Note, bitcoin by its nature is poorly compressible, as it contains a lot of incompressible data, such as public keys, addresses, and signatures. However, there's also a lot of redundant information in there, e.g. the transaction version, and it's usually the same opcodes, locktime, sequence number etc. over and over again. I was curious and thought, how much could we actually compress the blockchain? This is actually very relevant: As I established in my previous post about the costs of a 1GB full node, the storage and bandwidth costs seem to be one of the biggest bottlenecks, and that CPU computation costs are actually the cheapest part, as were able almost to get away with ten year old CPUs. Let's have a quick look at the transaction format and see what we can do. I'll have a TL;DR at the end if you don't care about how I came up with those numbers. Before we just in, don't forget that I'll be streaming today again building a SPV node, as I've already posted about here. Last time we made some big progress, I think! Check it out here https://dlive.tv/TobiOnTheRoad. It'll start at around 15:00 UTC!
Version (32 bits)
There's currently two transaction types. Unless we add new ones, we can compress it to 1 bit (0 = version 1; and 1 = version 2).
Input/output count (8 to 72 bits)
This is the number of inputs the transaction has (see section 9 of the whitepaper). If the number of inputs is below 253, it will take 1 byte, and otherwise 2 to 8 bytes. This nice chart shows that, currently, 90% of Bitcoin transactions only have 2 inputs, sometimes 3. A byte can represent 256 different numbers. Having this as the lowest granularity for input count seems quite wasteful! Also, 0 inputs is never allowed in Bitcoin Cash. If we represent one input with 00₂, two inputs with 01₂, three inputs with 10₂ and everything else with 11₂ + current format, we get away with only 2 bits more than 90% of the time. Outputs are slightly higher, 3 or less 90% of the time, but the same encoding works fine.
Input (>320 bits)
There can be multiple of those. It has the following format:
Previous output (288 bits): This specifies which output is being spent by this input. It's the transaction hash (32 bytes), plus the output index within that transaction (4 bytes).The transaction hash is usually a random number. How can we compress that? Well, we already know this transaction and its hash. If it's part of the blockchain, we can uniquely identify it by its block (via blockheight) and its position in that block. We'll list all transaction outputs of the block by whatever order is present for that block (TTOCTOR), and then encode the position of the output in that list. For the blockheight, we can use 4 bytes, which will allow 4 billion blocks (83,781 years) and for the transaction output we can either use 4 bytes (max. 430GB big blocks) or more, but we can use 1 bit as a flag once blocks get really large.So in total, this will be 8 bytes, or 64 bits. If transactions aren't in the blockchain yet but in the mempool, we can use something similar Xthinner uses by encoding only the prefix required to uniquely identify the transaction. But I haven't thought that through yet.
Signature script (≥ 8 bits): As most scripts have a standardized format, we don't have to put the whole script into the input every time. Say there's seven standard formats, then we'd use 3 bits for the format. If all bits are set, the transaction will continue to be serialized in a standard way. The most common transaction type is Pay-To-Public-Key-Hash, which requires a signature and a public key. The signature currently uses the DER format, which can currently be up to 73 bytes, but just actually stores two 32 byte numbers, which can actually be represented with 512 bits. The public key can be compressed to 257 bits, plus 1 to specify if it's compressed in the original transaction. Makes 258 bits.
Sequence (32 bits): For almost all programs, this is FF FF FF FF. We can use 1 bit to determine if it's that number (0), and encode the sequence number ordinarily if not (1).
So in total that 838 bits per P2PKH input, or about 105 bytes.
Output (≥72 bits)
There can be multiple of those. They have the following format:
Value in satoshis (64 bits): Currently, the first 13 bits of this amount will always be 0 (as there's a maximum of 21M BCH), but there's efforts to allow sub-satoshi values in Bitcoin, so we can't rely on that. Also, most of the time, transactions will send much less than 21,000,000 BCH, or even 21 BCH. Therefore, if we encode the sent value separately, we can use integer compression schemes, as outlined in this paper, which achieves between 6 and 16 bits per 32 bit integer (see Table 4, p. 21). I think it's save to assume we can get away with 16 bits if we implement that scheme here.
Public key script (≥8 bits): Here, we can use the same trick as with the input, by having 3 bits for the format. For Pay-To-Public-Hash transactions, we only need 20 bytes or 160 bits for the address.
So in total that is 179 bits per P2PKH output.
Lock time (32 bits)
This is FF FF FF FF most of the time and only occasionally transactions will be time-locked, and only change the meaning if a sequence number for an input is not FF FF FF FF. We can do the same trick as with the sequence number, such that most of the time, this will be just 1 bit.
Interestingly, if we take a compression of 69%, if we were to compress the 165 GB blockchain, we'd get 113.8GB. Which is (almost) exactly the amount which 7zip was able to give us given ultra compression! I think there's not a lot we can do to compress the transaction further, even if we only transmit public keys, signatures and addresses, we'd at minimum have 930 bits, which would still only be at 61% compression ratio (and missing outpoint and value). 7zip is probably also able to utilize re-using of addresses/public keys if someone sends to/from the same address multiple times, which we haven't explored here; but it's generally discouraged to send to the same address multiple times anyway so I didn't explore that. We'd still have signatures clocking in at 512 bits. Note that the compression scheme I outlined here operates on a per transaction or per block basis (if we compress transacted satoshis per block), unlike 7zip, which compresses per blockchain. I hope this was an interesting read. I expected the compression ratio to be higher, but still, if it takes 3 weeks to sync uncompressed, it'll take just 2 weeks compressed. Which can mean a lot for a business, actually.
I'll be streaming again today!
As I've already posted about here, I will stream about building an SPV node in Python again. It'll start at 15:00 UTC. Last time we made some big progress, I think! We were able to connect to my Bitcoin ABC node and send/receive our first version message. I'll do a nice recap of what we've done in that time, as there haven't been many present last time. And then we'll receive our first headers and then transactions! Check it out here: https://dlive.tv/TobiOnTheRoad.
A Beginners Guide to Bitcoin, Blockchain & Cryptocurrency
As cryptocurrency, and blockchain technology become more abundant throughout our society, it’s important to understand the inner workings of this technology, especially if you plan to use cryptocurrency as an investment vehicle. If you’re new to the crypto-sphere, learning about Bitcoin makes it much easier to understand other cryptocurrencies as many other altcoins' technologies are borrowed directly from Bitcoin. Bitcoin is one of those things that you look into only to discover you have more questions than answers, and right as you’re starting to wrap your head around the technology; you discover the fact that Bitcoin has six other variants (forks), the amount of politics at hand, or that there are over a thousand different cryptocurrencies just as complex if not even more complex than Bitcoin. We are currently in the infancy of blockchain technology and the effects of this technology will be as profound as the internet. This isn’t something that’s just going to fade away into history as you may have been led to believe. I believe this is something that will become an integral part of our society, eventually embedded within our technology. If you’re a crypto-newbie, be glad that you're relatively early to the industry. I hope this post will put you on the fast-track to understanding Bitcoin, blockchain, and how a large percentage of cryptocurrencies work.
Altcoin: Short for alternative coin. There are over 1,000 different cryptocurrencies. You’re probably most familiar with Bitcoin. Anything that isn’t Bitcoin is generally referred to as an altcoin. HODL: Misspelling of hold. Dank meme accidentally started by this dude. Hodlers are much more interested in long term gains rather than playing the risky game of trying to time the market. TO THE MOON: When a cryptocurrency’s price rapidly increases. A major price spike of over 1,000% can look like it’s blasting off to the moon. Just be sure you’re wearing your seatbelt when it comes crashing down. FUD: Fear. Uncertainty. Doubt. FOMO: Fear of missing out. Bull Run: Financial term used to describe a rising market. Bear Run: Financial term used to describe a falling market.
What Is Bitcoin?
Bitcoin (BTC) is a decentralized digital currency that uses cryptography to secure and ensure validity of transactions within the network. Hence the term crypto-currency. Decentralization is a key aspect of Bitcoin. There is no CEO of Bitcoin or central authoritative government in control of the currency. The currency is ran and operated by the people, for the people. One of the main development teams behind Bitcoin is blockstream. Bitcoin is a product of blockchain technology. Blockchain is what allows for the security and decentralization of Bitcoin. To understand Bitcoin and other cryptocurrencies, you must understand to some degree, blockchain. This can get extremely technical the further down the rabbit hole you go, and because this is technically a beginners guide, I’m going to try and simplify to the best of my ability and provide resources for further technical reading.
A Brief History
Bitcoin was created by Satoshi Nakamoto. The identity of Nakamoto is unknown. The idea of Bitcoin was first introduced in 2008 when Nakamoto released the Bitcoin white paper - Bitcoin: A Peer-to-Peer Electronic Cash System. Later, in January 2009, Nakamoto announced the Bitcoin software and the Bitcoin network officially began. I should also mention that the smallest unit of a Bitcoin is called a Satoshi. 1 BTC = 100,000,000 Satoshis. When purchasing Bitcoin, you don’t actually need to purchase an entire coin. Bitcoin is divisible, so you can purchase any amount greater than 1 Satoshi (0.00000001 BTC).
