Satoshis - Bitcoin Wiki

Bitcoin Newcomers FAQ - Please read!

Welcome to the /Bitcoin Sticky FAQ

You've probably been hearing a lot about Bitcoin recently and are wondering what's the big deal? Most of your questions should be answered by the resources below but if you have additional questions feel free to ask them in the comments.
It all started with the release of the release of Satoshi Nakamoto's whitepaper however that will probably go over the head of most readers so we recommend the following videos for a good starting point for understanding how bitcoin works and a little about its long term potential:
Some other great resources include Lopp.net, the Princeton crypto series and James D'Angelo's Bitcoin 101 Blackboard series.
Some excellent writing on Bitcoin's value proposition and future can be found at the Satoshi Nakamoto Institute.
Some Bitcoin statistics can be found here and here. Developer resources can be found here. Peer-reviewed research papers can be found here.
Potential upcoming protocol improvements and scaling resources here and here.
The number of times Bitcoin was declared dead by the media can be found here (LOL!)

Key properties of Bitcoin

Where can I buy bitcoins?

Bitcoin.org and BuyBitcoinWorldwide.com are helpful sites for beginners. You can buy or sell any amount of bitcoin (even just a few dollars worth) and there are several easy methods to purchase bitcoin with cash, credit card or bank transfer. Some of the more popular resources are below, also check out the bitcoinity exchange resources for a larger list of options for purchases.
Here is a listing of local ATMs. If you would like your paycheck automatically converted to bitcoin use Bitwage.
Note: Bitcoins are valued at whatever market price people are willing to pay for them in balancing act of supply vs demand. Unlike traditional markets, bitcoin markets operate 24 hours per day, 365 days per year. Preev is a useful site that that shows how much various denominations of bitcoin are worth in different currencies. Alternatively you can just Google "1 bitcoin in (your local currency)".

Securing your bitcoins

With bitcoin you can "Be your own bank" and personally secure your bitcoins OR you can use third party companies aka "Bitcoin banks" which will hold the bitcoins for you.
Note: For increased security, use Two Factor Authentication (2FA) everywhere it is offered, including email!
2FA requires a second confirmation code to access your account making it much harder for thieves to gain access. Google Authenticator and Authy are the two most popular 2FA services, download links are below. Make sure you create backups of your 2FA codes.
Google Auth Authy OTP Auth
Android Android N/A
iOS iOS iOS

Watch out for scams

As mentioned above, Bitcoin is decentralized, which by definition means there is no official website or Twitter handle or spokesperson or CEO. However, all money attracts thieves. This combination unfortunately results in scammers running official sounding names or pretending to be an authority on YouTube or social media. Many scammers throughout the years have claimed to be the inventor of Bitcoin. Websites like bitcoin(dot)com and the btc subreddit are active scams. Almost all altcoins (shitcoins) are marketed heavily with big promises but are really just designed to separate you from your bitcoin. So be careful: any resource, including all linked in this document, may in the future turn evil. Don't trust, verify. Also as they say in our community "Not your keys, not your coins".

Where can I spend bitcoins?

Check out spendabit or bitcoin directory for millions of merchant options. Also you can spend bitcoin anywhere visa is accepted with bitcoin debit cards such as the CashApp card. Some other useful site are listed below.
Store Product
Gyft Gift cards for hundreds of retailers including Amazon, Target, Walmart, Starbucks, Whole Foods, CVS, Lowes, Home Depot, iTunes, Best Buy, Sears, Kohls, eBay, GameStop, etc.
Spendabit, Overstock and The Bitcoin Directory Retail shopping with millions of results
ShakePay Generate one time use Visa cards in seconds
NewEgg and Dell For all your electronics needs
Bitwa.la, Coinbills, Piixpay, Bitbill.eu, Bylls, Coins.ph, Bitrefill, LivingRoomofSatoshi, Coinsfer, and more Bill payment
Menufy, Takeaway and Thuisbezorgd NL Takeout delivered to your door
Expedia, Cheapair, Destinia, Abitsky, SkyTours, the Travel category on Gyft and 9flats For when you need to get away
Cryptostorm, Mullvad, and PIA VPN services
Namecheap, Porkbun Domain name registration
Stampnik Discounted USPS Priority, Express, First-Class mail postage
Coinmap and AirBitz are helpful to find local businesses accepting bitcoins. A good resource for UK residents is at wheretospendbitcoins.co.uk.
There are also lots of charities which accept bitcoin donations.

Merchant Resources

There are several benefits to accepting bitcoin as a payment option if you are a merchant;
If you are interested in accepting bitcoin as a payment method, there are several options available;

Can I mine bitcoin?

Mining bitcoins can be a fun learning experience, but be aware that you will most likely operate at a loss. Newcomers are often advised to stay away from mining unless they are only interested in it as a hobby similar to folding at home. If you want to learn more about mining you can read more here. Still have mining questions? The crew at /BitcoinMining would be happy to help you out.
If you want to contribute to the bitcoin network by hosting the blockchain and propagating transactions you can run a full node using this setup guide. If you would prefer to keep it simple there are several good options. You can view the global node distribution here.

Earning bitcoins

Just like any other form of money, you can also earn bitcoins by being paid to do a job.
Site Description
WorkingForBitcoins, Bitwage, Cryptogrind, Coinality, Bitgigs, /Jobs4Bitcoins, BitforTip, Rein Project Freelancing
Lolli Earn bitcoin when you shop online!
OpenBazaar, Purse.io, Bitify, /Bitmarket, 21 Market Marketplaces
/GirlsGoneBitcoin NSFW Adult services
A-ads, Coinzilla.io Advertising
You can also earn bitcoins by participating as a market maker on JoinMarket by allowing users to perform CoinJoin transactions with your bitcoins for a small fee (requires you to already have some bitcoins.

Bitcoin-Related Projects

The following is a short list of ongoing projects that might be worth taking a look at if you are interested in current development in the bitcoin space.
Project Description
Lightning Network Second layer scaling
Blockstream, Rootstock and Drivechain Sidechains
Hivemind and Augur Prediction markets
Tierion and Factom Records & Titles on the blockchain
BitMarkets, DropZone, Beaver and Open Bazaar Decentralized markets
JoinMarket and Wasabi Wallet CoinJoin implementation
Coinffeine and Bisq Decentralized bitcoin exchanges
Keybase Identity & Reputation management
Abra Global P2P money transmitter network
Bitcore Open source Bitcoin javascript library

Bitcoin Units

One Bitcoin is quite large (hundreds of £/$/€) so people often deal in smaller units. The most common subunits are listed below:
Unit Symbol Value Info
bitcoin BTC 1 bitcoin one bitcoin is equal to 100 million satoshis
millibitcoin mBTC 1,000 per bitcoin used as default unit in recent Electrum wallet releases
bit bit 1,000,000 per bitcoin colloquial "slang" term for microbitcoin (μBTC)
satoshi sat 100,000,000 per bitcoin smallest unit in bitcoin, named after the inventor
For example, assuming an arbitrary exchange rate of $10000 for one Bitcoin, a $10 meal would equal:
For more information check out the Bitcoin units wiki.
Still have questions? Feel free to ask in the comments below or stick around for our weekly Mentor Monday thread. If you decide to post a question in /Bitcoin, please use the search bar to see if it has been answered before, and remember to follow the community rules outlined on the sidebar to receive a better response. The mods are busy helping manage our community so please do not message them unless you notice problems with the functionality of the subreddit.
Note: This is a community created FAQ. If you notice anything missing from the FAQ or that requires clarification you can edit it here and it will be included in the next revision pending approval.
Welcome to the Bitcoin community and the new decentralized economy!
submitted by BitcoinFan7 to Bitcoin [link] [comments]

How To End The Cryptocurrency Exchange "Wild West" Without Crippling Innovation


In case you haven't noticed the consultation paper, staff notice, and report on Quadriga, regulators are now clamping down on Canadian cryptocurrency exchanges. The OSC and other regulatory bodies are still interested in industry feedback. They have not put forward any official regulation yet. Below are some ideas/insights and a proposed framework.



Many of you have limited time to read the full proposal, so here are the highlights:

Offline Multi-Signature

Effective standards to prevent both internal and external theft. Exchange operators are trained and certified, and have a legal responsibility to users.

Regular Transparent Audits

Provides visibility to Canadians that their funds are fully backed on the exchange, while protecting privacy and sensitive platform information.

Insurance Requirements

Establishment of basic insurance standards/strategy, to expand over time. Removing risk to exchange users of any hot wallet theft.


