Erich Erstu authors paper outlining solution to issue of fraudulent bitcoin payments
Bitcoin-led operator, the Coingaming Group, has released a major new white paper titled “Disincentivizing Double-Spending by Making it Unprofitable”.
The paper, authored by Erich Erstu, details a potential solution for the issue of double-spending attacks on certain payments, which if solved would allow bitcoin businesses to be more efficient as they reduce the costs associated with fraudulent activity.
Double-spending involves certain parties successfully spending the same money more than once as a transaction is confirmed on the blockchain. This has a significant knock-on effect for profitability and competitiveness within the industry.
Currently, bitcoin users protect themselves from the fraudulent activity by waiting on confirmation for payments, but this in turn takes time and resource.
Erstu proposes a fee market solution to the problem, using miner greed to impair the economic profits of the adversary, which if successful would increase the cost of double-spending so much as it to make it not in the perpetrators interests.
Erich Erstu, Backend Developer at the Coingaming Group, 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.”