What Is Blockchain?
Blockchain is a distributed ledger, a distributed collection of accounts. What is being accounted for depends on the use-case of the blockchain itself. In the case of Bitcoin, what is being accounted for is financial transactions. The first block in a blockchain is referred to as the genesis block. A block is an aggregate of data. Blocks are also discovered through a process known as mining (more on this later). Each block is cryptographically signed by the previous block in the chain and visualizing this would look something akin to a chain of blocks, hence the term, blockchain. For more information regarding blockchain I’ve provided more resouces below:
Bitcoin mining is one solution to the double spend problem. Bitcoin mining is how transactions are placed into blocks and added onto the blockchain. This is done to ensure proof of work, where computational power is staked in order to solve what is essentially a puzzle. If you solve the puzzle correctly, you are rewarded Bitcoin in the form of transaction fees, and the predetermined block reward. The Bitcoin given during a block reward is also the only way new Bitcoin can be introduced into the economy. With a halving event occurring roughly every 4 years, it is estimated that the last Bitcoin block will be mined in the year 2,140. (See What is Block Reward below for more info). Mining is one of those aspects of Bitcoin that can get extremely technical and more complicated the further down the rabbit hole you go. An entire website could be created (and many have) dedicated solely to information regarding Bitcoin mining. The small paragraph above is meant to briefly expose you to the function of mining and the role it plays within the ecosystem. It doesn’t even scratch the surface regarding the topic.
How do you Purchase Bitcoin?
The most popular way to purchase Bitcoin through is through an online exchange where you trade fiat (your national currency) for Bitcoin. Popular exchanges include:
There’s tons of different exchanges. Just make sure you find one that supports your national currency.
Bitcoin and cryptocurrencies are EXTREMELY volatile. Swings of 30% or more within a few days is not unheard of. Understand that there is always inherent risks with any investment. Cryptocurrencies especially. Only invest what you’re willing to lose.
Transaction & Network Fees
Transacting on the Bitcoin network is not free. Every purchase or transfer of Bitcoin will cost X amount of BTC depending on how congested the network is. These fees are given to miners as apart of the block reward. Late 2017 when Bitcoin got up to $20,000USD, the average network fee was ~$50. Currently, at the time of writing this, the average network fee is $1.46. This data is available in real-time on BitInfoCharts.
In this new era of money, there is no central bank or government you can go to in need of assistance. This means the responsibility of your money falls 100% into your hands. That being said, the security regarding your cryptocurrency should be impeccable. The anonymity provided by cryptocurrencies alone makes you a valuable target to hackers and scammers. Below I’ve detailed out best practices regarding securing your cryptocurrency.
Two-Factor Authentication (2FA)
Two-factor authentication is a second way of authenticating your identity upon signing in to an account. Most cryptocurrency related software/websites will offer or require some form of 2FA. Upon creation of any crypto-related account find the Security section and enable 2FA.
The most basic form of 2FA which you are probably most familiar with. This form of authentication sends a text message to your smartphone with a special code that will allow access to your account upon entry. Note that this is not the safest form of 2FA as you may still be vulnerable to what is known as a SIM swap attack. SIM swapping is a social engineering method in which an attacker will call up your phone carrier, impersonating you, in attempt to re-activate your SIM card on his/her device. Once the attacker has access to your SIM card he/she now has access to your text messages which can then be used to access your online accounts. You can prevent this by using an authenticator such as Google Authenticator.
The use of an authenticator is the safest form of 2FA. An authenticator is installed on a seperate device and enabling it requires you input an ever changing six digit code in order to access your account. I recommend using Google Authenticator. If a website has the option to enable an authenticator, it will give you a QR code and secret key. Use Google Authenticator to scan the QR code. The secret key consists of a random string of numbers and letters. Write this down on a seperate sheet of paper and do not store it on a digital device. Once Google Authenticator has been enabled, every time you sign into your account, you will have to input a six-digit code that looks similar to this. If you happen to lose or damage the device you have Google Authenticator installed on, you will be locked out of your account UNLESS you have access to the secret key (which you should have written down).
A wallet is what you store Bitcoin and cryptocurrency on. I’ll provide resources on the different type of wallets later but I want to emphasize the use of a hardware wallet (aka cold storage). Hardware wallets are the safest way of storing cryptocurrency because it allows for your crypto to be kept offline in a physical device. After purchasing crypto via an exchange, I recommend transferring it to cold storage. The most popular hardware wallets include the Ledger Nano S, and Trezor. Hardware wallets come with a special key so that if it gets lost or damaged, you can recover your crypto. I recommend keeping your recovery key as well as any other sensitive information in a safety deposit box. I know this all may seem a bit manic, but it is important you take the necessary security precautions in order to ensure the safety & longevity of your cryptocurrency.
Technical Aspects of Bitcoin
Address: What you send Bitcoin to.
Wallet: Where you store your Bitcoin
Max Supply: 21 million
Block Time: ~10 minutes
Block Size: 1-2 MB
Block Reward: BTC reward received from mining.
What is a Bitcoin Address?
A Bitcoin address is what you send Bitcoin to. If you want to receive Bitcoin you’d give someone your Bitcoin address. Think of a Bitcoin address as an email address for money.
What is a Bitcoin Wallet?
As the title implies, a Bitcoin wallet is anything that can store Bitcoin. There are many different types of wallets including paper wallets, software wallets and hardware wallets. It is generally advised NOT to keep cryptocurrency on an exchange, as exchanges are prone to hacks (see Mt. Gox hack). My preferred method of storing cryptocurrency is using a hardware wallet such as the Ledger Nano S or Trezor. These allow you to keep your crypto offline in physical form and as a result, much more safe from hacks. Paper wallets also allow for this but have less functionality in my opinion. After I make crypto purchases, I transfer it to my Ledger Nano S and keep that in a safe at home. Hardware wallets also come with a special key so that if it gets lost or damaged, you can recover your crypto. I recommend keeping your recovery key in a safety deposit box.
What is Bitcoins Max Supply?
The max supply of Bitcoin is 21 million. The only way new Bitcoins can be introduced into the economy are through block rewards which are given after successfully mining a block (more on this later).
What is Bitcoins Block Time?
The average time in which blocks are created is called block time. For Bitcoin, the block time is ~10 minutes, meaning, 10 minutes is the minimum amount of time it will take for a Bitcoin transaction to be processed. Note that transactions on the Bitcoin network can take much longer depending on how congested the network is. Having to wait a few hours or even a few days in some instances for a transaction to clear is not unheard of. Other cryptocurrencies will have different block times. For example, Ethereum has a block time of ~15 seconds. For more information on how block time works, Prabath Siriwardena has a good block post on this subject which can be found here.
What is Bitcoins Block Size?
There is a limit to how large blocks can be. In the early days of Bitcoin, the block size was 36MB, but in 2010 this was reduced to 1 MB in order to prevent distributed denial of service attacks (DDoS), spam, and other malicious use on the blockchain. Nowadays, blocks are routinely in excess of 1MB, with the largest to date being somewhere around 2.1 MB. There is much debate amongst the community on whether or not to increase Bitcoin’s block size limit to account for ever-increasing network demand. A larger block size would allow for more transactions to be processed. The con argument to this is that decentralization would be at risk as mining would become more centralized. As a result of this debate, on August 1, 2017, Bitcoin underwent a hard-fork and Bitcoin Cash was created which has a block size limit of 8 MB. Note that these are two completely different blockchains and sending Bitcoin to a Bitcoin Cash wallet (or vice versa) will result in a failed transaction. Update: As of May 15th, 2018 Bitcoin Cash underwent another hard fork and the block size has increased to 32 MB. On the topic of Bitcoin vs Bitcoin Cash and which cryptocurrency is better, I’ll let you do your own research and make that decision for yourself. It is good to know that this is a debated topic within the community and example of the politics that manifest within the space. Now if you see community members arguing about this topic, you’ll at least have a bit of background to the issue.
What is Block Reward?
Block reward is the BTC you receive after discovering a block. Blocks are discovered through a process called mining. The only way new BTC can be added to the economy is through block rewards and the block reward is halved every 210,000 blocks (approximately every 4 years). Halving events are done to limit the supply of Bitcoin. At the inception of Bitcoin, the block reward was 50BTC. At the time of writing this, the block reward is 12.5BTC. Halving events will continue to occur until the amount of new Bitcoin introduced into the economy becomes less than 1 Satoshi. This is expected to happen around the year 2,140. All 21 million Bitcoins will have been mined. Once all Bitcoins have been mined, the block reward will only consist of transaction fees.