Background and Justifications


Cold Storage Custody/Management
After reviewing close to 100 cases, all thefts tend to break down into more or less the same set of problems:
• Funds stored online or in a smart contract,
• Access controlled by one person or one system,
• 51% attacks (rare),
• Funds sent to the wrong address (also rare), or
• Some combination of the above.
For the first two cases, practical solutions exist and are widely implemented on exchanges already. Offline multi-signature solutions are already industry standard. No cases studied found an external theft or exit scam involving an offline multi-signature wallet implementation. Security can be further improved through minimum numbers of signatories, background checks, providing autonomy and legal protections to each signatory, establishing best practices, and a training/certification program.
The last two transaction risks occur more rarely, and have never resulted in a loss affecting the actual users of the exchange. In all cases to date where operators made the mistake, they've been fully covered by the exchange platforms.
• 51% attacks generally only occur on blockchains with less security. The most prominent cases have been Bitcoin Gold and Ethereum Classic. The simple solution is to enforce deposit limits and block delays such that a 51% attack is not cost-effective.
• The risk of transactions to incorrect addresses can be eliminated by a simple test transaction policy on large transactions. By sending a small amount of funds prior to any large withdrawals/transfers as a standard practice, the accuracy of the wallet address can be validated.
The proposal covers all loss cases and goes beyond, while avoiding significant additional costs, risks, and limitations which may be associated with other frameworks like SOC II.

On The Subject of Third Party Custodians
Many Canadian platforms are currently experimenting with third party custody. From the standpoint of the exchange operator, they can liberate themselves from some responsibility of custody, passing that off to someone else. For regulators, it puts crypto in similar categorization to oil, gold, and other commodities, with some common standards. Platform users would likely feel greater confidence if the custodian was a brand they recognized. If the custodian was knowledgeable and had a decent team that employed multi-sig, they could keep assets safe from internal theft. With the right protections in place, this could be a great solution for many exchanges, particularly those that lack the relevant experience or human resources for their own custody systems.
However, this system is vulnerable to anyone able to impersonate the exchange operators. You may have a situation where different employees who don't know each other that well are interacting between different companies (both the custodian and all their customers which presumably isn't just one exchange). A case study of what can go wrong in this type of environment might be Bitpay, where the CEO was tricked out of 5000 bitcoins over 3 separate payments by a series of emails sent legitimately from a breached computer of another company CEO. It's also still vulnerable to the platform being compromised, as in the really large $70M Bitfinex hack, where the third party Bitgo held one key in a multi-sig wallet. The hacker simply authorized the withdrawal using the same credentials as Bitfinex (requesting Bitgo to sign multiple withdrawal transactions). This succeeded even with the use of multi-sig and two heavily security-focused companies, due to the lack of human oversight (basically, hot wallet). Of course, you can learn from these cases and improve the security, but so can hackers improve their deception and at the end of the day, both of these would have been stopped by the much simpler solution of a qualified team who knew each other and employed multi-sig with properly protected keys. It's pretty hard to beat a human being who knows the business and the typical customer behaviour (or even knows their customers personally) at spotting fraud, and the proposed multi-sig means any hacker has to get through the scrutiny of 3 (or more) separate people, all of whom would have proper training including historical case studies.
There are strong arguments both for and against using use of third party custodians. The proposal sets mandatory minimum custody standards would apply regardless if the cold wallet signatories are exchange operators, independent custodians, or a mix of both.

On The Subject Of Insurance
ShakePay has taken the first steps into this new realm (congratulations). There is no question that crypto users could be better protected by the right insurance policies, and it certainly feels better to transact with insured platforms. The steps required to obtain insurance generally place attention in valuable security areas, and in this case included a review from CipherTrace. One of the key solutions in traditional finance comes from insurance from entities such as the CDIC.
However, historically, there wasn't found any actual insurance payout to any cryptocurrency exchange, and there are notable cases where insurance has not paid. With Bitpay, for example, the insurance agent refused because the issue happened to the third party CEO's computer instead of anything to do with Bitpay itself. With the Youbit exchange in South Korea, their insurance claim was denied, and the exchange ultimately ended up instead going bankrupt with all user's funds lost. To quote Matt Johnson in the original Lloyd's article: “You can create an insurance policy that protects no one – you know there are so many caveats to the policy that it’s not super protective.”
ShakePay's insurance was only reported to cover their cold storage, and “physical theft of the media where the private keys are held”. Physical theft has never, in the history of cryptocurrency exchange cases reviewed, been reported as the cause of loss. From the limited information of the article, ShakePay made it clear their funds are in the hands of a single US custodian, and at least part of their security strategy is to "decline[] to confirm the custodian’s name on the record". While this prevents scrutiny of the custodian, it's pretty silly to speculate that a reasonably competent hacking group couldn't determine who the custodian is. A far more common infiltration strategy historically would be social engineering, which has succeeded repeatedly. A hacker could trick their way into ShakePay's systems and request a fraudulent withdrawal, impersonate ShakePay and request the custodian to move funds, or socially engineer their way into the custodian to initiate the withdrawal of multiple accounts (a payout much larger than ShakePay) exploiting the standard procedures (for example, fraudulently initiating or override the wallet addresses of a real transfer). In each case, nothing was physically stolen and the loss is therefore not covered by insurance.
In order for any insurance to be effective, clear policies have to be established about what needs to be covered. Anything short of that gives Canadians false confidence that they are protected when they aren't in any meaningful way. At this time, the third party insurance market does not appear to provide adequate options or coverage, and effort is necessary to standardize custody standards, which is a likely first step in ultimately setting up an insurance framework.
A better solution compared to third party insurance providers might be for Canadian exchange operators to create their own collective insurance fund, or a specific federal organization similar to the CDIC. Such an organization would have a greater interest or obligation in paying out actual cases, and that would be it's purpose rather than maximizing it's own profit. This would be similar to the SAFU which Binance has launched, except it would cover multiple exchanges. There is little question whether the SAFU would pay out given a breach of Binance, and a similar argument could be made for a insurance fund managed by a collective of exchange operators or a government organization. While a third party insurance provider has the strong market incentive to provide the absolute minimum coverage and no market incentive to payout, an entity managed by exchange operators would have incentive to protect the reputation of exchange operators/the industry, and the government should have the interest of protecting Canadians.

On The Subject of Fractional Reserve
There is a long history of fractional reserve failures, from the first banks in ancient times, through the great depression (where hundreds of fractional reserve banks failed), right through to the 2008 banking collapse referenced in the first bitcoin block. The fractional reserve system allows banks to multiply the money supply far beyond the actual cash (or other assets) in existence, backed only by a system of debt obligations of others. Safely supporting a fractional reserve system is a topic of far greater complexity than can be addressed by a simple policy, and when it comes to cryptocurrency, there is presently no entity reasonably able to bail anyone out in the event of failure. Therefore, this framework is addressed around entities that aim to maintain 100% backing of funds.
There may be some firms that desire but have failed to maintain 100% backing. In this case, there are multiple solutions, including outside investment, merging with other exchanges, or enforcing a gradual restoration plan. All of these solutions are typically far better than shutting down the exchange, and there are multiple cases where they've been used successfully in the past.

Proof of Reserves/Transparency/Accountability
Canadians need to have visibility into the backing on an ongoing basis.
The best solution for crypto-assets is a Proof of Reserve. Such ideas go back all the way to 2013, before even Mt. Gox. However, no Canadian exchange has yet implemented such a system, and only a few international exchanges (CoinFloor in the UK being an example) have. Many firms like Kraken, BitBuy, and now ShakePay use the Proof of Reserve term to refer to lesser proofs which do not actually cryptographically prove the full backing of all user assets on the blockchain. In order for a Proof of Reserve to be effective, it must actually be a complete proof, and it needs to be understood by the public that is expected to use it. Many firms have expressed reservations about the level of transparency required in a complete Proof of Reserve (for example Kraken here). While a complete Proof of Reserves should be encouraged, and there are some solutions in the works (ie TxQuick), this is unlikely to be suitable universally for all exchange operators and users.
Given the limitations, and that firms also manage fiat assets, a more traditional audit process makes more sense. Some Canadian exchanges (CoinSquare, CoinBerry) have already subjected themselves to annual audits. However, these results are not presently shared publicly, and there is no guarantee over the process including all user assets or the integrity and independence of the auditor. The auditor has been typically not known, and in some cases, the identity of the auditor is protected by a NDA. Only in one case (BitBuy) was an actual report generated and publicly shared. There has been no attempt made to validate that user accounts provided during these audits have been complete or accurate. A fraudulent fractional exchange, or one which had suffered a breach they were unwilling to publicly accept (see CoinBene), could easily maintain a second set of books for auditors or simply exclude key accounts to pass an individual audit.
The proposed solution would see a reporting standard which includes at a minimum - percentage of backing for each asset relative to account balances and the nature of how those assets are stored, with ownership proven by the auditor. The auditor would also publicly provide a "hash list", which they independently generate from the accounts provided by the exchange. Every exchange user can then check their information against this public "hash list". A hash is a one-way form of encryption, which fully protects the private information, yet allows anyone who knows that information already to validate that it was included. Less experienced users can take advantage of public tools to calculate the hash from their information (provided by the exchange), and thus have certainty that the auditor received their full balance information. Easy instructions can be provided.
Auditors should be impartial, their identities and process public, and they should be rotated so that the same auditor is never used twice in a row. Balancing the cost of auditing against the needs for regular updates, a 6 month cycle likely makes the most sense.

