submitted by FixedFloat to Bitcoin [link] [comments]
This post has been written to draw Blockchain.com's attention to the issues of its product.Blockchain.com (formerly Blockchain.info) was founded in 2011 and with no doubt has helped the Bitcoin community to create a block explorer and has proven itself as a valuable service. Millions of people from all over the world use their wallet. However, time goes on, Bitcoin develops, but one of the main cryptocurrency companies not only slows down the process of its development, but also discredits the usability of cryptocurrencies. Why is that? We have tried to explain that in this post.
1. Lack of Segwit Address SupportThis is the most painful problem for our service. To receive cryptocurrency we use segwit addresses by default. If a customer contacts our support, we can of course change an address in an order to P2SH (the one that begins with number "3"), but it reduces the usability of the service. Why don't we use P2SH by default? It is less beneficial both for us and for our client, as the cost of the consolidation of the transaction is taken into account when calculating the exchange rate. With a high network load and with orders for a small amount, the commission becomes significant. To compare — segwit addresses (or Bech32 that starts with "bc1") are 15% more advantageous than P2SH.
Segwit (Segregated Witness) was activated in 2017. At the end of the same year the CEO of Blockchain.info announced its support starting from (most likely) 2018. We can understand certain fears at the beginning of the way, as the company's security system is for sure not that bad. However more than 2 years have passed since then and that is a lot for the crypto world.
2. Using Legacy (P2PKH) Addresses OnlyAs of now only a P2PKH address (that starts with number "1") is used in the Blockchain.com wallet to receive cryptocurrency. Why is that bad? It is unfavorable for the users of this wallet. They spend 29% more than those using P2SH addresses.
3. Confusion with PAX and USD DigitalChanging the names of the currencies from one to another only in a Blockchain.com wallet is a rather strange decision. The key problem is that nowhere in the wallet are there any clues that this is an ERC-20 PAX token on the Ethereum blockchain. New wallet users will most likely be confused by this.
We sometimes get questions: "do we have USD Digital to buy or to sell?" and our technical support is forced to explain that it is PAX.
4. Incompetence of mobile application developersIn fact, this post was inspired by this particular problem. We will not focus on performance or shortcomings, we will just tell you about the main issue.
It is worth starting with questions. What problem does a mobile application solve when a person needs to pay for something? What is the best way to fill in the recipient address and the payment amount on the smartphone? Answer: QR code.
Scanning the QR code in this application is done not just badly, but also in such a way that creates maximum number of problems for a user.
The fact is that in the Android application when scanning code with the bitcoin:?amount=
Do not believe? Try it yourself. Amount to insert — 0.00143452 BTC
After receiving information on such a problem from our users, we began to monitor updates to this application. After 2 updates had come out, the problem was not fixed.
And what about iOS? When scanning a QR code with a sum in iOS , the sum value is simply not inserted into the field! No comments. Bravo!
Blockchain.com wallet has different currencies, not just Bitcoin. Let's try Ethereum. You want to scan QR codes for Ethereum payment with the relevant sum? There is no such possibility. The application will respond with an "Invalid address" to all such codes:
But there are applications that understand all such formats, or at least one of them. The string parsing function is pretty trivial and should not be a problem for the developer.
This article has been written based on the experience of using the application of the members of our team (who have used it for many years) and our users.
We encourage Blockchain.com to fix at least 3 of the 4 problems that we covered in this article. We still hope that the company will work on the bugs and will earn back trust of its users.
In the meantime — use other applications! ;)
The post is published on our blog:https://fixedfloat.com/blog/guides/how-blockchain-com-harms
submitted by D-platform to u/D-platform [link] [comments]
1. What is Bitcoin (BTC)?
2. Bitcoin’s core featuresFor a more beginner’s introduction to Bitcoin, please visit Binance Academy’s guide to Bitcoin.
Unspent Transaction Output (UTXO) modelA UTXO transaction works like cash payment between two parties: Alice gives money to Bob and receives change (i.e., unspent amount). In comparison, blockchains like Ethereum rely on the account model.
Nakamoto consensusIn the Bitcoin network, anyone can join the network and become a bookkeeping service provider i.e., a validator. All validators are allowed in the race to become the block producer for the next block, yet only the first to complete a computationally heavy task will win. This feature is called Proof of Work (PoW).
The probability of any single validator to finish the task first is equal to the percentage of the total network computation power, or hash power, the validator has. For instance, a validator with 5% of the total network computation power will have a 5% chance of completing the task first, and therefore becoming the next block producer.