Any computer that connects to the Bitcoin network is called a node. Nodes that fully verify all of the rules of Bitcoin are called full nodes.
In other words, full nodes are what verify the Bitcoin blockchain and they play a crucial role in maintaining the decentralized network. Full nodes store the entirety of the blockchain and validate transactions. Anyone can participate in the Bitcoin network and run a full node. Bitcoin.org has information on how to set up a full node. Running a full node also gives you wallet capabilities and the ability to query the blockchain. For more information on Bitcoin nodes, see Andreas Antonopoulos’s Q&A on the role of nodes.
What is a Fork?
A fork is a divergence in a blockchain. Since Bitcoin is a peer-to-peer network, there’s an overall set of rules (protocol) in which participants within the network must abide by. These rules are put in place to form network consensus. Forks occur when implementations must be made to the blockchain or if there is disagreement amongst the network on how consensus should be achieved.
Soft Fork vs Hard Fork
The difference between soft and hard forks lies in compatibility. Soft forks are backwards compatible, hard forks are not. Think of soft forks as software upgrades to the blockchain, whereas hard forks are a software upgrade that warrant a completely new blockchain. During a soft fork, miners and nodes upgrade their software to support new consensus rules. Nodes that do not upgrade will still accept the new blockchain. Examples of Bitcoin soft forks include:
A hard fork can be thought of as the creation of a new blockchain that X percentage of the community decides to migrate too. During a hard fork, miners and nodes upgrade their software to support new consensus rules, Nodes that do not upgrade are invalid and cannot accept the new blockchain. Examples of Bitcoin hard forks include:
Note that these are completely different blockchains and independent from the Bitcoin blockchain. If you try to send Bitcoin to one of these blockchains, the transaction will fail.
A Case For Bitcoin in a World of Centralization
Our current financial system is centralized, which means the ledger(s) that operate within this centralized system are subjugated to control, manipulation, fraud, and many other negative aspects that come with this system. There are also pros that come with a centralized system, such as the ability to swiftly make decisions. However, at some point, the cons outweigh the pros, and change is needed. What makes Bitcoin so special as opposed to our current financial system is that Bitcoin allows for the decentralized transfer of money. Not one person owns the Bitcoin network, everybody does. Not one person controls Bitcoin, everybody does. A decentralized system in theory removes much of the baggage that comes with a centralized system. Not to say the Bitcoin network doesn’t have its problems (wink wink it does), and there’s much debate amongst the community as to how to go about solving these issues. But even tiny steps are significant steps in the world of blockchain, and I believe Bitcoin will ultimately help to democratize our financial system, whether or not you believe it is here to stay for good.
Well that was a lot of words… Anyways I hope this guide was beneficial, especially to you crypto newbies out there. You may have come into this realm not expecting there to be an abundance of information to learn about. I know I didn’t. Bitcoin is only the tip of the iceberg, but now that you have a fundamental understanding of Bitcoin, learning about other cryptocurrencies such as Litecoin, and Ethereum will come more naturally. Feel free to ask questions below! I’m sure either the community or myself would be happy to answer your questions. Thanks for reading!
Hi Bitcoiners! I’m back with the twelfth monthly Bitcoin news recap. (Yes I'll keep doing these in 2018) For those unfamiliar, each day I pick out the most popularelevant/interesting stories in bitcoin and save them. At the end of the month I release them in one batch, to give you a quick (but not necessarily the best), memeless overview of what happened in bitcoin over the past month. You can find recaps of the previous months on Bitcoinsnippets.com A recap of Bitcoin in December 2017
dcrd: Several steps towards multipeer downloads completed: an optimization to use in-memory block index and a new 1337 chain view. Maintenance: improved test coverage, upgrading dependency management system and preparing for the upcoming Go 1.11 release. dcrwallet: A big change introducing optional privacy-preserving SPV sync mode was merged. In this mode dcrwallet does not download the full blockchain but only gets the "filters", uses them to determine which blocks it needs and fetches them from random nodes on the network. This has on-disk footprint of 300-400 MB and sync time of minutes, compared to ~3.4 GB and sync time of hours for full sync (these are rough estimates).
jy-p: the server side of SPV (in dcrd) was deployed in v1.2.0, the client side of SPV (in dcrwallet) is in our next release, v1.3.0. Still some minor bugs in SPV that are being worked out. There will be an update to add the latest features from BIP 157/158 in the next few months. SPV will be optional in v1.3.0, but it will become the default after we get a proper header commitment for it (#general)
Decrediton: besides regular bugfixes and design improvements, several components are being developed in parallel like SPV mode, Politeia integration and Trezor support. Politeia: testing started on mainnet, thanks to everyone who is participating. A lot of testing, bugfixing and polishing is happening in preparation for full mainnet launch. There are also a few missing features to be added before launch, e.g. capacity to edit a proposal and versioning for that, discussion to remain open once voting starts. Decrediton integration is moving forward, check out this video for a demo and this meta issue for the full checklist. Trezor: Decrediton integration of initial Trezor support is in progress and there is a demo. Android: app design version 2.0 completed. dcrdata: development of several chart visualizations was completed and is awaiting deployment. Specifically, voting agendas and historic charts are merged while ticket pool visualization is in testing. atomicswap: @glendc is seeking reviews of his Ethereum support pull request. Dev activity stats for July: 252 active PRs, 220 master commits, 34,754 added and 12,847 deleted lines spread across 6 repositories. Contributions came from 6-10 developers per repository. (chart)
Hashrate: the month started at 40.5 and ended at 51.6 PH/s, with a low of 33.3 and a new all time high of 68.4 PH/s. F2Pool is leading with 40-45%, followed by the new BeePool at 15-25% and coinmine.pl at 18-23%. Staking: 30-day average ticket price is 92.6 DCR (-2.1). The price started the month at 94.6 and quickly retreated to month's low of 85 until 1,860 tickets were bought within a single period (versus target 720). This pushed the pool of tickets to 41,970 (2.5% above target), which in turn caused 10 price increases in a row to the month's high of 100.4. This was the highest ticket price seen on the new ticket price algorithm which has been in effect since Jul 2017. Second half of the month there was unusually low volatility between 92 and 94 DCR per ticket. Locked DCR held between 3.75 and 3.87 million or 46.6-48.0% of supply (+0.1% from previous peak). Nodes: there are 212 public listening and 216 normal nodes per dcred.eu. Version distribution: 67% on v1.2.0 (+10%), 24% on v1.1.2 (-1%), 7% on v1.1.0 (-7%). Node count data is not perfect but we can see the steady trend of upgrading to v1.2.0. This version of dcrd is notable for serving compact filters. The increased count of such full nodes allows the developers to test SPV client mode in preparations for the upcoming v1.3.0 release.
Obelisk posted three updates in July. For the most recent daily updates join their Discord. New miner from iBeLink: DSM7T hashes Blake256 at 7 TH/s or Blake2b at 3.5 TH/s, consumes 2,100 W and costs $3,800, shipping Aug 5-10. There were also speculations about the mysterious Pangolin Whatsminer DCR with the speed of 44 TH/s at 2,200 W and the cost of $3,888, shipping November. If you know more about it please share with us in #pow-mining channel.
emiliomann: stakebrasil is one of the pools with the lowest number of missed and expired tickets. It was one of the first and has a smaller percentage than the most recent ones who haven’t had the time to do so. (...) The Brazilian pool should be the one with the more servers spread around the world: 6 to decrease the latency. This is to explain to you why the [pool fee] rate of 5% (currently around 0.06 DCR) on the reward is also one of the highest. girino: 8 voting wallets now. I just finished setting up a new one yesterday. All of them in different datacenters, 3 in europe, 3 in north america, 1 in brazil and one in asia. We also have 3 more servers, 1 for the front end, one for "stats" and one for dcrdata. (#general)
On the mining side, Luxor started a new set of pool servers inside mainland China, while zpool has enabled Decred mining. StatX announced Decred integration into their live dashboard and public chat. Decred was added to Satowallet with BTC and ETH trading pairs. Caution: do your best to understand the security model before using any wallet software.
Marina Silva is the first presidential candidate in Brazil using blockchain to keep all their electoral donations transparent and traceable. VotoLegal uses Decred technology, awesome use case! (reddit)
We continue to see institutional interest in DCR. Large block buyers love the concept of staking as a way to earn additional income and appreciate the stakeholder rights it affords them. Likening a DCR investment to an activist shareholdebondholder gives these institutions some comfort while dipping their toes into a burgeoning new asset class.
Targeted advertising reports released for June and July. As usual, reach @timhebel for full versions.
Big news in June: Facebook reversed their policy on banning crypto ads. ICO ads are still banned, but we should be OK. My team filled out the appeal today, so we should hopefully hear something within a few days. (u/timhebel on reddit)
After couple weeks Facebook finally responded to the appeal and the next step is to verify the domain name via DNS. A pack of Stakey Telegram stickers is now available. Have fun!
