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Flipstarter research: a simple smart contract for assurance payments
However we also said that user experience can be improved in the future by using smart contracts. This is the first article where I would like to explore additional techniques that Flipstarter or anyone can use to build voluntary funding solutions. Future articles will cover more sophisticated techniques or techniques that trade some level of trustlessness for better user experience.
Here is a contract (2020-03 still under review for correctness and safety) that is about as simple as possible for a trustless assurance payment. It allows many independent contracts to be created and then combined in one assurance payment.
Better (a lot better): Users can pay directly to a QR code with any common wallet. However wallets are still not smart enough to understand the parameters of the smart contract and show them to the user. The user has to trust that the address shown by a campaign is doing what they expect.
Better: Pledges are non-revocable until the campaign expires.
Worse: The contract solution requires significant extra implementation complexity due to a lack of infrastructure around creating, funding and redeeming contracts.
Worse: An Anyone-Can-Pay transaction can handle over 500 pledges. Due to the limit on single transaction size (100k Bytes for non-miners) + large smart contract size, a single assurance payment with these contracts can only handle about 100~200 pledges.
The complexity can be handled with time and investment.
The limited number of pledges is an issue because of the effective minimum pledge. For example, for a $100,000 campaign like the current Cash Fusion campaign by bitcoin.com, the effective minimum pledge is about $1,000. Although this reflects reality - that large contributions create the vast majority of the value in a campaign, it is not good for engagement and giving everyone a chance to put skin in the game.
Limited pledges can be solved with two techniques:
More sophisticated contracts, which I will discuss in future articles.
Avoiding the minimum problem by using tiers like common crowdfunding sites. Then we get a more reasonable picture.