Since anyone can join the race, competition is prone to increase. In the early days, Bitcoin mining was mostly done by personal computer CPUs.
As of today, Bitcoin validators, or miners, have opted for dedicated and more powerful devices such as machines based on Application-Specific Integrated Circuit (“ASIC”).
Proof of Work secures the network as block producers must have spent resources external to the network (i.e., money to pay electricity), and can provide proof to other participants that they did so.
With various miners competing for block rewards, it becomes difficult for one single malicious party to gain network majority (defined as more than 51% of the network’s hash power in the Nakamoto consensus mechanism). The ability to rearrange transactions via 51% attacks indicates another feature of the Nakamoto consensus: the finality of transactions is only probabilistic.
Once a block is produced, it is then propagated by the block producer to all other validators to check on the validity of all transactions in that block. The block producer will receive rewards in the network’s native currency (i.e., bitcoin) as all validators approve the block and update their ledgers.
Block productionThe Bitcoin protocol utilizes the Merkle tree data structure in order to organize hashes of numerous individual transactions into each block. This concept is named after Ralph Merkle, who patented it in 1979.
With the use of a Merkle tree, though each block might contain thousands of transactions, it will have the ability to combine all of their hashes and condense them into one, allowing efficient and secure verification of this group of transactions. This single hash called is a Merkle root, which is stored in the Block Header of a block. The Block Header also stores other meta information of a block, such as a hash of the previous Block Header, which enables blocks to be associated in a chain-like structure (hence the name “blockchain”).
An illustration of block production in the Bitcoin Protocol is demonstrated below.
Block time and mining difficultyBlock time is the period required to create the next block in a network. As mentioned above, the node who solves the computationally intensive task will be allowed to produce the next block. Therefore, block time is directly correlated to the amount of time it takes for a node to find a solution to the task. The Bitcoin protocol sets a target block time of 10 minutes, and attempts to achieve this by introducing a variable named mining difficulty.
Mining difficulty refers to how difficult it is for the node to solve the computationally intensive task. If the network sets a high difficulty for the task, while miners have low computational power, which is often referred to as “hashrate”, it would statistically take longer for the nodes to get an answer for the task. If the difficulty is low, but miners have rather strong computational power, statistically, some nodes will be able to solve the task quickly.
Therefore, the 10 minute target block time is achieved by constantly and automatically adjusting the mining difficulty according to how much computational power there is amongst the nodes. The average block time of the network is evaluated after a certain number of blocks, and if it is greater than the expected block time, the difficulty level will decrease; if it is less than the expected block time, the difficulty level will increase.
What are orphan blocks?In a PoW blockchain network, if the block time is too low, it would increase the likelihood of nodes producingorphan blocks, for which they would receive no reward. Orphan blocks are produced by nodes who solved the task but did not broadcast their results to the whole network the quickest due to network latency.
It takes time for a message to travel through a network, and it is entirely possible for 2 nodes to complete the task and start to broadcast their results to the network at roughly the same time, while one’s messages are received by all other nodes earlier as the node has low latency.
Imagine there is a network latency of 1 minute and a target block time of 2 minutes. A node could solve the task in around 1 minute but his message would take 1 minute to reach the rest of the nodes that are still working on the solution. While his message travels through the network, all the work done by all other nodes during that 1 minute, even if these nodes also complete the task, would go to waste. In this case, 50% of the computational power contributed to the network is wasted.
The percentage of wasted computational power would proportionally decrease if the mining difficulty were higher, as it would statistically take longer for miners to complete the task. In other words, if the mining difficulty, and therefore targeted block time is low, miners with powerful and often centralized mining facilities would get a higher chance of becoming the block producer, while the participation of weaker miners would become in vain. This introduces possible centralization and weakens the overall security of the network.
However, given a limited amount of transactions that can be stored in a block, making the block time too longwould decrease the number of transactions the network can process per second, negatively affecting network scalability.
3. Bitcoin’s additional features
Segregated Witness (SegWit)Segregated Witness, often abbreviated as SegWit, is a protocol upgrade proposal that went live in August 2017.
SegWit separates witness signatures from transaction-related data. Witness signatures in legacy Bitcoin blocks often take more than 50% of the block size. By removing witness signatures from the transaction block, this protocol upgrade effectively increases the number of transactions that can be stored in a single block, enabling the network to handle more transactions per second. As a result, SegWit increases the scalability of Nakamoto consensus-based blockchain networks like Bitcoin and Litecoin.