Meetup in Berlin, Germany hosted by BlueYard Capital. @jz_bz and @lftherios discussed open source incentivization, the value of governance and their respective projects @decredproject and @oscoin. See @issedjur's feedback here. (photos: 1, 2, 3)
O'Reilly Open Source Convention in Portland, USA. @raedah's talk was "Decentralizing decision-making on the blockchain". Read his report here and see on the photos how the Big Stakey was entertaining the public. (photos: 1, 2, 3)
oregonisaac: many open source devs at OSCON were VERY interested in Politeia and it was probably the #1 hook that resulted in lots of long conversations about what makes Decred unique from the ground up. (#politeia)
Blockchain Meetup in Faro, Portugal. Marco Peereboom gave a talk "Decred 101" and answered questions.
Meetup in Lisbon, Portugal on Aug 2. @moo31337 and @mm will be presenting on Decred with talk "Decred 101 - Governance with skin in the game". Co-hosted by The Block Cafe. Free entrance.
Meetup in Taipei, Taiwan on Aug 5. @morphymore will give a short intro on Decred.
OKEx Global Meetup Tour in Ho Chi Minh City, Vietnam on Aug 9. @joshuam will introduce Decred and on-chain governance and take part in a panel discussion.
Twitter: Ari Paul debates "There can be only one" aka "highlander argument". Reddit and Forum: how ticket pool size influences average vote time; roadmap concerns; why ticket price was volatile; ideas for using Reddit chat for dcrtrader and alternative chat systems; insette's write-up on Andrew Stone's GROUP proposal for miner-validated tokenization that is superior to current OP_RETURN-based schemes; James Liu's paper to extend atomic swaps to financial derivatives; what happens when all DCR are mined, tail emission and incentives for miners. Chats: why tickets don't have 100% chance to vote; ideas for more straightforward marketing; long-running chat about world economy and failure modes; @brandon's thoughts on tokenizing everything, ICOs, securities, sidechains and more; challenges of staking with Trezor; ideas how to use CryptoSteel wallet with Decred; why exchange can't stake your coins, how staking can increase security, why the function to export seed from wallet is bad idea and why dcrwallet doesn't ever store the seed; ticket voting math; discussion about how GitHub workflow forces to depend on modern web browser and possible alternatives; funding marketing and education in developing markets, vetting contractors based on deliverables, "Decred contractor clearance", continued in #governance. #dex channel continues to attract thinkers and host chats about influence of exchanges, regulation, HFT, lot sizes, liquidity, on-chain vs off-chain swaps, to name a few topics. #governance also keeps growing and hosting high quality conversations.
In July DCR was trading in USD 56-76 and BTC 0.0072-0.0109 range. A recovery started after a volume boost of up to $10.5 m on Fex around Jul 13, but once Bitcoin headed towards USD ~8,000 DCR declined along with most altcoins. WalletInvestor posted a prediction on dcrtrader. Decred was noticed in top 10 mineable coins on coinmarketcap.com.
One million PCs in China were infected via browser plugins to mine Decred, Siacoin and Digibyte. In a Unchained podcast episode David Vorick shared why ASICs are better than GPUs even if they tend toward mining centralization and also described Obelisk's new Launchpad service. (missed in June issue) Sia project moved to GitLab. The stated reasons are to avoid the risk of depending on centralized service, to avoid vendor lock-in, better continuous integration and testing, better access control and the general direction to support decentralized and open source projects. Luxor explained why PPS pools are better. @nic__carter published slides from his talk "An Overview of Governance in Blockchains" from Zcon0. This article arguing the importance of governance systems dates back to 2007. Bancor wallet was hacked. This reminds us about the fake feeling of decentralizaion, that custody of funds is dangerous and that smart contracts must have minimum complexity and be verifiable. Circle announced official Poloniex mobile apps for iOS and Android. On Jul 27 Circle announced delisting of 9 coins from Poloniex that led to a loss of 23-81% of their value same day. Sad reminder about how much a project can depend on a single centralized exchange. DCR supply and market cap is now correct on onchainfx.com and finally, on coinmarketcap.com. Thanks to @sumiflow, @jz and others doing the tedious work to reach out the various websites.
About This Issue
Let us not forget the original reason we needed the NYA agreement in the first place. Centralization in mining manufacturing has allowed for pools to grow too powerful, granting them the power to veto protocol changes, giving them bargaining powers where there should be none.
SegWit2x through the NYA agreement was a compromise with a group of Chinese mining pools who all march to the beat of the same drum. Antpool, ViaBTC, BTC.TOP, btc.com, CANOE, bitcoin.com are all financially linked or linked through correlated behavior. Antpool, ConnectBTC and btc.com being directly controlled by bitmain, and ViaBTC and Bitmain have a "shared investor relationship". If bitmain is against position A, then all those other pools have historically followed its footsteps. As Jimmy Song explains here the NYA compromise was because only a small minority of individuals with a disproportionate amount of hashrate were against Segwit (Bitmain and subsidiaries listed above), where the rest of the majority of signatories of NYA were pro-segwit. The purpose of the compromise was to prevent a chain split, which would cause damage to the ecosystem and a loss of confidence in bitcoin generally. At current time of calculation, according to blockchain.info hashrate charts, these pools account for 47.6% of the hashrate. What does it matter if these pools are running a shell game of different subsidiaries or CEO's if they all follow a single individual's orders? 47.6% is enough hashrate right now to preform a 51% attack on the network with mining luck factored in. This statistic alone should demonstrate the enormous threat that Bitmain has placed on the entire bitcoin ecosystem. It has compromised the decentralized model of mining through monopolizing ASIC manufacturing which has lead to a scenario in which bitcoins security model is threatened. But let us explore the reasoning behind these individuals actions by taking a look at history. First, Bitmain has consistently supported consensus breaking alternative clients by supporting bitcoin classic, supporting Bitcoin Unlimited and its horrifically broken "emergent consensus" algorithm, responding to BIP148 with a UAHF declaration, and then once realizing that BIP148/BIP91 would be successful at activating Segwit without splitting the network Bitmain abandoned its attempt at a "UAHF", and admitted that bitcoin cash is based on the UAHF on their blog post. The very notion of attempting to compromise with an entity to prevent a split that is supporting a split is illogical by nature and a pointless exercise. Let us not forget that Bitmain was so diametrically opposed to Segwit that it sabatoged Litecoins Segwit Activation period to prevent Segwit from activating on Litecoin. Do these actions sound like a rational actor who has the best interests of bitcoin at heart? Or does this sound like an authoritarian regime that wants to stifle information at any cost to prevent the public from seeing the benefits that SegWit provides? But the real question must still be asked. Why? Why would Bitmain who is so focused on increasing the blocksize to reduce fee pressure delay a protocol upgrade that both increases blocksize and reduces fee pressure? If miners are financially incentivized to behave in a way in which is economically favorable to bitcoin, then why would they purposefully sabatoge protocol improvements that will increase the long term success survival of bitcoin? There is plenty of evidence that suggests covert ASICBOOST, a mechanism in which a ASIC miner short cuts bitcoins proof of work process (grinding nonce, transaction ordering) and an innovation that Bitmain holds a patent for in China is the real reason Bitmain originally blocked SegWits activation. It was speculated by Bitcoin Core developer Gregory Maxwell that this covert asicboost technology could earn Bitmain 100 Million dollars a year. It is notable that Hardfork proposals that Bitmain has supported, such as Bitcoin Classic, Bitcoin Unlimited, Bitcoin ABC/Bcash and now SegWit2x all preserve Bitmains covert asicboost technology while Segwit the soft fork breaks asicboosts effectiveness. But if that is not enough of a demonstration of rational economic incentives to behave in such a way, then what about irrational reasons such a idelogical positions or pride? Its no secret that Chinese miners dislike for bitcoin core matured when the Hong Kong agreement was broken. Many miners have consistently rationlized "firing bitcoin core developers" and we even have a direct account from a bitpay employee that said Jihan directly told him that is his purpose is to "get rid of blockstream and core developers". And while the Hong Kong agreement being broken is quite the muddied waters, there is proof in the blockchain that chinese miners were the first to break the terms of the agreement by mining a block with a alternative client. Some bitcoin core developers continued to work on HardFork proposals despite this, offering up public proposals, BIPs and released code to attempt to satisfy the terms of the agreement. Yet only in hindsight did everyone realize that no individual or individuals can force the entire bitcoin network to upgrade. It is only through the slow methodical process of social consensus building that we can get such a large decentralized global network to agree to upgrade the protocol in a safe manner. Yet to this day we still have bitter idelogical wars over this HK agreement "being broken" despite how long ago, and how clear the situation is in hindsight. When you take into account the historical record of these individuals and businesses actions it clearly demonstrates a pattern of behavior that undermines the long term health of bitcoin. When you analyze their behavior from a rational economic viewpoint, you can clearly see that they are sabatoging