Scale BTC on EOS

I have an idea for scaling bitcoin on EOS. Just FYI this a very basic rundown. Let me know what you guys think.

This method can be extended to scale most bitcoin-like cryptocurrencies using any smart contract capable blockchain. It is not limited to bitcoin on EOS. I chose EOS because of two reasons. First, the EOS blockchain has the technical capacity to support a fast and scalable network with no fees. Second, I most agree with the philosophy behind EOS more than other DApp(Decentralized Application) blockchains. (That’s a discussion for another time).

This is how it works:

  1. Allow EOS to communicate with bitcoin (Can be done pretty easily. Am actually working on some smart contracts that will allow for this. I think BPs should the run nodes needed for inter-blockchain communication instead of oracles. Again, for another time.)

  2. Connect bitcoin wallets to EOS (Also not too complicated. Note: Private keys are stored locally, and all signing happens locally)

  3. Bitcoin can now be near-instantly sent to anyone with a wallet on EOS by issuing signed bitcoin transactions as proof of payment(POP). Basically, instead of pushing the btc transaction to the bitcoin network, the signed transaction is pushed onto EOS waiting to be pushed onto the bitcoin network.

  4. The EOS blockchain acts as a temporary ledger. The transaction would be built with no miner fees. So, whoever(whomever?) wishes to push the transaction onto the bitcoin blockchain would be paying the miner fee using Child Pays For Parent (CPFP).

  5. Smart contracts would prevent any double spending within the EOS network, but what about outside the network? Someone can publish a transaction directly to the bitcoin network while the other transaction is waiting to be pushed and cheat the receiver.

  6. To prevent this, we use double spending against double spending. Before sending the POP the user sends a signed guarantee of payment (GOP) transaction to the reciever. The GOP is identical to the POP except it has a miner fee equal to that of the sent amount. Meaning the user must have twice the number of btc as they wish to spend in their wallet. For example, say I want to send 1 BTC, then I must have at least another 1BTC that is not spent. For a minimum of 2 BTC. I know this sounds like a lot to keep as a reserve but the remaining BTC become available as soon as the outstanding payments are broadcast to the bitcoin network. If the receiver doesn’t want to claim their payment just yet, the sender can also use a CPFP to push the transaction onto the blockchain. Twice the amount of reserve is required to make it economically infeasible to try double spending. Meaning, they will lose money if they try to double spend. Even a successful double spend will result in a net lose of funds. The double reserve requirement can be lowered if receivers are willing to shell out more money in fees.

  7. So if all goes well, the GOP becomes invalid when the POP is confirmed. However, if the sender tries to double spend, the receiver can push the GOP with a small additional fee using CPFP to receive their payment.

  8. Then arises the question: What’s preventing the receiver from pushing the GOP instead of the POP? This where the philosophy of EOS becomes important. Basically, their reputation. The need for instant payments is only necessary for instant goods and services. (If there aren’t instant goods or services or a non-trivial sum of money involved you really should be using the actual blockchain and waiting for at least 3 confirmations.) Anyone who provides instant goods or services has some sort of public presence. No rational person would risk their public reputation for something that doesn’t benefit them. (The receiver gets the same amount in the GOP and POP.) Doing so would guarantee loss in future income as their malfeasance becomes public.

I gots A LOT more I want to say but I think the above points get the basic mechanisms across, and I don’t want this to get too long. I am open to discussing the technical and/or philosophical sides of this, so feel free to message me.

Email: sunnyp95@live.com

Tl;dr: Scale bitcoin by using EOS a temporary ledger. Double spending is discouraged using double spending.