Hot Wallet Management
The best solution for hot wallets is not to use them. CoinBerry reportedly uses multi-sig on all withdrawals, and Bitmex is an international example known for their structure devoid of hot wallets.
However, many platforms and customers desire fast withdrawal processes, and human validation has a cost of time and delay in this process.
A model of self-insurance or separate funds for hot wallets may be used in these cases. Under this model, a platform still has 100% of their client balance in cold storage and holds additional funds in hot wallets for quick withdrawal. Thus, the risk of those hot wallets is 100% on exchange operators and not affecting the exchange users. Since most platforms typically only have 1%-5% in hot wallets at any given time, it shouldn't be unreasonable to build/maintain these additional reserves over time using exchange fees or additional investment. Larger withdrawals would still be handled at regular intervals from the cold storage.
Hot wallet risks have historically posed a large risk and there is no established standard to guarantee secure hot wallets. When the government of South Korea dispatched security inspections to multiple exchanges, the results were still that 3 of them got hacked after the inspections. If standards develop such that an organization in the market is willing to insure the hot wallets, this could provide an acceptable alternative. Another option may be for multiple exchange operators to pool funds aside for a hot wallet insurance fund. Comprehensive coverage standards must be established and maintained for all hot wallet balances to make sure Canadians are adequately protected.

Current Draft Proposal

(1) Proper multi-signature cold wallet storage.
(a) Each private key is the personal and legal responsibility of one person - the “signatory”. Signatories have special rights and responsibilities to protect user assets. Signatories are trained and certified through a course covering (1) past hacking and fraud cases, (2) proper and secure key generation, and (3) proper safekeeping of private keys. All private keys must be generated and stored 100% offline by the signatory. If even one private keys is ever breached or suspected to be breached, the wallet must be regenerated and all funds relocated to a new wallet.
(b) All signatories must be separate background-checked individuals free of past criminal conviction. Canadians should have a right to know who holds their funds. All signing of transactions must take place with all signatories on Canadian soil or on the soil of a country with a solid legal system which agrees to uphold and support these rules (from an established white-list of countries which expands over time).
(c) 3-5 independent signatures are required for any withdrawal. There must be 1-3 spare signatories, and a maximum of 7 total signatories. The following are all valid combinations: 3of4, 3of5, 3of6, 4of5, 4of6, 4of7, 5of6, or 5of7.
(d) A security audit should be conducted to validate the cold wallet is set up correctly and provide any additional pertinent information. The primary purpose is to ensure that all signatories are acting independently and using best practices for private key storage. A report summarizing all steps taken and who did the audit will be made public. Canadians must be able to validate the right measures are in place to protect their funds.
(e) There is a simple approval process if signatories wish to visit any country outside Canada, with a potential whitelist of exempt countries. At most 2 signatories can be outside of aligned jurisdiction at any given time. All exchanges would be required to keep a compliant cold wallet for Canadian funds and have a Canadian office if they wish to serve Canadian customers.
(2) Regular and transparent solvency audits.
(a) An audit must be conducted at founding, after 3 months of operation, and at least once every 6 months to compare customer balances against all stored cryptocurrency and fiat balances. The auditor must be known, independent, and never the same twice in a row.
(b) An audit report will be published featuring the steps conducted in a readable format. This should be made available to all Canadians on the exchange website and on a government website. The report must include what percentage of each customer asset is backed on the exchange, and how those funds are stored.
(c) The auditor will independently produce a hash of each customer's identifying information and balance as they perform the audit. This will be made publicly available on the exchange and government website, along with simplified instructions that each customer can use to verify that their balance was included in the audit process.
(d) The audit needs to include a proof of ownership for any cryptocurrency wallets included. A satoshi test (spending a small amount) or partially signed transaction both qualify.
(e) Any platform without 100% reserves should be assessed on a regular basis by a government or industry watchdog. This entity should work to prevent any further drop, support any private investor to come in, or facilitate a merger so that 100% backing can be obtained as soon as possible.
(3) Protections for hot wallets and transactions.
(a) A standardized list of approved coins and procedures will be established to constitute valid cold storage wallets. Where a multi-sig process is not natively available, efforts will be undertaken to establish a suitable and stable smart contract standard. This list will be expanded and improved over time. Coins and procedures not on the list are considered hot wallets.
(b) Hot wallets can be backed by additional funds in cold storage or an acceptable third-party insurance provider with a comprehensive coverage policy.
(c) Exchanges are required to cover the full balance of all user funds as denominated in the same currency, or double the balance as denominated in bitcoin or CAD using an established trading rate. If the balance is ever insufficient due to market movements, the firm must rectify this within 24 hours by moving assets to cold storage or increasing insurance coverage.
(d) Any large transactions (above a set threshold) from cold storage to any new wallet addresses (not previously transacted with) must be tested with a smaller transaction first. Deposits of cryptocurrency must be limited to prevent economic 51% attacks. Any issues are to be covered by the exchange.
(e) Exchange platforms must provide suitable authentication for users, including making available approved forms of two-factor authentication. SMS-based authentication is not to be supported. Withdrawals must be blocked for 48 hours in the event of any account password change. Disputes on the negligence of exchanges should be governed by case law.

Steps Forward

Continued review of existing OSC feedback is still underway. More feedback and opinions on the framework and ideas as presented here are extremely valuable. The above is a draft and not finalized.
The process of further developing and bringing a suitable framework to protect Canadians will require the support of exchange operators, legal experts, and many others in the community. The costs of not doing such are tremendous. A large and convoluted framework, one based on flawed ideas or implementation, or one which fails to properly safeguard Canadians is not just extremely expensive and risky for all Canadians, severely limiting to the credibility and reputation of the industry, but an existential risk to many exchanges.
The responsibility falls to all of us to provide our insight and make our opinions heard on this critical matter. Please take the time to give your thoughts.
submitted by azoundria2 to QuadrigaInitiative [link] [comments]

The Bitcoin Conspiracy (an enthusiast's perspective)