the long term health of bitcoin to preserve short term profits. Considering this information, why would other bitcoin ecosystem businesses "compromise" with such a malicious actor? Let us not forget that these actors were the entire reason we needed to compromise in the first place went ahead and forked the bitcoin network already creating the first bitcoin-shared-history altcoin, Bitcoin ABC. So we compromised with people to prevent the spliting of bitcoin, so that they could go ahead and split bitcoin? What illogical insanity is this? Why would you "stick to your guns" on an agreement that was nullified the moment Bitmain and ViaBTC supported a hardfork outside of the S2X agreement? Doubly questionably is your support when the hardfork is highly contentious and guaranteed to cause a split, damage bitcoin, create chaos and damage global confidence. A lot of the signatories of the NYA agreement are payment processors and gateway businesses. Their financial health depends upon short term growth of bitcoin to increase business activity and shore up investors capital with revenue from that transactional growth. Their priorities are to ensure short term growth and to appease their investors. But their actions demonstrate a type of cause and effect that often occurs in markets across the world. By redistributing network resource costs to node operators they are simply shuffling costs to the public so that they can benefit in the short term without needing to allocate extra capital. But these actions do not benefit the health of bitcoin long term. Splitting the network, once again, does not increase confidence in the bitcoin network. It does not foster growth. Increasing the blocksize after segwit already increases the blocksize will not get us any closer to VISA transaction levels from a statistical viewpoint. Increasing the TPS from 3 to 7 when we need to get to 30,000 TPS is quite an illogical decision at face value. Increasing the blocksize on-chain to get to that level would destroy any pretense at decentralization long before we even came close, and without decentralization we have no cenosorship resistence, fungibility. These are fundamental to the value of bitcoin as a network and currency. Polymath and industry wide respected crypto expert Nick Szabo has written extensively on scaling bitcoin and why layer 2 networks are essential. To all the Signatories of the SegWit2X I ask you - What are you trying to accomplish by splitting bitcoin once again? What consensus building have you done to ensure that bitcoin wont suffer a catastrophic contentious hard fork? As it stands right now I only see a portion of the economic actors in the bitcoin ecosystem supporting S2X. No where near enough to prevent miners from supporting the legacy chain when there will be a large portion of the economy still operating on the legacy chain preserving its value. Where there is money Its going to be extremely difficult to topple the status quo/legacy network and the cards are stacked against you. Without full consensus from the majority of developers, economic actors/nodes, exchanges, payment processors, gateways, wallets....you will only fork yourself from the legacy network and reap destruction and chaos as the legacy chain and S2X battle it out. If you truly support bitcoin and are dedicated to the long term success of bitcoin and your business, then why would you engage/compromise with demonstratably malicious actors within the bitcoin ecosystem to accomplish a goal that was designed by them to further monopolize/centralize their control, at the destruction of bitcoins security model? Bitcoin core developers are actually positive on hardforks and want to eventually increase the legacy blocksize, they just wish to do it in a responsible manner that does not put the network at risk like SegWit2x does. Also, it seems a rational engineering choice to optimize and compress transactions/protocols before increasing the blocksize. Things like SegWit, Schnorr, MAST are all great examples of things Bitcoin Core has done and is doing to increase on-chain scaling technology to the long term benefit of bitcoin. The fate of bitcoin will be determined by users who choose when how and where they transact. If businesses attempt to force them on the S2X chain they will abandon those businesses to use a servicor that does not attempt through coercion to force them upon a specific forked network. Finally, without replay protection there can be no clean split and no free market mechanism to determine the winner. I understand that this is purposefully designed this way, to force a war between the legacy chain and S2X, but if you stand for everything bitcoin stands for, then you as central actors will not try to force people onto your chain. Instead, you should allow the market to decide which chain is more valuable. If you will not abandon this poisonous hardfork pill then please advocate/lobby to add default replay protection to the btc1 codebase. You cannot claim Free Market principals and then on the other side of your mouth collude with central actors to force protocol changes upon users. Either you believe in bitcoin, or you are here to join the miners in their poorly disguised behaviors to monopolize, subvert and sabatoge bitcoin.
If your node is signaling UASF BIP-148, it's time to start enforcing BIP-148. There are people still on the sidelines, waiting for this before joining.
Let there be no more ambiguity about your position. There are reviewed and signed binaries available for download. You should show people who are on the fence that you are determined and capable of enforcing BIP-148. Indeed, that you are already enforcing BIP-148. I know that at the website it says:
It is recommended that users do not update unless an economic majority commits to updating and users are aware of the risks and mitigations of a failed UASF deployment.
But it also says:
Users aware of the risks and who want to commit should use clients that enforce BIP148. Users that run full nodes would upgrade to one that enforces BIP148
We only have 1 more month to ensure that a critical mass demands segwit on August 1, or UASF will fall on it's face. Segwit will be delayed. Bitmain will be emboldened. Projects will develop closer ties to coins that have already activated segwit. The world will have evidence that unless Jihan Wu or Greg Maxwell sign off on a change to Bitcoin, it cannot happen. We have a better option. Let's exercise it. If you want UASF to happen, your node should advertise that unless you change your mind, it will enforce BIP 148. Putting the message in uacomment was the best thing to do before reviewed binaries were available, and helped bring those binaries into existence. Now, though, it introduces unnecessary guesswork about how committed you are to the project, and raises questions about whether the enforcing nodes have economic significance or not. The more certainty we can get our hands on the better our chances of success. I want to see that fat gray band on the area chart start rapidly shrinking to zero, and you should too.
Of economic freedom outside of government currency. Another 4 years of complete strangers coming together across the Internet to make this idea work. Another 4 years of mining infrastructure being added and BIPs being implemented. Another 4 years of zero downtime. Another 4 years wiser of the worlds (mainly central bank and government caused) currency turmoil. Another 4 years of checking the price charts every 20 seconds. Another 4 years of mentioning Bitcoin at every opportunity to strangers. Another 4 years of boring what friends you have left with the days 3 biggest news stories. Another 4 years of waiting for 'that big announcement' The last block reward to now, just look where Bitcoin has come from to where it is today. It's been a pleasure dudes, here's to the next 4 years! Edit: Obligatory thanks for the gold, I'm off to the lounge to see if the cocktail bar takes Btc for drinks!
UASF = user activated soft fork. Bitcoin works by hash rate. "true" or "valid" Bitcoin is based on whoever has 51%+ of the hash power as well as the longest chain of work (which automatically means the one with more hash power since they would be mining blocks faster). Hash power is the ONLY metric that can't be faked. Bip 148 (aka uasf), is an attempt to force segwit into bitcoin by running nodes that will block non-segwit nodes/transactions. Note, segwit capped at 40% signalling although it required 95% consensus to be activated as a soft fork. The UASF'ers, aka the SJW's of cryptocurrencies, alleged that miners were blocking segwit from being adopted. They created a whole FUD (fear uncertainty and doubt) movement about how miners were rejecting segwit so miners can run Asicboost to make more money. Jihan has gone on record in an interview stating he wishes this were true as he'd love to be able to save millions of dollars a month on electricity at the press of a button (paraphrasing). UASFers also mislead people into running bip 148 nodes with threats. They fool people by thinking that if they DON'T run bip 148 nodes, you'll be forked off of the main network. The Data 90 Percent of miners signalling for Segwit2x aka New York Agreement This means at best, UASF has 10% of the global hash rate. This also means UASF is unlikely to survive the difficulty adjustment as it'll take weeks or months of mining with so little hash power backing this alt coin. verify yourself here More Lies UASFers fake node count They love to boast their support for uasf with constant screenshots and posts of how they are running a bip 148 node. However, like I mentioned before, hash rate is the only metric that can't be faked. Do you see those swings around week 22? that is NOT organic growth. Node count cannot and would not spike up and down that quickly. verify yourself here The Truth They really only have about half of the node count they claim. And again, nodes alone do not make up a coin. You NEED hash power behind it, especially if we're talking bitcoin. The most secure network in the world because of the hashing power behind it. verify yourself here TL:DR - the SJW UASF movement has at best 10% hash rate, when in reality, only slush pool is signalling for bip 148 and they total 1% of the global hash. with 90% support for the new york agreement, a split is very unlikely.
