Sybil resistance in different coinjoin implementations

The discussion revolves around the intricacies of hedging as a strategy to mitigate the costs associated with timelocking bitcoins, particularly in the context of defending against system attacks. Hedging, by opening a short position in quarterly futures with minimal leverage, allows an individual to safeguard against the volatility of bitcoin's value. This method does not eliminate the inherent "opportunity cost" of timelocking coins, which represents the financial sacrifice of not being able to utilize these funds elsewhere during the lock period. Despite the reduction in volatility-related costs through hedging, the primary expense—the opportunity cost—remains significant. This cost is underscored by the fact that an attacker would only need to acquire 2 BTC and could benefit from transaction fees as a maker in coinjoin, thereby highlighting the nuanced financial dynamics at play.

Further exploration into calculating the costs of such security measures reveals a consideration of age and value restrictions to enhance the cost-effectiveness of the approach. The dialogue suggests a formula involving the age and value of transactions, though the exact parameters remain uncertain. This conversation points towards an ongoing search for an optimal formula to assess costs accurately, reflecting the complexity of balancing security needs with financial prudence.

The concept of non-linearity in cost imposition emerges as a pivotal theme, suggesting that varying the cost based on the age and amount of unspent transaction outputs (UTXOs) could significantly deter low-level, systematic abuses of the system without imposing undue burdens on regular users. This idea draws inspiration from the hashcash protocol, which effectively combats email spam by making the cost of sending bulk unsolicited emails prohibitively high, yet negligible for ordinary use. The communication underscores the potential of applying similar principles to protect systems while maintaining user privacy, emphasizing the goal of creating a deterrent that scales dramatically with the intensity of the attack, thereby offering a nuanced mechanism for enhancing system security against both widespread and targeted threats.