I keep coming across comments, especially in this sub, from people claiming that Bitcoin was created by the CIA or some government agency as part of the plan for the NWO and cashless society. I want to share my experience and try to clear up the confusion surrounding this topic.
I first got involved with Bitcoin in late 2016 when I heard about it and got some while at a libertarian festival. Back then it was still very popular among the agorist community and was being promoted as THE silver bullet that was going to disrupt the global fiat banking system.
Putting preconceptions aside, a new user might ask, "what's so special about Bitcoin? We already have digital currencies."
Well, you only need to read the first page of the whitepaper to discover what the original intent of Bitcoin was. It most definitely was not intended to be a tool for central banks to subjugate the world to a centralized global currency. Quite the opposite in fact. Read the full whitepaper here.
When I first learned about Bitcoin, it forced me to learn about economics, then the Federal Reserve, then one by one the dominoes fell and down the conspiracy rabbit hole I went. In 2017 (actually it started a few years earlier, but I wasn't paying attention back then) there was a very heated debate in the Bitcoin community regarding scaling.
I'll try to break it down simply:
In the very early days, when Bitcoin was just a project being worked on by a few very technical people, no one knew about it. All it took was a handful of people running the software on their laptops to mine new coins. Since there was not much computing power on the network, it meant there could easily be a spam attack where a malicious user could join the network and generate many gigabytes of spam transactions that would overload and crash the network. To prevent this, Satoshi implemented a limit of 1MB per block, to protect the network until there was enough computing power to be able to handle larger blocks.
This measure worked, and Bitcoin grew exponentially.
Satoshi vanished in 2010, after WikiLeaks attracted unwanted attention to the project by accepting Bitcoin donations. He left clear instructions for his successors that the 1MB block size limit was meant to be increased once the network could support high levels of user traffic. At the time, there still was not much use, so it wasn't until around 2014 that blocks started hitting the 1MB cap and all of a sudden users had to compete (by paying higher transaction fees) in order to get their transaction mined into the next block.
Up until then, sending a Bitcoin transaction would cost $0.0001 (hundredth of a penny) or less, no matter if you were sending $0.10 or $1,000,000. Now, since block space was limited, fees started to rise, as miners would only include the transactions with the highest fees. Over the next couple years, transaction fees went up dramatically, at times reaching as high as $100 to send a single transaction.
The solution was obvious - raise the block size limit.
But this led to a heated debate, and this is where the conspiracy became obvious to those who were paying attention. Since Bitcoin was decentralized and open source, anyone could contribute, but certain people controlled the commit access to the github repo, and it became apparent that those individuals had been compromised, as any and all mention of increasing the block size was met with fierce resistance.
There was a misinformation campaign to discredit anyone arguing for larger blocks. The argument was that larger blocks would mean users could not run the software on their low-power personal devices and laptops; that by increasing the block size it would lead to mining centralization. Well, if you read the whitepaper linked above, you'll see that Satoshi predicted this. He knew mining would eventually be left to "specialized server farms" while normal users could use what he termed Simplified Payment Verification (SPV) wallets.
But this point was consistently shot down in the community, and especially on /bitcoin. There was a MASSIVE censorship campaign in the bitcoin subreddit that continues to this day where anyone who questions the official narrative or even asks a basic technical question is immediately banned. /bitcoin today is nothing but a cesspit of price memes and misinformation. Go to /btc for the uncensored discussions (but beware of trolls).
In 2017 the debate was finally settled, sort of. Now known as "Bitcoin Core" (the name of the official Bitcoin software), the developers implemented a change known as SegWit (Segregated Witness) which fundamentally altered the way the software validates transactions. It was implemented as a "soft fork" rather than a "hard fork".
I'll explain the difference.
In a fork, the network comes to a consensus on new rules that all participants must follow. In a hard fork, the changes are non-backwards compatible, so all users must update their software or else be left behind on a dead network. Hard forks happen all the time in software development, but in the case of SegWit, the developers refused to make any non-backwards compatible changes for fear it might alienate users. Again, another unfounded fear. "We can't ever upgrade the technical capabilities of the network (such as the block size) because some people might not go along with it."
All kinds of mental gymnastics were performed to justify their refusal to increase the block size, and there was nothing anyone could do about it except fork as an independent project. The 1MB block limit is now essentially set in stone for BTC. So in August 2017, Bitcoin Cash (BCH) hard forked by increasing the block size limit to 8MB, along with some other changes.
Fast forward to December 2017 and Bitcoin was at its all time high of nearly $20,000. But fees were also astronomical and because of the 1MB block size limit, a huge backlog formed, and some people had to wait days or even weeks for their transaction to confirm. If anyone was trying to cash out into fiat and didn't want to pay a $100 transaction fee, by the time their transaction got confirmed the price had already crashed.
This event was largely responsible for the bear market of 2018. Everything that happened was predicted by those who knew what was going on.
A company called Blockstream had essentially wrestled control of Bitcoin from the original developers and shut them out or gained control over them, and started working on turning Bitcoin into a settlement layer for their product called Lightning Network.
LN is a complicated topic that I don't want to get into, but essentially it's a framework that recreates all the same problems inherent in the banking system that Bitcoin was meant to solve. Blockstream's goal is to profit from creating, and then "solving" those problems by charging users fees for all kinds of custodial services.
In my personal opinion, it's obvious that the original Bitcoin project has been hijacked and repurposed into a tool for the central banks. The propaganda is being pushed in some conspiracy circles that Bitcoin was created BY the central banks in order to discourage people from researching the true history. What is now commonly called "Bitcoin" is not the original project, but a Trojan horse.
The project that most closely follows the original design is Bitcoin Cash, and that is where almost all organic development is happening, and personally I feel that it's picking up steam lately as more people wake up to what's happening in the economy right now. Unfortunately most people are still unaware of how fundamentally broken BTC is now and so as new users run toward cryptocurrency to escape the dollar collapse, most will fall straight into the trap and be stuck with BTC that they won't be able to use without paying exorbitant fees and/or submitting to the very same tracking system they are trying to get away from.
This is a very deep rabbit hole but I think I've written enough for now. I hope this info helps people make sense of what's going on with Bitcoin. I know it's confusing enough even without so much deception taking place so hopefully this helps.
Read the Bitcoin FAQ over on /btc.
submitted by PM_ME_YOUR_ALTCOINS to conspiracy [link] [comments]

Conceal Network Anon Defi 450k marketcap - I think this deserves FULL attention.

Some of you will have heard of this project before. For me this is a long term hold and i think it is highly undervalued.
Sometimes OLDER is GOLDER.
The project is Conceal Network.
Anonymous DeFi & Private Communication
Name
Conceal Network
Ticker
CCX
Symbol

Market Cap - Circa 450k
Algorithm
PoW, Cryptonight Conceal
Difficulty
DDA & Zawy's LWMA 3
Privacy
Ring Signatures & One-Time Addresses
Block Time
120s
Transaction Fees
0.0001 CCX
Max Supply
200M CCX to be released over 100 years.
Circulating supply is 8m.
Deposits
Up to 4.16% interest rate per year
Investments
Up to 7.32% interest rate per year
Messenger
Encrypted Messages and Self-Destructive Messages
Premine
6% of the max supply locked over a 5 years interval
Block reward
Starting on 5 CCX and going up to 15 CCX (+0.25CCX/month). Currently 10.75 CCX.
https://github.com/ConcealNetwork
Buy at:
https://tradeogre.com/exchange/BTC-CCX
WHAT IS CONCEAL?
Conceal is a decentralized blockchain bank, with deposits and investments paying interest rates, without involvement of financial institutions, powered by 100% open source code.
Conceal enables untraceable and anonymous messaging, and a secure way to transfer funds. Using a distributed public ledger, the sender and receiver are kept anonymous, a key concern in a post Snowden world. Hackers cannot trace money or messages when the messages are sent across public networks.
Conceal Cryptocurrency (₡CCX) is based on the Cryptonote protocol and runs on a secure peer-to-peer network technology to operate with no central authority. You control the private keys to your funds.
Conceal is accessible by anyone in the world regardless of their geographic location or status. Our blockchain is resistant to any kind of analysis. All your CCX transactions and messages are anonymous.
Conceal avoids many concerns, e.g. technological, environment impact, reputational and security, of Bitcoin, and provides a glimpse of the future.
Conceal is open-source, community driven and truly decentralized.
No one owns Conceal, everyone can take part.
FEATURES Private Conceal uses ring signatures and one-time addresses for truly anonymous payments
Untraceable Conceal's transactions can't be linked between the sender and the recipient
Decentralized Conceal follows Satoshi Nakamoto's original vision of decentralized, trustless cryptocurrency, i.e. a secure digital cash operated by a network of users. Transactions are confirmed by distributed consensus, and then recorded on the blockchain immutably. Third parties do not need to be trusted to keep your money safe.
Fungible Conceal is truly fungible, thanks to built-in privacy features. Just like cash, all coins are equal, changeable. It is extremely unlikely that a coin will ever be blacklisted by any party due to its association in previous transactions.
Scalable Future scalability initiatives will include a modular sidechain.
Protected Proof Of Work PoW hash function is designed for egalitarian CPU & GPU mining and ASIC Resistance
Adaptive Limits Conceal intelligently adjusts its parameters based on the historical data
Encrypted Messages Secure your confidentiality with an encrypted P2P network, secure communications and encrypted self-destructive messages
Decentralized Banking Deposits get up to 4.2% interest rate per year and Investments up to 7.2% p.a.
They have a wiki that acts like an evolving whitepaper.
All of your questions should be answered here as it is updated frequently.
https://conceal.network/wiki/doku.php?id=about#conceal_emission
Very soon they will publish an anniversary article and reveal some big news. Could it relate to the below....
https://twitter.com/ConcealNetwork/status/1261723775801982976?s=19
"Deposits on Cloud & Mobile is almost here. You will be able to deposit $CCX on Cloud and Mobile soon and earn interest up to 6%!
Q3 2020 - Stay tuned."
Also please read this exclusive recent interview with the daily chain.
https://thedailychain.com/hashr8-privacy-coin-reviews-conceal/
submitted by therealfacemelter to CryptoMoonShots [link] [comments]