The soft fork of Bitcoin and coming soon after ETH hard fork, what are your opinions on it? Will it split? What you are going to do with your coins? I would share my thoughts. At the first ETH hard fork in 2016 it was very highly doubtful that it will split, and here we go, ETC. Bitcoin will split for sure. Taking that it is a soft fork and people have to decide to choose sides and not a hard fork (when you really don't have to switch anything, even know that some kind of update is happening). Then going back to the past ETH hard fork which is better than a soft fork and still it splitted up even so. Therefore it is almost impossible that they won't split. But the real question is - how will it come out, there is even a possibility that Bitcoin will die (I mean, in terms - it will not be the main currency of all cryptos anymore). Then who will replace him? My bets are on: Monero - because anonymity (you can't track it by blockchain, by whatever, it's impossible to track if you not intentionally sign your name on it) and dark markets (this is the bitcoin first idea, and what it was used for, dark markets have to function, crash, not crash, trading can't stop for a month or longer, it can't stop even for an hour! it's too large). Furthermore it's the biggest, most stable (among the crashes, even this one happening now) and probably the first currency from all other "anonymity" currencies. (I use quotation marks because all cryptos are supposed to be anonymous in theory, so it's like anonymity among the anonymous world.) There are like 4 or 6 this kind of cryptocurrencies on the market now and only Monero stands in top 5 to 12 of all crypto since 2015, you can check this in internet archive if you don't believe me. Ripple-Cripple and Bancor - because all that corporations, banks stuff that use and control this currency. Actually banks and corporations control everything not just the currency they made, jews (I don't even know now if it's just a meme or true fact) ruled gold, then money and now they are into crypto (Bancor can create when and how much tokens they want, it's literally new Federal Reserve System which control all the money now - to those that don't know, and of course they are in "Those who are the biggest." team arealdy, I mean market caps top list (Ripple is third, just behind ETH and BTC). But if I may share my opinion of this - they might become main crypto, but I would never invest in it, sell my soul for bunch of shekels. Moreover they are both centralized, they will control your money. This is total opposition to Monero and whole idea of cryptocurrency. You can say that I'm some stupid idealist but I will never sell my (already limited) freedom for any money. IOTA - it is basically very new on exchanges, so it's hard to predict how the charts will go, but it is on totally new technology, different than blockchain, so people during this forks may be like "if BTC and ETH system failed then choose this new one", they have Miicrosoft and Ubuntu support, no fees, plans to take it into real life and it's like normie currency that people would use, besides that they already big too, they started at 6 top currency market cap (1.7 billion $) and someone had to put that money into this, and they did it in only 2 years! But really what important is is that it wasn't even easy to find and more - to buy before lunch on bitfinex exchange, you had to use some kind of slack channels, like weird complicated stuff, people (and not just regular people I will say it again, they had to have knowledge and be into crypto hard, like total insiders) has to believe in this, and 4chan's /biz/ don't shill it, so it's a good sign - that it isn't just some big whales pump dump (actually with that market cap, official support of microsoft and other companies like that it's impossible). Edit: find some resources with basic predictions: https://bitcoinmagazine.com/articles/bitcoin-beginners-guide-surviving-bip-148-uasf/
Hi all, After reading from A - Z "Mastering Bitcoin 2nd Edition" by Andreas Antonopolous, printed June 2017 - through personal experience & listening to both sides arguments, it has come clear to me now that BCH is simply a ‘alt-coin’ nothing more, but taking the name of ‘Bitcoin’ and putting ‘Cash’ after its name. One of the consistent biggest questions (armed with the ‘facts’ I now have) and thoughts on BCH for me are:
BTC is largely considered a settlement currency now, it is very liquid; when its exchange rate changes – all ‘alt coins’ exchange rates change too. (alt-coins are not independent on exchange rates from BTC i.e. BTC effect = all effected)
Why does all the best Cryptographers/mathematicians and software engineers not partake in BCH dev? (other than mostly investors & minors and few developers).
Of all the problems Roger keeps talking about in BTC - that BCH solves; are actually only the result of BTC demand outpacing its 'current' capacity today (BCH would have same problem if as popular), hence the tx fees exploded [Core devs ‘had’ to keep block size to help dev of new layered tech – to avoid centralisation – and even if they did raise blocks, it wouldn’t be long before there where back to square one i.e. full block, again > centralisation of ‘full’ nodes] – (Fee problem is only temp). (Doesn’t mention ‘anything’ in original ‘unedited’ Satoshi white paper about increasing block sizes with demand – something Roger keeps saying should happen in that that’s following Satoshi’s vision).
Why does it say CEO Roger Ver, if Bitcoin is not a company? (looks centralised agenda).
Different BCH implementations are dangerous regarding trust of the implementation/s itself i.e. bugs DoS attacks hacks etc. (With Bitcoin Core implementations, they are BIPs (community proposals) to one ‘quality/secure’ implementation – having that concentrations of resources specialising on the one implementation means greater trust).
Are we seriously believing all ‘full’ nodes are prepared to consume 10Tb+ HDD space per year – for standard user? (particular if they are ‘just’ ‘full’ nodes – no financial incentive) (Leading to large companies taking on responsibility = greater centralisation)
According to the block chain technology, the longest chain is the biggest PoW; for every BCH block mined there will be BTC block mined (even if BCH mined more its not possible to historically catch up), and therefore because BTC ‘is’ the longest chain BCH will have to x2 BTC ‘total’ hashrate to be ahead of BTC.
In my view Id rather trust devs/engineers instead of Economists, traders and investors (ulterior interests & markets are always very fickle – because they are human emotion); just because Roger Ver is the ‘first’ investor doesn’t necessarily make him the best at advocating the argument about BCH being better than BTC argument.
What does BCH have to offer that BTC will offer (much better) when Segwit, LN and payment channels take off? (nothing). (Out of all the problems Roger keeps talking about – according to “mastering Bitcoin 2nd Edition”, the 3 developments for Bitcoin solve all these, and reduce fee’s to historic lows [in the end] and better tx’s down to ‘granularity’ & tx's far better than any current payment processor can ever offer).
Though Roger Ver doesn’t like Bitcoin Core team – that’s fine, but why have nothing good to say about the 3 technologies i.e. Segwit, Payment Channels & LN? (He appears to have a very black and white view – which makes ‘me’ more suspicious).
Satoshi’s Original white paper says ‘nothing’ about following a ‘fixed’ vision like Roger keeps proclaiming (“Mastering Bitcoin 2nd Edition” contains the ‘absolute’ original Satoshi white paper), actually uses the words in the white paper conclusion “Any needed rules and incentives can be enforced with this consensus mechanism”; in other words making changes along the way is expected. (But not according to Roger Ver). (Why is there no emergent consensus proposals before hard forking? Remember Hard forking is not backwards compatible (with older implementations) and quite undemocratic against the emergent consensus (forcing them to upgrade) i.e. the ‘full’ nodes).
There seems to be too much central driven around and by Roger Ver, why is this? (If his arguments are true).
Off-chain tx’s are taken completely out of context on the BCH camp - they are not actually off chain, its just they are being moved to ‘payment channels’ instead with each ‘payment channel’ on the Bitcoin block chain (look at it as a wrappecontainer), for example to start/open a payment channel you start a ‘funding tx’ then all ‘commitment’ tx's (in between) are off chain (within the payment channel itself) [remember ‘commitment’ txs are temp – in that they need to have a settlement tx eventually in which closes that payment channel by the ‘settlement’ tx.
Unconfirmed tx's are not actually as bad as people think – in that they are still far more guaranteed/safer payment than using a credit card to pay for goods; yet nobody challenges credit cards. (So this idea of 10min block times being slow/waiting is actually irrelevant to the buyer and recipient).
(The book completely slams ‘all’ of Roger Vers arguments). Some links of ref: https://coinsutra.com/btc-vs-bch-bitcoin-cash/ Fee’s of BTC today: https://blockchain.info/charts/transaction-feeshttps://blockchain.info/charts/transaction-fees-usd (So much for Rogers high fee’s argument). PS: I truly believe the majority of BCH people arguing are more opinion driven arguments rather than ‘factual’. Everyone who is a player in all or part of the Bitcoin industry ought to read “Mastering Bitcoin 2nd Edition” - By Andreas Antonopolous, then form opinions and arguments afterwards – based from facts. (I like to remain as open minded as possible – but I am on the side of BTC. Somebody out there that can try swing me over to BCH would be welcome). Technical/study/academic books ‘must’ be as accurate/rigorously checked and referenced as much as possible before it would be allowed to be published; so unless the book is very old/outdated it cannot be challenged. All opinions and facts are welcome but ‘must’ be honest & sensible discussion. Disclaimer: I have no BTC or BCH holdings. Regards.
[Discussion] Noob Question. Why are all Crypto currencies value seemingly linked?
I've noticed that weekly charts of BTC, ETH, and LTC are almost exactly the same shape. Can anyone comment on this? My understanding is that ETH's value is currently down due to all the bitcoin BIP and SegWit2x shenanigans.
