting on confirmation for payments, in such a way that makes fraudulent activity unprofitable to the potential adversary.

“Although double-spending is negated for confirmed transactions within bitcoin, I believe it should be a priority to reduce the threat of fraud utilising unconfirmed transactions which at present, we only have a temporary workaround for; raising the block limit,” Erstu told TotallyGaming.com.

“This is a key issue within the industry as merchants continue to lose out to fraudsters taking advantage of, in my opinion, a closable loophole in the system, and I hope this white paper will push the discussion on.

“The Coingaming Group will continue to consider opportunities and potential product developments to improve the bitcoin and blockchain environment, and we look forward to hearing from our peers in the cryptocurrency community on their reaction to this white paper.”

Totally Gaming says: This concept continues to have a significant knock-on effect for profitability and competitiveness within the industry, as perpetrators successfully spend the same money more than once as a transaction is confirmed on the blockchain. Erstu believes this paper, released to the wider cryptocurrency community, is a “significant breakthrough” in mitigating lost revenues associated with double-spending.

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