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I was just reading about the two following scenarios:

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My understanding is that we have two transactions here that don't follow the usual scriptSig/scriptPubKey situation, and I think transactions like these are sometimes called "contracts". In both cases, some funds were sent to a bitcoin address, so they are valid UTXO's floating around in the UTXO set, but instead of the usual situation where someone just needs to provide 0-knowledge-proof that they have private keys associated with that address, something else needs to be done to "unlock the funds". (find the data, or find a collision).

I have some questions:

  1. How would people (likely power users) even be aware that these funds were out there, and available to be redeemed if they solved the puzzles. Did the creators of the transactions likely announce somewhere (via forums or internet), or could someone with full node / full blockchain build a tool that watches for these types of special PKscripts?
  2. What does it mean in the second photo when it says "Note that while transactions like this are fun, they are not secure, because they do not contain any signatures and thus any transaction attempting to spend them can be replaced with a different transaction sending the funds somewhere else.". It seems to me if someone solved the puzzle they could immediately send the funds to themselves with the standard PKscript. What does it mean the transaction could be "replaced"?
  3. What kind of wallet or software would a power user claiming these funds be using? Certainly one couldn't just hop on a ledger s and try to claim these funds with the solution to the puzzle. It seems you would need more freedom to provide the puzzle solution.

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How would people (likely power users) even be aware that these funds were out there, and available to be redeemed if they solved the puzzles.

As you mentioned, it could be that either the creator of the UTXO publicized it, or someone parsing through blockchain data discovered it (and perhaps then publicized it). In the case of the hash collision bounties, see this bitcointalk thread.

What does it mean in the second photo when it says "Note that while transactions like this are fun, they are not secure, because they do not contain any signatures and thus any transaction attempting to spend them can be replaced with a different transaction sending the funds somewhere else".

If the 'puzzle' to be solved does not involve a zero-knowledge proof, then for the duration of time that the transaction is published to the network but not yet confirmed, anyone watching the mempool would be able to take the scriptsig and attach it to their own transaction, spending the UTXO to an address they control instead.

For example, if there were a UTXO spendable by providing just the number '4' as the scriptsig, then anyone watching the mempool would be able to observe this, and until a transaction spending that UTXO is included in a block, anyone could just create their own transaction with '4' as the scriptsig, to try to claim it first.

The way around this would be to not broadcast the transaction, but instead mine a block which includes the transaction yourself. That way, the zero-knowledge-proof-less scriptsig would never be public knowledge, before the transaction is confirmed.

What kind of wallet or software would a power user claiming these funds be using?

I would guess that to claim really unique puzzle UTXOs you would need to write some simple software to create the transaction for you.

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  • Thank you for your helping me understand! So the types of "power users" that might actually receive these bounties would have probably programmed their own "bitcoin clients" where they have more freedom over transaction details?
    – Prince M
    Mar 12, 2021 at 17:13

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