TL;DR of Bitcoin's shenanigans and my dumb opinions on it
I'm copy pasting this from a post i made in the daily general. Not sure what the etiquette is on that, but I put way too much work into this to have it disappear after 24 hours. So, since right now we're so tightly coupled to bitcoin, I went down the rabbit hole of /btc, /bitcoin and had a read through the various BIPs everyone keeps bringing up to try and make sense of what's happening with this August 1 debacle. Here's a cute little flowchart. I think I'm getting a general idea of why the price of BTC (and consequently, the price of ETH) is starting to rally. It seems like a good portion of it has to do with BIP 91. The TL;DR of BIP 91 is that instead of being a UASF (user activated soft fork) like BIP 148, BIP 91 is an MASF (miner activated soft fork) that needs less than the 95% supermajority for BIP 148. The way BIP 91 works is that if in a rolling window of 366 mined blocks on the bitcoin network from July 21 to July 29, at least 269 blocks are mined with a bit in the version field signaling BIP 91 agreement (i.e. ready for segWit processing), then the network starts rejecting blocks that aren't segwit enabled. This effectively makes BIP 148 useless, and essentially makes August 1 a red herring, as the network will be using segwit well before then and the 2MB blocksize increase (segwit 2x) isn't slated to happen until mid November. The sudden optimism and bullishness most likely comes from the fact that AntPool, BTC.com, BTC.top, BTCC, Bixin, BitClub and many others have already mined at least one block signaling BIP 91. Over all, these mining pools represent 50+% of the total hashpower on the network with roughly 80% needed for BIP 91 to be successful. All top 5 pools are now signaling BIP 91 (many of them, like AntPool, for the first time today). In the flow chart I posted as well, it mentions that Bitcoin ABC will fork regardless, and says that many of the pools signalling BU (Bitcoin Unlimited) will most likely move to Bitcoin ABC. Many of the pools that were previously signaling Bitcoin unlimited are now signaling BIP 91 instead. From here, it seems to me like there are a few possible scenarios 1. BIP 91 fails to achieve 269 blocks and it fails, paving the way for BIP 148 to go into effect Probably the worst case scenario in the short term, it's the shorters wet dream and also seems like it's the most unlikely. The fact that there's already majority hashpower signaling BIP 91 almost week before the "observation period" starts and almost 2 weeks before it ends makes me suspicious of the idea that miners will wither a) suddenly back out and/or b) that the momentum wont carry to 80% HP. If it does, then the mess with August 1will still be alive and well and there will probably be further contractions for all crypto across the board. 2. BIP 91 goes into effect, and August 1 becomes more or less a non issue. Bitcoin ABC has some what significant/very significant/majority support Massive rally after news of August 1 being "called off" starts to go around, possibly lasting until after August 1, then a decent ish drop as people start migrating to BTC ABC. Lots of uncertainty and drops as more money leaves to the sidelines as people wait for the dust to settle between legacy BTC and BTC ABC. Not really sure how to call it after that. The height of the rally and the magnitude of the drop will be dependant on how cleanly and quickly BIP 91 passes and how many people decide to jump on the BTC ABC bandwagon. 3. BIP 91 goes into effect, and August 1 becomes more or less a non issue. Bitcoin ABC quickly becomes irrelevant or gets outright abandoned Not exactly moon, but i can see 300+ pretty easily a week or so after August 1 after people realize the whole thing was Y2K tier hysteria. 4. The above, but EEA3 is also announced We organize a moment of silence for anyone that still has leveraged shorts sub 200. The most important thing to remember hear is that even if scenarios 3 or 4 occur, we're still going to be on the hotplate for November 15, which might end up being the ACTUAL apocalypse everyone here has been professing for the past week or so. Now please tell me about how wrong/stupid/new I am. I'm sure at least a portion of this is pretty misguided and I'd love to hear some constructive and not so constructive opinions EDIT: What the fuck is formatting EDIT 2: Give me a fucking break i'm an electrical engineer not a graphic designer EDIT 3: Oh, I almost forgot, here's an informative post I found about the drama, politics and other fuckery concerning this whole fiasco
Dr Peter R. Rizun, managing editor of the first peer-reviewed cryptocurrency journal, is an important Bitcoin researcher. He has also been attacked and censored for months by Core / Blockstream / Theymos. Now, he has now been *suspended* (from *all* subreddits) by some Reddit admin(s). Why?
Dr. Peter R. Rizun is arguably one of the most serious, prominent, and promising new voices in Bitcoin research today. He not only launched the first scientific peer-reviewed cryptocurrency journal - he has also consistently provided high-quality, serious and insightful posts, papers and presentations on reddit (in writing, at conferences, and on YouTube) covering a wide array of important topics ranging from blocksize, scaling and decentralization to networking theory, economics, and fee markets - including:
It was of course probably to be expected that such an important emerging new Bitcoin researcher would be constantly harrassed, attacked and censored by the ancien régime of Core / Blockstream / Theymos. But now, the attacks have risen to a new level, where some Reddit admin(s) have suspended his account Peter__R. This means that now he can't post anywhere on reddit, and people can no longer see his reddit posts simply by clicking on his user name (although his posts - many of them massively upvoted with hundreds of upvotes - are of course still available individually, via the usual search box). Questions:
What Reddit admin(s) are behind this reddit-wide banishing of Peter__R?
What is their real agenda, and why are they aiding and abbeting the censorship imposed by Core / Blockstream / Theymos?
Don't they realize that in the end they will only harm reddit.com itself, by forcing the most important new Bitcoin researchers to publish their work elsewhere?
(Some have suggested that Peter__R may have forgotten to use 'np' instead of 'www' when linking to other posts on reddit - a common error which subs like /btc will conveniently catch for the poster, allowing the post to be fixed and resubmitted. If this indeed was the actual justification of the Reddit admin(s) for banning him reddit-wide, it seems like a silly technical "gotcha" - and one which could easily have been avoided if other subs would catch this error the same way /btc does. At any rate, it certainly seems counterproductive for reddit.com to ban such a prominent and serious Bitcoin contributor.)
Why is reddit.com willing to risk pushing serious discussion off the site, killing its reputation as a decent place to discuss Bitcoin?
Haven't the people attempting to silence him ever heard of the Streisand effect?
Below are some examples of the kinds of outstanding contributions made by Peter__R, which Core / Blockstream / Theymos (and apparently some Reddit admin(s)) have been desperately trying to suppress in the Bitcoin community. Peer-Reviewed Cryptocurrency Journal
In case anyone missed it, Peter__R hit the nail on the head with this: "The reason we can't agree on a compromise is because the choice is binary: the limit is either used as an anti-spam measure, or as a policy tool to control fees."
"It's because most of them are NOT Bitcoin experts--and I hope the community is finally starting to recognize that" -- Peter R on specialists vs. generalists and the aptitudes of Blockstream Core developers
It is time to usher in a new phase of Bitcoin development - based not on crypto & hashing & networking (that stuff's already done), but based on clever refactorings of datastructures in pursuit of massive and perhaps unlimited new forms of scaling
Peter__R on RBF: (1) Easier for scammers on Local Bitcoins (2) Merchants will be scammed, reluctant to accept Bitcoin (3) Extra work for payment processors (4) Could be the proverbial straw that broke Core's back, pushing people into XT, btcd, Unlimited and other clients that don't support RBF
"My response to Pieter Wuille on the Dev-List has once again been censored, perhaps because I spoke favourably of Bitcoin Unlimited and pointed out misunderstandings by Maxwell and Back...here it is for those who are interested" -- Peter R
So confused about the fork and wtf is Bitcoin Cash?
I truly apologize but I just don't get any of it. I've read the reddit flow charts and the discussions and the news articles but it still doesn't make any sense to me :'(
So bitcoin blocks have a 1mb limit which is too small to handle increasing transaction volumes. Everyone agrees we need to increase block size or fit more transactions into a block in order to alleviate this problem. I get it.
Segwit is a method of removing certain data from transactions to fit more transactions into a block. I get it. People that want this are known as the bitcoin core supporters... I think. Segwit is known as the soft fork right? So people can choose whether they want to have smaller transactions. But then wouldn't smaller transactions be cheaper for everyone, so why would there be a fork int he first place? if segwit gets voted in then surely everyone will start using it, even if they initially opposed the idea??? So how is this a fork.
The other camp, bitcoin unlimited want to simply make blocks larger right? And if that happens then a hard fork occurs, where some people use the new bigger blockchain currency and the rest use the old crappy small block bitcoin classic. But again even if people wanted segwit, what incentive would they have to keep using classic btc after unlimited gets voted in. Again I fail to see how a fork occurs.
And regarding the timeline of all of this??? There are all this Bitcoin Improvement Proposals (BIP) getting thrown around which is mighty confusing. I thought there is just one vote, where miners decide whether to choose segwit or bitcoin unlimited. So what is it with everyone saying the vote is already happening/over...... Also isn't miners being the only ones who vote really unfair?? Considering 90% of Miners are Chinese? In fact how is bitcoin decentralized at all if all it miners are Chinese???
And finally wtffffffffff is bitcoin cash...... and how is it related to segwit and unlimited?
My sincerest apologies for how dumbed down and clueless I sound.
