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Dispute Mediation

The aforementioned process of making deposits (see Section 8.2.5.1) can be inherently extended to deal with dispute mediation. For instance, A and B can agree on a neutral dispute meditator M. Here, all transactions issued by A can be constructed so that they can be spent using the signatures of any two out of the three parties: A, B, and M. We can now distinguish the following cases: 1

In case of a successful interaction between A and B, then the transactions will be spent as agreed in the contract.

2. In case some issue arises between A and B, then M acts as a mediator. If M aligns with A, then the transactions will not be spent. Otherwise, if M agrees with B, then the transactions will be spent to B’s output address.

Managing Multiuser Funds

Bitcoin additionally enables different users to collaboratively raise funds for any given project without the need for an external arbiter, for example, to handle disputes (see Section 8.2.5.2). For instance, assume that different entities Ai,..., An decide to collaboratively raise funds of v BTCs in order to support a project. In this case, it is required that if v BTCs could not be jointly raised, then the funds committed by each entity should be reimbursed.

In this case, each of the entities A®, Vi G [1, n] can issue a transaction committing v1 < v of BTCs from one of their inputs to spend v BTCs to a common output address B. Clearly, this is not a correct transaction since the input amount is less than the output amount. The intuition here is that the input script is signed in such a way to allow an aggregator to combine all the various transactions issued by the different entities in a multi-input single-output transaction provided that at least v BTCs were raised by these entities; that is, the transaction is only valid if and only if ^П=1 v® = v. This can be achieved using the SIGHASH_ALL||SIGHASH_ANYONECANPAY that signs the entire transaction except any signature scripts, preventing modification of the signed parts. More detail about this process can be found in [20].

 
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