SegWit also makes transactions cheaper. Since transaction fees are derived from how much data is being processed by the block producer, the more transactions that can be stored in a 1MB block, the cheaper individual transactions become.
The legacy Bitcoin block has a block size limit of 1 megabyte, and any change on the block size would require a network hard-fork. On August 1st 2017, the first hard-fork occurred, leading to the creation of Bitcoin Cash (“BCH”), which introduced an 8 megabyte block size limit.
Conversely, Segregated Witness was a soft-fork: it never changed the transaction block size limit of the network. Instead, it added an extended block with an upper limit of 3 megabytes, which contains solely witness signatures, to the 1 megabyte block that contains only transaction data. This new block type can be processed even by nodes that have not completed the SegWit protocol upgrade.
Furthermore, the separation of witness signatures from transaction data solves the malleability issue with the original Bitcoin protocol. Without Segregated Witness, these signatures could be altered before the block is validated by miners. Indeed, alterations can be done in such a way that if the system does a mathematical check, the signature would still be valid. However, since the values in the signature are changed, the two signatures would create vastly different hash values.
For instance, if a witness signature states “6,” it has a mathematical value of 6, and would create a hash value of 12345. However, if the witness signature were changed to “06”, it would maintain a mathematical value of 6 while creating a (faulty) hash value of 67890.
Since the mathematical values are the same, the altered signature remains a valid signature. This would create a bookkeeping issue, as transactions in Nakamoto consensus-based blockchain networks are documented with these hash values, or transaction IDs. Effectively, one can alter a transaction ID to a new one, and the new ID can still be valid.
This can create many issues, as illustrated in the below example:
Since the transaction malleability issue is fixed, Segregated Witness also enables the proper functioning of second-layer scalability solutions on the Bitcoin protocol, such as the Lightning Network.
Lightning NetworkLightning Network is a second-layer micropayment solution for scalability.
Specifically, Lightning Network aims to enable near-instant and low-cost payments between merchants and customers that wish to use bitcoins.
Lightning Network was conceptualized in a whitepaper by Joseph Poon and Thaddeus Dryja in 2015. Since then, it has been implemented by multiple companies. The most prominent of them include Blockstream, Lightning Labs, and ACINQ.
A list of curated resources relevant to Lightning Network can be found here.
In the Lightning Network, if a customer wishes to transact with a merchant, both of them need to open a payment channel, which operates off the Bitcoin blockchain (i.e., off-chain vs. on-chain). None of the transaction details from this payment channel are recorded on the blockchain, and only when the channel is closed will the end result of both party’s wallet balances be updated to the blockchain. The blockchain only serves as a settlement layer for Lightning transactions.
Since all transactions done via the payment channel are conducted independently of the Nakamoto consensus, both parties involved in transactions do not need to wait for network confirmation on transactions. Instead, transacting parties would pay transaction fees to Bitcoin miners only when they decide to close the channel.
One limitation to the Lightning Network is that it requires a person to be online to receive transactions attributing towards him. Another limitation in user experience could be that one needs to lock up some funds every time he wishes to open a payment channel, and is only able to use that fund within the channel.
However, this does not mean he needs to create new channels every time he wishes to transact with a different person on the Lightning Network. If Alice wants to send money to Carol, but they do not have a payment channel open, they can ask Bob, who has payment channels open to both Alice and Carol, to help make that transaction. Alice will be able to send funds to Bob, and Bob to Carol. Hence, the number of “payment hubs” (i.e., Bob in the previous example) correlates with both the convenience and the usability of the Lightning Network for real-world applications.
Schnorr Signature upgrade proposalElliptic Curve Digital Signature Algorithm (“ECDSA”) signatures are used to sign transactions on the Bitcoin blockchain.
However, many developers now advocate for replacing ECDSA with Schnorr Signature. Once Schnorr Signatures are implemented, multiple parties can collaborate in producing a signature that is valid for the sum of their public keys.
This would primarily be beneficial for network scalability. When multiple addresses were to conduct transactions to a single address, each transaction would require their own signature. With Schnorr Signature, all these signatures would be combined into one. As a result, the network would be able to store more transactions in a single block.
The reduced size in signatures implies a reduced cost on transaction fees. The group of senders can split the transaction fees for that one group signature, instead of paying for one personal signature individually.
Schnorr Signature also improves network privacy and token fungibility. A third-party observer will not be able to detect if a user is sending a multi-signature transaction, since the signature will be in the same format as a single-signature transaction.