Same lies about Dash still floating around - Time for another crackdown

This article was caught by our spamfilter because it's hosted on a reward-for-article platform (similar to steemit). Nonetheless I will respond to it, as it recycles the same old lies about Dash many of us have grown used to and it serves as in illustration that these lies and accusations are still after 6 years regurgitated 1:1 by ignorant bystanders without a single critical thought behind them.
The article is a real mess as you will notice. The author didn't even bother to edit the question section into Dash from ZCash. Anyway, that's not the real issue. This is about the section "Dash Launch And Issuance" which I am about to respond to.
The Dash cryptocurrency has a rather controversial launch and issuance as it involved a 2-day ‘instamine’ or ‘premine’
There is a huge difference between a premine and a fastmine. Conflating the two shows the author is either ignorant and thus unqualified to talk about the subject matter or tries to mislead the reader. A premine means the public is excluded from mining, which provably never happened in Dash, thus the term is 100% inapplicable.
According to Dash’s founder, Evan Duffield, this premine was the result of a bug. However, there are many people who beg to differ.
Those who "beg to differ" are idiots plain and simple. Because we have already proven that the same thing happened 2.5 years earlier in Litecoin from which Dash originally forked off (and not from Bitcoin as the author initially claims at the beginning of the article).
To ‘resolve’ the situation, the majority of these instamined coins were sold for very low prices on exchanges. However, it is widely believed that most of these coins were simply scooped up by Evan Duffield and the Dash core team for incredibly low prices.
This is my favorite part, because it's probably the only original thought in the article, as I have never heard anyone make up something so incoherently dumb with regards to Dash's launch.
First they say, Evan mined "all the coins by himself" now suddenly he's buying coins for "incredibly low prices"?! So, which is it? Can't have it both ways. Or did he buy coins from himself?
Let's cut the crap. Is it too hard to simply admit the coins were sold on the free and open market to ANYONE willing to buy them?? Nothing was sold to "resolve" anything.
Anyone, not just Evan and the team, had the chance to buy cheap coins for under a Dollar, which was fair and square, hands down. Those who missed out crying foul today are really just trying too hard. Also Dash Core did not exist in 2014. Again the author shows his ignorance further disqualifying himself.
Duffield released Dash before its intended release date (which means the instamine that occurred can be classified as a premine).
This is a lie. It did not happen as anyone can see on the blockchain. The author is a liar.
Dash’s instamine happened because Dash was launched with a block reward of 500 coins per block before it was abruptly cut 2 days later after 2million coins were instamined.
Of course the fix would happen "abruptly" as soon as the necessary blockheight was reached, otherwise it would've gone on forever. It was a mess up and nobody denies this. The fact remains that the coins were sold for pennies as my analysis has shown. Here Evan talks about the launch himself. He clearly states that coins were spilt out too fast and he was under immense pressure to fix it asap.
Initially, Dash was only minable on Linux, which could have been intended so that fewer people would mine Dash and Duffield and Dash’s core team could dominate mining (over 90% of all computers use the Windows operating system).
Conjecture without a shred of evidence assuming ill-intent over good faith. Back in 2014 mining was still a niche hobby by nerds where Linux was the dominating operating system. Evan is a nerd who was using Linux at the time. He didn't own a Windows machine. If he did, why would he offer a reward to someone compiling a Windows binary? If he was the evil fastminer everyone accuses him of, it would be in his best interest to delay Windows mining as much as possible. The accusation holds no water.
Evan Duffield was able to temporarily mine Dash by himself for a while when the public miner wasn't working.
Lie. Lie. Lie. This never happened and the author is still a liar. I know what this alludes to and I have thoroughly debunked it as the nonsense it is.
Dash was initially meant to have a max supply of 80 million DASH, but Evan Duffield held an obscure poll where the majority of the voters voted to reduce the Dash max coin supply from 80million to 20million (which instantly made the instamined DASH worth more).
First of all the value of all coins goes up with a lower supply, not just those that were first mined (duh!). This is intellectual dishonesty, but hardly surprising considering the previous lies of the author. Second, this poll is near worthless as a historic summary as it ignores what went down in the community before: Watch this analysis by Tao of Satoshi to learn that there was major community pressure on Evan's back with endless debates on how to change the reward structure and emission rate of Dash until it was finally settled after a full 7 adjustments in both directions. The narrative that there was one evil singular supply decrease to maliciously enrich Evan is completely stupid.
All in all, Dash’s launch is shrouded in controversy, and it's clear that Evan Duffield and Dash developers benefited tremendously from how everything went down.
The only thing shrouded in mystery is why anyone would believe these false conclusions, accusations and flat out lies when the facts are readily accessible. Of course the founder of any cryptocurrency benefits the most. It's how it's supposed to be. Satoshi "benefitted tremendously" as well from launching Bitcoin. The fact that Evan was able to quit his day job and work for Dash full time was the best thing that could have ever happened to this project. Of course our detractors don't like that, because they don't want to see Dash succeed. But we did and we're still here after 6 years of ceaseless innovation. Repeating ancient lies cannot undo that.
submitted by Basilpop to dashpay [link] [comments]

Why has Bitcoin fallen so short of its promises?

I was looking at web archives, and Bitcoin Talk forums, and when I looked at the discussion on these forums, apparently Satoshi Nakamoto claimed that Bitcoin is actually very much capable of surpassing VISA's transactions per second cap, with hardware back in 2010. Not to mention, in the old wiki, it stated that Bitcoin very easily has the potential to scale to 8,000+ transactions per second. I was just wondering why no cryptocurrency (and even though BCH is far better than BTC) has been able to reach these goals, despite our significant improvements in technology.
submitted by 1MightBeAPenguin to btc [link] [comments]

Bitcoin (BTC)A Peer-to-Peer Electronic Cash System.

Bitcoin (BTC)A Peer-to-Peer Electronic Cash System.
  • Bitcoin (BTC) is a peer-to-peer cryptocurrency that aims to function as a means of exchange that is independent of any central authority. BTC can be transferred electronically in a secure, verifiable, and immutable way.
  • Launched in 2009, BTC is the first virtual currency to solve the double-spending issue by timestamping transactions before broadcasting them to all of the nodes in the Bitcoin network. The Bitcoin Protocol offered a solution to the Byzantine Generals’ Problem with a blockchain network structure, a notion first created by Stuart Haber and W. Scott Stornetta in 1991.
  • Bitcoin’s whitepaper was published pseudonymously in 2008 by an individual, or a group, with the pseudonym “Satoshi Nakamoto”, whose underlying identity has still not been verified.
  • The Bitcoin protocol uses an SHA-256d-based Proof-of-Work (PoW) algorithm to reach network consensus. Its network has a target block time of 10 minutes and a maximum supply of 21 million tokens, with a decaying token emission rate. To prevent fluctuation of the block time, the network’s block difficulty is re-adjusted through an algorithm based on the past 2016 block times.
  • With a block size limit capped at 1 megabyte, the Bitcoin Protocol has supported both the Lightning Network, a second-layer infrastructure for payment channels, and Segregated Witness, a soft-fork to increase the number of transactions on a block, as solutions to network scalability.

https://preview.redd.it/s2gmpmeze3151.png?width=256&format=png&auto=webp&s=9759910dd3c4a15b83f55b827d1899fb2fdd3de1

1. What is Bitcoin (BTC)?

  • Bitcoin is a peer-to-peer cryptocurrency that aims to function as a means of exchange and is independent of any central authority. Bitcoins are transferred electronically in a secure, verifiable, and immutable way.
  • Network validators, whom are often referred to as miners, participate in the SHA-256d-based Proof-of-Work consensus mechanism to determine the next global state of the blockchain.
  • The Bitcoin protocol has a target block time of 10 minutes, and a maximum supply of 21 million tokens. The only way new bitcoins can be produced is when a block producer generates a new valid block.
  • The protocol has a token emission rate that halves every 210,000 blocks, or approximately every 4 years.
  • Unlike public blockchain infrastructures supporting the development of decentralized applications (Ethereum), the Bitcoin protocol is primarily used only for payments, and has only very limited support for smart contract-like functionalities (Bitcoin “Script” is mostly used to create certain conditions before bitcoins are used to be spent).

2. Bitcoin’s core features

For a more beginner’s introduction to Bitcoin, please visit Binance Academy’s guide to Bitcoin.

Unspent Transaction Output (UTXO) model

A 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.
https://preview.redd.it/t1j6anf8f3151.png?width=1601&format=png&auto=webp&s=33bd141d8f2136a6f32739c8cdc7aae2e04cbc47

Nakamoto consensus

In 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.

The blockchain

Block production

The 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.

https://preview.redd.it/m6texxicf3151.png?width=1591&format=png&auto=webp&s=f4253304912ed8370948b9c524e08fef28f1c78d

Block time and mining difficulty

Block 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.
https://preview.redd.it/depya70mf3151.png?width=1601&format=png&auto=webp&s=a6499aa2131fbf347f8ffd812930b2f7d66be48e
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:
  1. Alice sends Bob 1 BTC, and Bob sends Merchant Carol this 1 BTC for some goods.
  2. Bob sends Carols this 1 BTC, while the transaction from Alice to Bob is not yet validated. Carol sees this incoming transaction of 1 BTC to him, and immediately ships goods to B.
  3. At the moment, the transaction from Alice to Bob is still not confirmed by the network, and Bob can change the witness signature, therefore changing this transaction ID from 12345 to 67890.
  4. Now Carol will not receive his 1 BTC, as the network looks for transaction 12345 to ensure that Bob’s wallet balance is valid.
  5. As this particular transaction ID changed from 12345 to 67890, the transaction from Bob to Carol will fail, and Bob will get his goods while still holding his BTC.
With the Segregated Witness upgrade, such instances can not happen again. This is because the witness signatures are moved outside of the transaction block into an extended block, and altering the witness signature won’t affect the transaction ID.
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 Network

Lightning 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.
https://preview.redd.it/cy56icarf3151.png?width=1601&format=png&auto=webp&s=b239a63c6a87ec6cc1b18ce2cbd0355f8831c3a8
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 proposal

Elliptic Curve Digital Signature Algorithm (“ECDSA”) signatures are used to sign transactions on the Bitcoin blockchain.
https://preview.redd.it/hjeqe4l7g3151.png?width=1601&format=png&auto=webp&s=8014fb08fe62ac4d91645499bc0c7e1c04c5d7c4
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.
https://preview.redd.it/axg3wayag3151.png?width=1601&format=png&auto=webp&s=93d958fa6b0e623caa82ca71fe457b4daa88c71e
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 distribution

The 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.
submitted by D-platform to u/D-platform [link] [comments]

Public CodeValley/Emergent Consensus questioning and investigation Thread. Ask your hard questions and dispel your doubts here.

