Definition
A fidelity bond is a mechanism in which Bitcoin value is deliberately sacrificed or locked up to make a cryptographic identity expensive to obtain, in a way that can be proven to third parties. The sacrifice is what gives the identity weight: anyone can verify on-chain that real value was committed, so creating many fake identities becomes prohibitively costly. Fidelity bonds are best known from JoinMarket, where they protect the CoinJoin market from Sybil attacks, and are standardized in BIP-46.
How the sacrifice is made
The most common construction sends coins to a time-locked address using the OP_CHECKLOCKTIMEVERIFY opcode, so the funds cannot move until a chosen future date. Nothing is burned permanently; the thing being sacrificed is the time-value of the locked money. A longer lock for a larger amount produces a more valuable bond. Participants advertise the bond and prove ownership of the locked output without giving up control of the coins.
Sybil resistance in practice
In JoinMarket, takers preferentially route CoinJoins to liquidity providers who post more valuable bonds. To dominate the market and deanonymize users, an attacker would have to lock up an enormous amount of Bitcoin for a long period, an order of magnitude more capital than a naive identity-flooding attack would cost. Published estimates put a high-confidence Sybil attack in the tens of thousands of BTC locked for months. This shifts the economics decisively toward honest participants.
Fidelity bonds illustrate a recurring sovereignty theme: using Bitcoin's own scarcity to bootstrap trust without a central registrar. They complement other trust-minimized constructs such as the Bitcoin federation model.
In Simple Terms
A fidelity bond is a mechanism in which Bitcoin value is deliberately sacrificed or locked up to make a cryptographic identity expensive to obtain, in…