BitSNARK - Security Assumptions

While many systems rely on a majority vote in a threshold signature scheme for security, BitSNARK provides stronger protection by allowing a single honest agent to prevent abuse by any or all of the other agents. This is referred to as a 1/n (one of many) trust assumption instead of m/n (majority of many).

An initiating agent is required to create a transaction containing an output with a minimum amount of Bitcoin, which is forfeited to any verifier who successfully proves that the transaction is fraudulent. This incentivizes agents to monitor blockchain transactions for opportunities to engage in the verification protocol. The verifier is also required to attach an output to their challenges to penalize verifiers for making challenges in non-fraudulent cases. The result of this mutual incentive scheme is that the cost of engaging in the protocol does not fall on the user of the system; instead, it is covered by the dishonest participant. This “optimistic” approach allows us to keep costs to a minimum.