What is going on here?
I am asking some hard questions for the CodeValley Company, which recently proposed a new revolutionary software development paradigm called Emergent Coding at the latest big Bitcoin Cash conference in Australia.
I am asking these questions because, as I (and ~150 people who agreed with me) noticed, there are stunning similarities between CodeValley and the companies who have tried and succeeded in crippling Peer-To-Peer Electronic Cash: nChain and Blockstream.
According to me, as it looks now, similarities between these 3 companies (nChain, Blockstream, CodeValley) are the following:
}- Sources of funding are extremely unclear or openly hostile to Bitcoin
}- At first and even second glance, there is no product, no way to make money
}- Whitepaper & Documentation is missing, hollow or total abstract bullshit, company has no logical sense of existence
}- Detailed specifications or proofs of operation are not available
}- Main products are closed-source patented blobs (BSV, Liquid, Emergent Coding)
}- They have huge influences in the industry or try to establish themselves in such position to have the infuences
I am here (and you are here, I assume) because we want to find out the truth, whatever the truth is. The point of this topic is to ask the hardest possible questions in order to estimate the probability of CodeValley company being legit.
But this is also a chance for CodeValley to clear their name by providing sufficient information that proves that (after 4 years of having working company and 10+ years of having patents [Archived]) they actually have a working product and are a legit company, and not an infiltrator designed and paid by banks/TPTB in order to cripple and destroy Bitcoin Cash. Also if they truly are what they claim and they truly have such a revolutionary technology, this is a great opportunity for promotion. To show the world that the tech actually works.
I will ask my questions and you can ask your questions as well. Don't make them easy. Don't have mercy (but these things work better when you are polite).
Let's begin the trial by fire!
Calling nlovisa
My Questions/Tasks for CodeValley:
[Of course you actually don't have to answer any of them or you can give us bullshit answers again, but in such case the community may conclude that you actually are next nChain/Blockstream and an enemy infiltrator, reject you and shoot down all your efforts. So the choice is yours]
@@@@ 1. Please upload your actual businessplan which you presented to the people in power who gave you funding(VCs? Government?) to create $50 Million BCH tech park. A businessplan which is supposed to explain spending of $50 million AUD should have at least 7 pages (but more probably 20+). Some names and unimportant details (but NOT money/financial numbers) can be redacted.
-- You have 6 hours to complete this task --
@@@@ 2. Please list your current VCs and >%5 shareholders, with CEO names and HQ locations of each of them.
-- You have 4 hours to complete this task --
@@@@ 3. Few days ago you promised to upload freely-accessible documentation to https://codevalley.com/docs subpage which would describe emergent coding in greater details.
@ - What happened to that promise?
@@@@ 4. After I accused that your company is bullshit and your product is hollow, you immediately started to praise me and offered me a trip to Australia [Archived].
@ - So, do you always praise and offer a paid trip across the world to Australia to all people on the Internet who heavily criticize you? Is this a common practice in your company?
@@@@ 5. A travel from Poland to Australia and back would cost something under $2000 AUD, counting buses, with hotels that would make something close to $2500 AUD even for few days. Based on this, I estimate your "invite random people from the internet to Australia in order to show them the product" budget has to consist of at least $50.000 AUD yearly (but $100.000 - $200.000 is more probable of course).
@ A) In your financial books, what exactly is called the Excel position of your budget expenses under which would your secretary put my trip's expenses?
@ B) How do you maintain such a large budget for such frivolous spending and how do you explain it to your shareholders/VCs?
@@@@ 6. Few days ago you answered somebody a question: "The trust model is also different. The bulk of the testing happens before the project is designed not after. Emergent Coding produces a binary with very high integrity and arguably far more testing is done in emergent coding than in incumbent methods you are used to.".
@ A) Who EXACTLY does the testing? People? Software? AI? Non-bullshit answer, please.
@ B) Why exactly is there "more testing" in Emergent Coding than in normal software creation paradigm? Why is emergent coding different? Do the developers who work in this paradigm are somehow special? Are the programming languages magical?
@ C) What are the specific software tools used for this "testing"? "Agents" is a non-answer, so don't even try.
@@@@ 7. Please provide a simple demo binary of a simple program created completely using your "Emergent Coding" and also provide all the binary sub-component files that make up the final binary.
Requirements: There has to be a minimum of 3 sub - binaries making up the final big binary for this to be valid. 2 or less does not count. None of the binaries can be obfuscated, they have to be clean X86/X86_64 machine code binaries.
Notes: It should be incredibily simple, quick and easy task for you, since designing such a complex and apparently breakthough system must have required thousands, tens of thousands if not hundereds of thousands tests. All of these tests produced working binaries - after all you wouldn't claim you have a working marvellous revolutionary product without extensive testing, right?
-- You have 18 hours for this task --
Of course, If you are saying the truth and have truly developed this revolutionary "emergent coding" binary-on-the-fly-merging technology, this should normally take you under 18 minutes to just find the test samples and upload them.
@@@@ 8. Please construct a simple (binary or source) single-use-compiler demo that will combine 3 or more sub-binaries into final working product. Please upload the sub-binaries and the "single-use compiler" to publicly available site so people in our community can verify that your product is actually working.
The single-use-compiler binary can be obfuscated with proper tool in order to hide your precious intellectual property. The 3 sample sub-binaries cannot be obfuscated. They have to be pure, clean, binary X86/X86_64 machine code. Everything has to be working and verifable of course.
-- You have 72 hours to complete this task --
I understand all your technologies are patented with patents that basically predate Bitcoin and you are giving us obfuscated binaries, so you don't have to worry about anybody stealing your company's intellectual property, right?
@@@@ 9. You mentioned the only application I need to create programs using Emergent Coding is the pilot app.
@ - What programming language(s) is the pilot app written in?
@@@@ 10. When you developed the Emerging Coding, before it started existing, you couldn't have used emergent coding to create the first (test & development) applications because it is a chicken and egg problem.
@ - What programming language did you use to create first client/serveapi/daemon/tool used to merge multiple binaries into one in Emergent Coding?
@@@@ 11. Please list all of your current programmers and programming language each of them is using next to their name. Also provide LinkedIn profiles if applicable.
-- You have 18 hours to complete this task --
@@@@ 12. Please also list all Development Environments (IDEs) used by your current programmers next to their name.
-- You have 18 hours to complete this task --
@@@@ 13. Please list all compilers used by your current programmers next to their name.
-- You have 18 hours to complete this task --
@@@@ 14. So if I understand correctly CodeValley will be the company who runs $50 million BCH tech park and the tech will house multiple Bitcoin Cash-related startup and companies. Let's say I have a BCH startup and I would like to rent a loft/spot in your "tech park".
A) Please provide a PDF of sample basic contract you have (hopefully) prepared for such startups.
-- You have 4 hours to complete this task --
B) How much does the rent cost per a room (or m2/sqft) for a month and for a year?
@@@@ 15. Please submit the list of compilers that produce X86/X86_64/ARM binaries compatibile with Emergent Coding "mash-it-together" "binary compiler".
-- You have 4 hours to complete this task --
@@@@ 16. Is it possible for Emergent Coding to merge multiple non-binary applications (like Python or PHP programs) together? Or is it just binaries?
Who are you?
I am a freedom thinker and individual independent from all infuences who just does what he finds appropriate at the moment. Disclaimer to preempt questions:
}- I do not work for anybody
}- I do not have any hidden agenda
}- I am only doing what I think is right
}- I am a born revolutionist, this is why I am in Bitcoin
Why are you doing this?
}- Because I believe in truth above all. Truth will save us.
}- Because I believe in Satoshi's peer-to-peer cash for the world vision and I will not stray from this path.
}- Because most people are apparently missing psychological immune system which is why attempts like Blockstream, nChain appear and are repetedly [at least partially] successful. I have an anti-bullshit immune system that works great against this type of attacks. I was actually one of the first to be banned in /Bitcoin sub for pointing out their lies with manipulations and to spot Craig Wright's attempt to infiltrate and bend /btc sub to his will..
}- Because I was fooled twice by entities similar to CodeValley before (namingly nChain and Blockstream) and I will not be fooled again. Bitcoin Cash will not be co-opted easily as long as I am here.
}- Because if Bitcoin Cash community is an organism, then I became a B lymphocyte cell. I produce antibodies. I show you how to defend yourself from bullshit, lies and manipulation. This is my basic function.
}- Because I am here to kill the bank
submitted by ShadowOfHarbringer to btc [link] [comments]