4. Economics and supply distributionThe Bitcoin protocol utilizes the Nakamoto consensus, and nodes validate blocks via Proof-of-Work mining. The bitcoin token was not pre-mined, and has a maximum supply of 21 million. The initial reward for a block was 50 BTC per block. Block mining rewards halve every 210,000 blocks. Since the average time for block production on the blockchain is 10 minutes, it implies that the block reward halving events will approximately take place every 4 years.
As of May 12th 2020, the block mining rewards are 6.25 BTC per block. Transaction fees also represent a minor revenue stream for miners.
Written by the CoinEx Institution, this series of jocular and easy to understand articles will show you everything you need to know about major cryptocurrencies, making you fully prepared before jumping into crypto!submitted by CoinExcom to Bitcoincash [link] [comments]
BCH, which represents Bitcoin Cash, shares some same features as its big brother Bitcoin (BTC). Both are cryptocurrencies based on decentralization, using a peer-to-peer network and consensus initiative, going open source, and with the blockchain as the underlying technology.
Now that we have BTC, what is BCH for?
To answer this question, we have to trace back to the source of BCH — BTC. Nakamoto created BTC in 2008, and he also limited the block size to 1M at that time. This restriction not only guarantees the participation of weak-performance personal computers, but also prevents the risk of attacks overloading the Bitcoin network; after all, the system was still in its infancy and was very fragile. Under the 1M limit, a block can hold up to about 2000 transactions in 10 minutes, or 7 transactions per second.
As users of BTC transactions were growing in numbers with time passing by, the 1M block size has been unable to carry the ever-increasing transaction volume. As a result, the BTC network appeared congested, transaction fees soared, and transaction packaging became time-consuming…
Such problems gave rise to the call for capacity expansion in the BTC community. Some developers, represented by the core developer Core, hoped to ease the BTC congestion by Segregated Witness + Lightning Network. The following three years has seen users argue over this issue. After all, it involved too many people and too many things, which can’t be solved in a short while.
Then came the time when community conflicts seemed to have reached deadlock, and disputes over the hard fork were getting intense. On August 1, 2017, BTC finally got a hard fork, and its little bro, BCH, was generated!
Due to the version switching, the BTC blockchain was forked into two separate blockchains. Before the fork, everyone who owned BTC was entitled to the same amount of BCH. In this way, the upper limit of the block was upgraded to 8M, and later to 32M, which solved such problems as high fees, slow confirmation, and poor practicability in the old version of the BTC system, and fulfilled BTC’s commitment to being the “peer-to-peer electronic cash”.
Since then, the Bitcoin community has been divided into two and everyone is happy.
It’s fair to say that BTC is the predecessor of BCH, but after the fork, BCH has always been considered as “BTC” in a new direction. Congestion will hardly happen in the BCH community as BCH has larger blocks and can handle more transactions, unlike BTC, which proved ineffective in processing growing transactions due to small blocks. That is also the most obvious difference between the two, making the transaction fee of BCH much lower than that of BTC.
The BCH community is theoretically different from the BTC community under the current Core team. To put it simply, there remains little connection between BCH and BTC, and BCH, separated from its predecessor, has become a brand new cryptocurrency.
BCH also has its advantages, such as decentralization, anonymity, fixed listing and smart contracts.
Overseas, BCH supporters include former BitcoinCore chief developers Gavin Andresen and Roger Ver (known as Bitcoin Jesus).
In China, many of BCH supporters are veterans in this field, including Wu Jihan, Founder and CEO of Bitmain, Yang Haipo, Founder of ViaBTC / CoinEx, and Jiang Zhuoer, Founder of BTC.TOP Mining Pool.
At present, the circulating market value of BCH has reached 59.1 billion. By April 2020, BCH will perform the first halving at a block height of 630,000, and the reward will be reduced by 50% to 6.25 BCH after the halving.
If you want to enter the cryptocurrency field, come on, learn more and trade on CoinEx! https://www.coinex.com/
Yes. You pick a peer and after some setup, create a bitcoin transaction to fund the lightning channel; it’ll then take another transaction to close it and release your funds. You and your peer always hold a bitcoin transaction to get your funds whenever you want: just broadcast to the blockchain like normal. In other words, you and your peer create a shared account, and then use Lightning to securely negotiate who gets how much from that shared account, without waiting for the bitcoin blockchain.
Yes, Lightning is open source. Anyone can review the code (in the same way as the bitcoin code)
Similar to the bitcoin network, no one will ever own or control the Lightning Network. The code is open source and free for anyone to download and review. Anyone can run a node and be part of the network.