We have one month to start voting with >75% of miners on BIP109 for an effective 2Mb increase at the halving
Why one month? The halving will occur at 11 July 2016 11:45 UTC, and voting takes around 7 days (1000 blocks) with a grace period of 28 days. This means the absolute last possible time to start voting for BIP109 is 6 June 2016 11:45 UTC. Why would we want to upgrade to 2Mb before the halving? The halving will attract a lot of attention; it might even cause a price increase and thereby increase transaction volume. So Tx-byte rate could hit an all time high during the halving. For some miners, variable cost will rise higher than what they earn in rewards. This means a certain percentage of miners will be inclined to turn off some equipment. Capacity-byte rate likely goes down a notch as well (my guess is 10% - 20%). Combined with the imminence of 14nm chips, which may increase hashrate (and capacity) at just the right time, the halving’s negative effects in conjunction with the 1Mb limit could be temporarily mitigated. But in the meantime it seems to stifle hash-rate growth and could actually make the situation worse. At the beginning of March, we had ourselves a big backlog. It took months for Tx-byte rate to go up to 1Mb per 10 minutes. And for some reason hashrate was down, and thereby capacity-byte rate was just 888Kb per 10 minutes. Average confirmation time went up to 43 minutes and fees went up by a factor of two in the span of just two weeks. We might run into the limit within a month, and that will give us a definitive answer whether this is or isn’t a significant problem. But if that doesn’t happen, it’s advisable to plan for the worst potential outcome at the halving. But during the last backlog all my transaction went through fine That is nice for you. But this is like saying to someone already stuck in a traffic-jam, ”You should have gone around!” If there is an accident, there will always be people who get stuck. Regardless of having navigation software which routes around traffic jams, people will get stuck. Detours have their own set of costs. In reality, we have hard evidence that usability was greatly impacted during the last backlog. Anecdotal evidence doesn’t change that. Ask the friendly people at LocalBitcoins whether they had a significant number of complaints. Or check raw data on confirmation times around that period. That was just an attack … which makes it likely a new attack is imminent around the halving. Because that is when an attack is the cheapest and the most effective! Good point. But most transactions are just spam Spam should be determined by the willingness to pay more fees, and its economical significance, not just by fees paid. These things are not completely clear until you actually hit the blocksize limit. And don’t forget: Miners can already enforce soft limits to prevent spam as much as they feel is necessary, they already have that voting ability. So if enough transactions are willing to pay more fees, or if the transactions which drop off the blockchain had economical significance, then we are going to have a bad time. Either way we are going to stunt growth – it’s only a question to what extent. You are not a cypherpunk, you just want growth
A cypherpunk is any activist advocating widespread use of strong cryptography and privacy-enhancing technologies as a route to social and political change
I agree with that completely, and I advocate for those things myself. I think the widespread part is also very important. And that we want some level of pragmatism – and yes even compromises – to get there. Saying that “big-blockers” want to compromise all the way to a completely centralised version of Bitcoin is just as idiotic as saying small blockers want 1Mb forever. Those are slippery slope & strawman arguments. Both “sides” want the same thing. But the perfect will be the enemy of the good. Nobody benefits from a perfect solution which isn’t used. Usability and cost are very important for widespread adoption of any privacy enhancing product or service. Let’s encrypt is a great example of how you enhance privacy and security for everyone just by making something simple and cheap. With Bitcoin we are currently doing the opposite. But SegWit is coming Great! Where is it? Will it be on time? Don’t we want a backup plan for when it is too little, too late? We are going to run into the limit anyway Sure, yes. Bitcoin in its current form cannot scale indefinitely. But that’s not a good argument to not let it scale at all, or not on time. And I do think it is very interesting to see what happens when we hit the limit. But I’d rather run into soft-limits than hard limits, because then we could stop the “experiment” before it gets out of control. If a majority of miners really think smaller blocks are better, then why are their soft-limits not lower than 1Mb? To me, that makes no sense. Hitting the limit is more comfortable if we already have alternatives like Bitcoin Sidechains or Payment channels. As it stands today, people can only move to alt-coins or centralised solutions. You predicted Bitcoin to fail multiple times already, why should I believe you now? That is true to a certain extent. But that was always dependent on Bitcoin’s success: if we had a huge influx of users/transactions we would run into problems. Maybe that didn’t happen because we knew there was a ceiling, or maybe the infighting prevented certain growth. Who knows how the very existence of a hard limit has already altered market behavior. And people brush it off, but hitting the limit in March was also kinda brutal. The question on my mind is: to what extent are we pretending everything is fine, and to what extent is Bitcoin overvalued and a bubble? We still can’t trust miners We have successfully convinced miners to keep the blocksize small just because we didn’t trust miners to keep the blocksize small. Should I say more? You are just spreading FUD! Strictly speaking that is correct. In absence of hard evidence that nothing bad is or isn’t going to happen, this is indeed about fear, uncertainty and doubt. But this is not FUD in the sense that I’m purposefully spreading misinformation or irrational fear. I am painting a worst case scenario here on purpose. For which I think it is likely enough to merit action, and that the action itself is not worse than the problem it solves. Probability * cost > solution cost. If you can remove my FUD entirely with hard evidence then that would be great! Just remind me again later I will, at 15 days, 5 days, 1 day and then I will wish everyone good luck with this blocksize limit experiment. No hard feelings. This is all certainly not economically conservative, and highly unusual for something which we believe is worth so much. But at least Bitcoin is not boring! Disclaimer: I am not significantly invested in BTC financially. I want Bitcoin to succeed and gain widespread adoption for its social and political benefits (and because it is cool). TL;DR: People could move to alt-coins and non-existent 2nd layer solutions because of potential usability problems during the halving caused by a fixed 1Mb blocksize-limit. Last chance to start voting for BIP 109 is in exactly one month to increase to 2Mb.
Why is a BIP148 mining pool a big deal? If ~30% of miners are signalling SegWit, doesn't that mean UASF already has ~30% of the hashrate come August 1?
Obviously, having significant hashing power is essential for BIP148 to succeed. BIP148 requires the miner of any new blocks from August come from a miner who is signalling SegWit. According to this, the miners currently signalling SegWit is currently sitting around 30%. So, unless there is a drastic change in what those miners signal between now and then (which is a possibility, I acknowledge), from August 1 we will have ~30% of the hashrate, which is quite competitive, right? So why then do I see people celebrating that there is now a mining pool for BIP148, and concerned that BIP148 hashrate is something like .18% (last I heard). Surely any SegWit signalling hashrate is BIP148 hashrate, am I right? I feel like I've gotten mixed up somewhere along the way, but I don't know where. :/ Edit: Now I understand my mistake. BobAlison explained my error.
Until now I have always kept a little Bitcoin (25% of crypto portfolio). However yesterday two things changed my mind and made me actually think of bitcoin as a bad investment, I will explain why. The first thing I noticed was it is now becoming apparent that Segwit is going to have a hard time reaching the 95% threshold that they have set to activate. In fact it currently looks like its stalled out at 24% https://blockchain.info/charts/bip-9-segwit The second thing is that the amount of unconfirmed transactions is now consistently backlogged https://blockchain.info/unconfirmed-transactions I think Bitcoin is now in somewhat of a crisis. Their only real solution looks like it won't activate. This solution took them a good year until they were ready. If it isn't implemented then it's going to get nasty really quickly. They have a consistently growing backlog and no way of quickly making a decision to resolve the issue. Anyway, I have always thought Dash would win, hence 75% of my crypto portfolio being in here but I no longer feel comfortable to hedge against Dash winning the race. No other top digital asset looks like a safe hedge these days. Bitcoin (crisis mode) Ethereum (crisis mode) Litecoin (no real development). It's a telling sign that Dash is definitely going in the right direction.
Bitcoin Improvement Proposals. Contribute to bitcoin/bips development by creating an account on GitHub. The U.S. Federal Reserve's open-ended easing program is a long-run positive for bitcoin's (BTC) price. Bitcoin is marching northwards as the Federal Reserve’s extraordinary economic measures boosts risk appetite in the traditional markets. Since Bitcoin is a distributed system, it is obviously open-source software. Whoever wants can contribute towards improving the system, obviously reaching the consensus of most of the network. Therefore, in order to make any kind of modification to Bitcoin, there is a standard called BIP. What are BIPs. The Bitcoin community is very large. Live Bitcoin Prices and Charts The live CFD chart and prices below will offer readers a useful look at the Bitcoin market. 11 November 2013, 11:59am, And another $1m goes missing from a Bitcoin bank, this time from bips.me. Clearly, if you have Bitcoins, you need to be very careful where you store them. For more details see businessinsider.com. BIPS is one bitcoin payment solution provider. BIPS operates as a Payment Service Provider (PSP) specializing in the technical aspects of accepting cryptocurrencies - such as bitcoin. buy and sell bitcoins buy bitcoins buy files for bitcoins buy products with bitcoins buy services with bitcoins calculators charts community convertors
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