For devs and advanced users that are still in the dark: Read this to get redpilled about why Bitcoin (SV) is the real Bitcoin

This post by cryptorebel is a great intro for newbies. Here is a continuation for a technical audience. I'll be making edits for readability and maybe even add more content.
The short explanation of why BSV is the real Bitcoin is that it implements the original L1 scripting language, and removes hacks like p2sh. It also removes the block size limit, and yes that leads to a small number of huge nodes. It might not be the system you wanted. Nodes are miners.
The key thing to understand about the UTXO architecture is that it is maximally "sharded" by default. Logically dependent transactions may require linear span to construct, but they can be validated in sublinear span (actually polylogarithmic expected span). Constructing dependent transactions happens out-of-band in any case.
The fact that transactions in a block are merkelized is an obvious sign that Bitcoin was designed for big blocks. But merkle trees are only half the story. UTXOs are essentially hash-addressed stateful continuation snapshots which can also be "merged" (validated) in a tree.
I won't even bother talking about how broken Lightning Network is. Of all the L2 scaling solutions that could have been used with small block sizes, it's almost unbelievable how many bad choices they've made. We should be kind to them and assume it was deliberate sabotage rather than insulting their intelligence.
Segwit is also outside the scope of this post.
However I will briefly hate on p2sh. Imagine seeing a stunted L1 script language, and deciding that the best way to implement multisigs was a soft-fork patch in the form of p2sh. If the intent was truly backwards-compatability with old clients, then by that logic all segwit and p2sh addresses are supposed to only be protected by transient rules outside of the protocol. Explain that to your custody clients.
As far as Bitcoin Cash goes, I was in the camp of "there's still time to save BCH" until not too long ago. Unfortunately the galaxy brains behind BCH have doubled down on their mistakes. Again, it is kinder to assume deliberate sabotage. (As an aside, the fact that they didn't embrace the name "bcash" when it was used to attack them shows how unprepared they are when the real psyops start to hit. Or, again, that the saboteurs controlled the entire back-and-forth.)
The one useful thing that came out of BCH is some progress on L1 apps based on covenants, but the issue is that they are not taking care to ensure every change maintains the asymptotic validation complexity of bitcoin's UTXO.
Besides that, The BCH devs missed something big. So did I.
It's possible to load the entire transaction onto the stack without adding any new opcodes. Read this post for a quick intro on how transaction meta-evaluation leads to stateful smart contract capabilities. Note that it was written before I understood how it was possible in Bitcoin, but the concept is the same. I've switching to developing a language that abstracts this behavior and compiles to bitcoin's L1. (Please don't "told you so" at me if you just blindly trusted nChain but still can't explain how it's done.)
It is true that this does not allow exactly the same class of L1 applications as Ethereum. It only allows those than can be made parallel, those that can delegate synchronization to "userspace". It forces you to be scalable, to process bottlenecks out-of-band at a per-application level.
Now, some of the more diehard supporters might say that Satoshi knew this was possible and meant for it to be this way, but honestly I don't believe that. nChain says they discovered the technique 'several years ago'. OP_PUSH_TX would have been a very simple opcode to include, and it does not change any aspect of validation in any way. The entire transaction is already in the L1 evaluation context for the purpose of checksig, it truly changes nothing.
But here's the thing: it doesn't matter if this was a happy accident. What matters is that it works. It is far more important to keep the continuity of the original protocol spec than to keep making optimizations at the protocol level. In a concatenative language like bitcoin script, optimized clients can recognize "checksig trick phrases" regardless of their location in the script, and treat them like a simple opcode. Script size is not a constraint when you allow the protocol to scale as designed. Think of it as precompiles in EVM.
Now let's address Ethereum. V. Buterin recently wrote a great piece about the concept of credible neutrality. The only way for a blockchain system to achieve credible neutrality and long-term decentralization of power is to lock down the protocol rules. The thing that caused Ethereum to succeed was the yellow paper. Ethereum has outperformed every other smart contract platform because the EVM has clear semantics with many implementations, so people can invest time and resources into applications built on it. The EVM is apolitical, the EVM spec (fixed at any particular version) is truly decentralized. Team Ethereum can plausibly maintain credibility and neutrality as long as they make progress towards the "Serenity" vision they outlined years ago. Unfortunately they have already placed themselves in a precarious position by picking and choosing which catastrophes they intervene on at the protocol level.
But those are social and political issues. The major technical issue facing the EVM is that it is inherently sequential. It does not have the key property that transactions that occur "later" in the block can be validated before the transactions they depend on are validated. Sharding will hit a wall faster than you can say "O(n/64) is O(n)". Ethereum will get a lot of mileage out of L2, but the fundamental overhead of synchronization in L1 will never go away. The best case scaling scenario for ETH is an L2 system with sublinear validation properties like UTXO. If the economic activity on that L2 system grows larger than that of the L1 chain, the system loses key security properties. Ethereum is sequential by default with parallelism enabled by L2, while Bitcoin is parallel by default with synchronization forced into L2.
Finally, what about CSW? I expect soon we will see a lot of people shouting, "it doesn't matter who Satoshi is!", and they're right. The blockchain doesn't care if CSW is Satoshi or not. It really seems like many people's mental model is "Bitcoin (BSV) scales and has smart contracts if CSW==Satoshi". Sorry, but UTXO scales either way. The checksig trick works either way.
Coin Woke.
submitted by -mr-word- to bitcoincashSV [link] [comments]

r/Bitcoin recap - July 2019

Hi Bitcoiners!
I’m back with the 31st monthly Bitcoin news recap.
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) overview of what happened in bitcoin over the past month.
You can see recaps of the previous months on Bitcoinsnippets.com
A recap of Bitcoin in July 2019
Adoption
Development
Security
Mining
Business
Education
Regulation & Politics
Archeology (Financial Incumbents)
Price & Trading
Fun & Other
submitted by SamWouters to Bitcoin [link] [comments]

The Decade in Blockchain — 2010 to 2020 in Review

2010

February — The first ever cryptocurrency exchange, Bitcoin Market, is established. The first trade takes place a month later.
April — The first public bitcoin trade takes place: 1000BTC traded for $30 at an exchange rate of 0.03USD/1BTC
May — The first real-world bitcoin transaction is undertaken by Laszlo Hanyecz, who paid 10000BTC for two Papa John’s pizzas (Approximately $25 USD)
June — Bitcoin developer Gavin Andreson creates a faucet offering 5 free BTC to the public
July — First notable usage of the word “blockchain” appears on BitcoinTalk forum. Prior to this, it was referred to as ‘Proof-of-Work chain’
July — Bitcoin exchange named Magic The Gathering Online eXchange—also known as Mt. Gox—established
August —Bitcoin protocol bug leads to emergency hard fork
December — Satoshi Nakamoto ceases communication with the world

2011

January — One-quarter of the eventual total of 21M bitcoins have been generated
February — Bitcoin reaches parity for the first time with USD
April — Bitcoin reaches parity with EUR and GBP
June — WikiLeaks begins accepting Bitcoin donations
June — Mt. Gox hacked, resulting in suspension of trading and a precipitous price drop for Bitcoin
August — First Bitcoin Improvement Proposal: BIP Purpose and Guidelines
October — Litecoin released
December — Bitcoin featured as a major plot element in an episode of ‘The Good Wife’ as 9.45 million viewers watch.