No, your bitcoin will never leave the blockchain. Instead your bitcoin will be held in a multi-signature address as long as your channel stays open. When the channel is closed; the final transaction will be added to the blockchain. “Off-chain” is not a perfect term, but it is used due to the fact that the transfer of ownership is no longer reflected on the blockchain until the channel is closed.
Example: A and B have a channel. 1 BTC each. A sends B 0.5 BTC. B sends back 0.25 BTC. Balance should be A = 0.75, B = 1.25. If A gets disconnected, B can publish the first Tx where the balance was A = 0.5 and B = 1.5. If the node B does in fact attempt to cheat by publishing an old state (such as the A=0.5 and B=1.5 state), this cheat can then be detected on-chain and used to steal the cheaters funds, i.e., A can see the closing transaction, notice it's an old one and grab all funds in the channel (A=2, B=0). The time that A has in order to react to the cheating counterparty is given by the CheckLockTimeVerify (CLTV) in the cheating transaction, which is adjustable. So if A foresees that it'll be able to check in about once every 24 hours it'll require that the CLTV is at least that large, if it's once a week then that's fine too. You definitely do not need to be online and watching the chain 24/7, just make sure to check in once in a while before the CLTV expires. Alternatively you can outsource the watch duties, in order to keep the CLTV timeouts low. This can be achieved both with trusted third parties or untrusted ones (watchtowers). In the case of a unilateral close, e.g., you just go offline and never come back, the other endpoint will have to wait for that timeout to expire to get its funds back. So peers might not accept channels with extremely high CLTV timeouts. -- Source
Tiny payments are possible: since fees are proportional to the payment amount, you can pay a fraction of a cent; accounting is even done in thousandths of a satoshi. Payments are settled instantly: the money is sent in the time it takes to cross the network to your destination and back, typically a fraction of a second.
Yes, but not in theory. You could make a poorer lightning network without it, which has higher risks when establishing channels (you might have to wait a month if things go wrong!), has limited channel lifetime, longer minimum payment expiry times on each hop, is less efficient and has less robust outsourcing. The entire spec as written today assumes segregated witness, as it solves all these problems.
No, for now. For the first version of the protocol, if you wanted to send a normal bitcoin transaction using your channel, you have to close it, send the funds, then reopen the channel (3 transactions). In future versions, you and your peer would agree to spend out of your lightning channel funds just like a normal bitcoin payment, allowing you to use your lightning wallet like a normal bitcoin wallet.
Not really. Anyone can set up a node, and so it’s a race to the bottom on fees. In practice, we may see the network use a nominal fee and not change very much, which only provides an incremental incentive to route on a node you’re going to use yourself, and not enough to run one merely for fees. Having clients use criteria other than fees (e.g. randomness, diversity) in route selection will also help this.
Lightning is already being tested on the Mainnet Twitter Link but as for a specific date, Jameson Lopp says it best
Nope, because there is no custody ever involved. It's just like forwarding packets. -- Source
Furthermore, the Lightning Network scales not with the transaction throughput of the underlying blockchain, but with modern data processing and latency limits - payments can be made nearly as quickly as packets can be sent. -- Source
Each exchange will get to decide and need to implement the software into their system, but some ideas have been outlined here: Google Doc - Lightning Exchanges
Note that by virtue of the usual benefits of cost-less, instantaneous transactions, lightning will make arbitrage between exchanges much more efficient and thus lead to consistent pricing across exchange that adopt it. -- Source
According to Rusty's calculations we should be able to store 1 million nodes in about 100 MB, so that should work even for mobile phones. Beyond that we have some proposals ready to lighten the load on endpoints, but we'll cross that bridge when we get there. -- Source
No you'd remember the information from the last time you started the app and only sync the differences. This is not yet implemented, but it shouldn't be too hard to get a preliminary protocol working if that turns out to be a problem. -- Source
Lightning is based on participants in the network running lightning node software that enables them to interact with other nodes. This does not require being a full bitcoin node, but you will have to run "lnd", "eclair", or one of the other node softwares listed above.
