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This may be jumping the gun but does anyone know how the "half custodian" approach for splitting SegWit2x coins that's mentioned in this Ledger blog post will work?

The relevant text from the blog post is:

The “half custodian” process will involve a new Ledger application created for the Nano S and Blue (it will not be available on Ledger Nano) and will be fully automated. We’ll make available tainted inputs to our users with a contract enforced by the new application that sends back those tainted inputs to us — this is possible because our secure applications distribution architecture allows to securely share a set of keys with our users without revealing it. In other words, our splitting app will take care of everything automatically and with the highest levels of security.

What's a tainted input and a contract enforcing application?

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Relevant info in this answer: https://bitcoin.stackexchange.com/a/62134/51948

A tainted input is referring to an input which is only valid on one chain, not both. Such an input can be created by mixing some coins which were mined after the fork in, making the transaction and all its children invalid on the other fork, and thus allowing those transactions to be further used for splitting other coins too.

It sounds like the "contract enforced by the new application" just means that the ledger application will only sign transactions which send their inputs back to themselves, it isn't just going to let you spend their inputs as well and give you free coins.

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  • So perhaps "half custodian" reflects that the Ledger software will set the nLockTime on the tx. Or perhaps they will take responsibility for broadcasting the tx and make an agreement with a friendly miner to try and get the tx included in a coinbase spending or large block. – sipwiz Nov 7 '17 at 23:33
  • It doesn't need to be included in either the coinbase or a block, it just needs to include some coins from a coinbase transaction at somepoint since the fork. All decedents of a coinbase transaction on one chain are invalid on the other – MeshCollider♦ Nov 8 '17 at 0:00
  • Ah ok. So if Ledger have an agreement with a friendly miner they can get hold of some post-fork coinbase coins to include in the "custodian" transactions. They will still have the 100 block delay but that's less than a day and everyone will probably sit tight for at least that long. – sipwiz Nov 8 '17 at 0:05
  • Correct, that's the most likely situation from what I can tell :) – MeshCollider♦ Nov 8 '17 at 0:20

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