Actually I proposed that idea first, calling it a fidelity bond, and came up with the secure way to sacrifice to fees, announce-commit sacrifices. (Mike is leaving out a lot of details)

That said sacrifice to fees encourages mining centralisation, so I highly recommend that bitcoins be destroyed instead in an OP_RETURN txout.



On 19 May 2014 15:47:28 CEST, Drak <drak@???> wrote:
>You should check out Proof-of-Sacrifice as first proposed by Mike
>Hearn in https://medium.com/bitcoin-talk/d3f9f299f729 - it's worth
>reading.
>
>On 19 May 2014 11:56, Liad Shababo <liad@???> wrote:
>> Have been riffing on this idea for a bit. Would appreciate
>thoughts/feedback
>>
>> Problem:
>>
>> Continued growth of the sharing economy and p2p marketplaces
>necessitates a
>> global distributed and repurposable (real
>name/pseudonymous/anonymous) trust
>> and reputation system. A mechanism is needed which will allow
>strangers to
>> gauge whether to interact/transact with each other across 'n'
>services and
>> use-cases. Trusted Identities would engender trade, relationships,
>> serendipity and more.
>>
>> A possible solution:
>>
>> Proof of burn represents a sacrifice of value in order to establish a
>> trusted identity. By making a trusted identity expensive to obtain it
>can be
>> trusted not to engage in bad behaviour, as doing so would cause the
>identity
>> to become destroyed if tarnished thereby rendering the sacrifice and
>> identity useless.
>>
>> Third parties can easily verify the value sacrificed to establish
>your
>> trusted identity and use it as a proxy to decide whether to:
>>
>> 1) rent their room to you on Airbnb
>>
>> 2) go on a date with you after meeting you on Tinder
>>
>> 3) accept you for a ride on Lyft
>>
>> 4) back your projects on Kickstarter
>>
>> 5) loan you money through crowdlending
>>
>> etc etc.
>>
>> MVP:
>>
>> A web app which generates a verifiably unspendable bitcoin address
>to which
>> you would send an arbitrary amount of btc (proof of burn). The
>service would
>> then link the transaction hash of the payment to an existing online
>identity
>> of your choosing and provide you a profile page which acts as public
>proof
>> of your trusted identity.
>>
>>
>> In the event of bad behaviour, aggrieved parties can leave public
>comments
>> on your proof page for others to see. The service itself would not
>blacklist
>> your identity based on negative feedback, merely display it for
>others to
>> judge as they see fit. (Third party services could create blacklists
>off the
>> data much in the same way SpamAssassin and others do to IP
>addresses). Over
>> time we create a global trust network
>>
>>
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