All lightning wallets have node software integrated into them, because that is necessary to create payment channels and conduct payments on the network, but you can also intentionally run lnd or similar for public benefit - e.g. you can hold open payment channels or channels with higher volume, than you need for your own transactions. You would be compensated in modest fees by those who transact across your node with multi-hop payments. -- Source
Sure, you can help write up educational material. You can learn and read more about the tech at http://dev.lightning.community/resources. You can test the various desktop and mobile apps out there (Lightning Desktop, Zap, Eclair apps). -- Source
No -- Source
lit doesn't depend on having your own full node -- it automatically connects to full nodes on the network. -- Source
LND uses a light client mode, so it doesn't require a full node. The name of the light client it uses is called neutrino
Upon opening a channel, the two endpoints first agree on a reserve value, below which the channel balance may not drop. This is to make sure that both endpoints always have some skin in the game as rustyreddit puts it :-)
For a cheat to become worth it, the opponent has to be absolutely sure that you cannot retaliate against him during the timeout. So he has to make sure you never ever get network connectivity during that time. Having someone else also watching for channel closures and notifying you, or releasing a canned retaliation, makes this even harder for the attacker. This is because if he misjudged you being truly offline you can retaliate by grabbing all of its funds. Spotty connections, DDoS, and similar will not provide the attacker the necessary guarantees to make cheating worthwhile. Any form of uncertainty about your online status acts as a deterrent to the other endpoint. -- Source
You typically want to have more than one channel open at any given time for redundancy's sake. And we imagine open and close will probably be automated for the most part. In fact we already have a feature in LND called autopilot that can automatically open channels for a user.
Frequency will depend whether the funds are needed on-chain or more useful on LN. -- Source
You don't really set up a "node" in the sense that anyone with more than one channel can automatically be a node and route payments. Fees on LN can be set by the node, and can change dynamically on the network. -- Source
Yes but it has to be implemented in the Lightning software being used. -- Source
You won't have to do anything. With autopilot enabled, it'll automatically open and close channels based on the availability of the network. -- Source
We demonstrated that the idea of forward blocks provides a unifying mechanism that:
• Provides on-chain settlement scaling of up to 3584x current limits as a soft-fork;
• Provides for an (optional) proof-of-work upgrade as a soft fork;
• Limits growth of validation costs with a flexible weight limit;
• Decreases centralization risks through the adoption of sharding; and
• Provides a framework for ledger accounting in future protocol extensions including but not limited to:
– A rebatable fee market with consensus-determined transaction clearing fee rates;
– Confidential transactions for obscuring transaction amounts;
– Mimblewimble, ring signatures, or anonymous spends for obscuring the spend graph; and
– Sidechain value-transfer mechanisms.
While there are many moving parts to this proposal, it is not beyond the level of complexity of prior extensions adopted by bitcoin (e.g. segregated witness), and achieves a variety of benefits comparable in magnitude.
Dear Blockstream Investor!
A lot of exciting things have happened since our last update and we are preparing several public announcements over the coming weeks. Below is an update on our progress:
As background on the Bitcoin ecosystem, although none of Blockstream’s business plans are conditional on activation of Segregated Witness (“SegWit”), the “SegWit versus Bitcoin Unlimited” story remains a major conversation topic in the Bitcoin community. We agree with the overwhelming majority of technical leaders in the ecosystem who state that SegWit is not only the safer way to increase transaction capacity in the short-term, but it also includes other protocol improvements that will enable a significant amount of future innovation. There are some suggestions that the miners’ delays in activation of SegWit are economically motivated rather than technical in nature -- delays allow miners to collect artificially high fees from the strong demand for Bitcoin transactions in the short-term, and the assumption is that fees would decrease with the activation of SegWit and layer2 retail and micropayment applications, such as Lightning, which compete for fees. (Lightning fees are paid to peer-to-peer liquidity providers, and not miners).
On March 10th, the bitcoin-based ETF proposed by Cameron and Tyler Winklevoss was rejected by the SEC. The decision was based on several factors, including concerns about the fact that bitcoin exchanges are largely unregulated, affecting the quality of the price data used to support the ETF. Reaction to the decision was mixed; however our view is that this is only a temporary blip in bitcoin’s progress. (More in this article, which includes Adam’s thoughts on the ruling.) There are other bitcoin ETF’s awaiting an SEC decision, and it is likely that new applications will be filed in the future. Many of the SEC concerns are addressed by Blockstream products and technologies, so future approval of a bitcoin ETF may be more realistic than the specific reasoning provided in the SEC decision would suggest.
In late February, the Enterprise Ethereum Alliance was announced, with large partners including Microsoft, Accenture, JP Morgan Chase, as well as other large companies and Blockchain startups. The alliance, which resembles organizations like R3 and Hyperledger, will attempt to address some of the problems encountered by businesses that want to use Ethereum for a number of different use cases. We do not view these groups as ma