8

When I send a transaction to someone and it is mined by the network the Monero transaction becomes irreversible.

Within the contest of irreversible transactions what benefit would I as a sender have to create a transaction with a required waiting period before the recipient could spend the Monero?

9

Normally it is used in one of two cases:

  1. Unlock time for [link generating transaction] prevents the loss of money (due to transactions invalidation) in case of fork. Since generating transaction can not be included in any other block (in contrast to usual transaction), it's outputs become invalid, so as any following transactions that use them.

  2. For personal reasons a sender may want to specify the time when the money can be redeemed by the receiver.

Source: https://wiki.bytecoin.org/wiki/Unlock_time

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11

Setting an unlock time has many possible uses such as but not limited to:

  1. Scheduling annuity payments
  2. Providing a child with spending money for an upcoming vacation while ensuring it cannot be spent before the vacation is scheduled.
  3. Paying a developer a significant amount of Monero for work being performed now without the fear that the Monero will immediately be dumped on the market.
  4. Alzheimer patient wanting to codifying desires of a will without fear of being convinced to change them later when having diminished mental capacity.
  5. Scheduling the unlocking of monthly child support payments several years in advance to avoid any worries about forgetting or being short on funds at a later date.
  6. Negotiating better loan rates because payments have been guaranteed in advance.

Transaction unlock time does not actually restrict the transaction from being included in a block like with the CLTV Bitcoin feature. Instead it sets a time period before which such a subsequent transactions which can spend it's outputs.

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  • 1
    Very interesting. However, a number of those end up being non cancellable (eg, annuity stops at death of the person). I'm not sure the current Monero lock time makes much sense apart from the current use for new outputs (both transactions and coinbase). – user36303 Jul 28 '16 at 19:18
5

The main use is as Commitment Devices; that is when you (or someone else) don't trust yourself with your own short term decisions and impulsiveness. For example:

1) Compulsory savings plan: you, or your employer, puts (perhaps automatically) part of your income in an output that is locked for some time, maybe for your retirement or other similar goal;

2) Weak hands: perhaps you see Monero's price getting volatile and dip for no particularly good reason, and you had told yourself that your goal was to hold it for a long period of time, but now you are afraid you may panic sell your position. You trust your rational self analysis better than your emotional self, so you send part of your holdings to an output that can only be spent, say, a year from now, when you hope the worst will be past;

3) You are dying and would like to leave your money to your teenage kid, who never dealt with money before. You could make it so that he/she would get, for example, a tenth of the money every year, for the next ten years.

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