The Protocol

The protocol was inspired by Namecoin’s protocol but is more simple, yet more secure. The protocol is designed for the aliasing of Bitcoin addresses and not for arbitrary key-value storage (like Namecoin does). Similar to Namecoin’s protocol, the registration of an alias consists of two steps and is done in a decentralized way on top of the Bitcoin blockchain.

In short: One alias always points to one Bitcoin address: ALIAS -> ADDRESS. Four different transactions get defined for 1. initializing, 2. registering, 3. transferring and 4. renewing aliases. All transactions must be made from the address which the alias belongs to.

Registering Aliases: 2 Steps in 2 Transactions

Publishing is done via sending two transactions to a special registry marker address [1BitALiasRegistryXXXXXXXXXXXYP9R77] each with at least 0.0001 BTC (together about 5 cents | registration fee) in the following way:

Transaction [ALIAS_INIT]: Publish the signature of your alias on the Bitcoin blockchain. Sign your alias with your private key which corresponds to your Bitcoin address (first input). Transaction [ALIAS_REGISTER]: After 3 to 30 blocks (~30–300 minutes) publish the actual alias.

Both transactions must further contain an OP_RETURN output as the second output with the data from steps one and two. The bitcoins which get sent to the registry marker address get ‘burned’ and act like a donation to all the Bitcoin network as the total amount of available bitcoins decreases.

Transferring Aliases

Aliases can be transferred to point to another Bitcoin address through publishing a transfer transaction [ALIAS_TRANSFER] on the Bitcoin blockchain. Also, here the registry marker address has to be used but this time without any special fee required. The output to the BitAlias marker address has to be bigger than the current dust limit, though.

On Expiration and Renewals

After the successful registration of an alias it stays valid for one year. It can be renewed through sending a transaction [ALIAS_RENEW] to the registry address, just like the first time. Initially, 0.0002 BTC (~5 cents) buys one year time.

When the fee for extending the validity of the alias is not paid in time, the alias can be registered by whoever is first to claim it.

In case there is a battle for an alias, e.g. because two or more entities get their ALIAS_INIT transactions included into the same blocks right after the alias expired, then the alias gets registered for the address according to following rule: The one with the lowest SHA256-hash(ALIAS_INIT-tx-hash + containing-block-hash) wins!

Adjustment of Fees

Because the bitcoin price fluctuates a lot, BitAlias will need a price adjustment mechanism. Therefore every six months the holders of BitAlias-enabled addresses can vote on-chain for what the fee for the next six month will be. Voting will involve sending a data transaction again, but this time to oneself, so that only the Bitcoin network transaction fee applies. Detailed descriptions will be released in time.