2012

May — Bitcoin Magazine, founded by Mihai Alisie and Vitalik Buterin, publishes first issue
July — Government of Estonia begins incorporating blockchain into digital ID efforts
September — Bitcoin Foundation created
October — BitPay reports having over 1,000 merchants accepting bitcoin under its payment processing service
November — First Bitcoin halving to 25 BTC per block

2013

February — Reddit begins accepting bitcoins for Gold memberships
March — Cyprus government bailout levies bank accounts with over $100k. Flight to Bitcoin results in major price spike.
May —Total Bitcoin value surpasses 1 billion USD with 11M Bitcoin in circulation
May — The first cryptocurrency market rally and crash takes place. Prices rise from $13 to $220, and then drop to $70
June — First major cryptocurrency theft. 25,000 BTC is stolen from Bitcoin forum founder
July — Mastercoin becomes the first project to conduct an ICO
August — U.S. Federal Court issues opinion that Bitcoin is a currency or form of money
October — The FBI shuts down dark web marketplace Silk Road, confiscating approximately 26,000 bitcoins
November — Vitalik Buterin releases the Ethereum White Paper: “A Next-Generation Smart Contract and Decentralized Application Platform
December — The first commit to the Ethereum codebase takes place

2014

January — Vitalik Buterin announces Ethereum at the North American Bitcoin Conference in Miami
February — HMRC in the UK classifies Bitcoin as private money
March — Newsweek claims Dorian Nakamoto is Bitcoin creator. He is not
April — Gavin Wood releases the Ethereum Yellow Paper: “Ethereum: A Secure Decentralised Generalised Transaction Ledger
June — Ethereum Foundation established in Zug, Switzerland
June — US Marshals Service auctions off 30,000 Bitcoin confiscated from Silk Road. All are purchased by venture capitalist Tim Draper
July — Ethereum token launch raises 31,591 BTC ($18,439,086) over 42 days
September — TeraExchange launches first U.S. Commodity Futures Trading Commission approved Bitcoin over-the-counter swap
October — ConsenSys is founded by Joe Lubin
December — By year’s end, Paypal, Zynga, u/, Expedia, Newegg, Dell, Dish Network, and Microsoft are all accepting Bitcoin for payments

2015

January — Coinbase opens up the first U.S-based cryptocurrency exchange
February — Stripe initiates bitcoin payment integration for merchants
April — NASDAQ initiates blockchain trial
June — NYDFS releases final version of its BitLicense virtual currency regulations
July — Ethereum’s first live mainnet release—Frontier—launched.
August — Augur, the first token launch on the Ethereum network takes place
September — R3 consortium formed with nine financial institutions, increases to over 40 members within six months
October — Gemini exchange launches, founded by Tyler and Cameron Winklevoss
November — Announcement of first zero knowledge proof, ZK-Snarks
December — Linux Foundation establishes Hyperledger project

2016

January — Zcash announced
February — HyperLedger project announced by Linux Foundation with thirty founding members
March — Second Ethereum mainnet release, Homestead, is rolled out.
April — The DAO (decentralized autonomous organization) launches a 28-day crowdsale. After one month, it raises an Ether value of more than US$150M
May — Chinese Financial Blockchain Shenzhen Consortium launches with 31 members
June — The DAO is attacked with 3.6M of the 11.5M Ether in The DAO redirected to the attacker’s Ethereum account
July — The DAO attack results in a hard fork of the Ethereum Blockchain to recover funds. A minority group rejecting the hard fork continues to use the original blockchain renamed Ethereum Classic
July — Second Bitcoin halving to 12.5BTC per block mined
November — CME Launches Bitcoin Price Index

2017

January — Bitcoin price breaks US$1,000 for the first time in three years
February — Enterprise Ethereum Alliance formed with 30 founding members, over 150 members six months later
March — Multiple applications for Bitcoin ETFs rejected by the SEC
April — Bitcoin is officially recognized as currency by Japan
June — EOS begins its year-long ICO, eventually raising $4 billion
July — Parity hack exposes weaknesses in multisig wallets
August — Bitcoin Cash forks from the Bitcoin Network
October — Ethereum releases Byzantium soft fork network upgrade, part one of Metropolis
September — China bans ICOs
October — Bitcoin price surpasses $5,000 USD for the first time
November — Bitcoin price surpasses $10,000 USD for the first time
December — Ethereum Dapp Cryptokitties goes viral, pushing the Ethereum network to its limits

2018


January — Ethereum price peaks near $1400 USD
March — Google bans all ads pertaining to cryptocurrency
March — Twitter bans all ads pertaining to cryptocurrency
April — 2018 outpaces 2017 with $6.3 billion raised in token launches in the first four months of the year
April — EU government commits $300 million to developing blockchain projects
June — The U.S. Securities and Exchange Commission states that Ether is not a security.
July — Over 100,000 ERC20 tokens created
August — New York Stock Exchange owner announces Bakkt, a federally regulated digital asset exchange
October — Bitcoin’s 10th birthday
November — VC investment in blockchain tech surpasses $1 billion
December — 90% of banks in the US and Europe report exploration of blockchain tech

2019

January — Coinstar machines begin selling cryptocurrency at grocery stores across the US
February — Ethereum’s Constantinople hard fork is released, part two of Metropolis
April — Bitcoin surpasses 400 million total transactions
June — Facebook announces Libra
July — United States senate holds hearings titled ‘Examining Regulatory Frameworks for Digital Currencies and Blockchain”
August — Ethereum developer dominance reaches 4x that of any other blockchain
October — Over 80 million distinct Ethereum addresses have been created
September — Santander bank settles both sides of a $20 million bond on Ethereum
November — Over 3000 Dapps created. Of them, 2700 are built on Ethereum
submitted by blockstasy to CryptoTechnology [link] [comments]

/r/Bitcoin FAQ - Newcomers please read

Welcome to the /Bitcoin Sticky FAQ

You've probably been hearing a lot about Bitcoin recently and are wondering what's the big deal? Most of your questions should be answered by the resources below but if you have additional questions feel free to ask them in the comments.
The following videos are a good starting point for understanding how bitcoin works and a little about its long term potential:
For some more great introductory videos check out Andreas Antonopoulos's YouTube playlists, he is probably the best bitcoin educator out there today. Also have to give mention to James D'Angelo's Bitcoin 101 Blackboard series. Lots of additional video resources can be found at the videos wiki page or /BitcoinTV.
Key properties of bitcoin
Some excellent writing on Bitcoin's value proposition and future can be found here. Bitcoin statistics can be found here, here and here. Developer resources can be found here and here. Peer-reviewed research papers can be found here. The number of times Bitcoin was declared dead by the media can be found here. Scaling resources here, and of course the whitepaper that started it all.

Where can I buy bitcoins?

BuyBitcoinWorldwide.com and Howtobuybitcoin.io are helpful sites for beginners. You can buy or sell any amount of bitcoin and there are several easy methods to purchase bitcoin with cash, credit card or bank transfer. Some of the more popular resources are below, also, check out the bitcoinity exchange resources for a larger list of options for purchases.
Bank Transfer Credit / Debit card Cash
Coinbase Coinbase LocalBitcoins
Gemini Bitstamp LibertyX
GDAX Bitit Mycelium LocalTrader
Bitstamp Cex.io BitQuick
Kraken CoinMama WallofCoins
Xapo BitcoinOTC
Cex.io
itBit
Bitit
Bitsquare
Here is a listing of local ATMs. If you would like your paycheck automatically converted to bitcoin use Cashila or Bitwage.
Note: Bitcoins are valued at whatever market price people are willing to pay for them in balancing act of supply vs demand. Unlike traditional markets, bitcoin markets operate 24 hours per day, 365 days per year. Preev is a useful site that that shows how much various denominations of bitcoin are worth in different currencies. Alternatively you can just Google "1 bitcoin in (your local currency)".

Securing your bitcoins

With bitcoin you can "Be your own bank" and personally secure your bitcoins OR you can use third party companies aka "Bitcoin banks" which will hold the bitcoins for you.
Android iOs Desktop
Mycelium BreadWallet Electrum
CoPay AirBitz Armory
Another interesting use case for physical storage/transfer is the Opendime. Opendime is a small USB stick that allows you to spend Bitcoin by physically passing it along so it's anonymous and tangible like cash.
Note: For increased security, use Two Factor Authentication (2FA) everywhere it is offered, including email!
2FA requires a second confirmation code to access your account, usually from a text message or app, making it much harder for thieves to gain access. Google Authenticator and Authy are the two most popular 2FA services, download links are below. Make sure you create backups of your 2FA codes.
Google Auth Authy
Android Android
iOS iOS

Where can I spend bitcoins?

A more comprehensive list can be found at the Trade FAQ but some more commons ones are below.
Store Product
Gyft Gift cards for hundreds of retailers including Amazon, Target, Walmart, Starbucks, Whole Foods, CVS, Lowes, Home Depot, iTunes, Best Buy, Sears, Kohls, eBay, GameStop, etc.
Steam, HumbleBundle, Games Planet, itch.io, g2g and kinguin For when you need to get your game on
Microsoft Xbox games, phone apps and software
Spendabit, The Bitcoin Shop, Overstock, DuoSearch, The Bitcoin Directory and BazaarBay Retail shopping with millions of results
ShakePay Generate one time use Visa cards in seconds
NewEgg and Dell For all your electronics needs
Cashila, Bitwa.la, Coinbills, Piixpay, Bitbill.eu, Bylls, Coins.ph, Bitrefill, Pey.de, LivingRoomofSatoshi, Hyphen.to, Coinsfer, GetPaidinBitcoin, Coins.co.th, More #1, #2 Bill payment
Foodler, Menufy, Takeaway, Thuisbezorgd NL, Pizza For Coins Takeout delivered to your door!
Expedia, Cheapair, Lot, Destinia, BTCTrip, Abitsky, SkyTours, Fluege the Travel category on Gyft and 9flats For when you need to get away
BoltVM, BitHost VPS service
Cryptostorm, Mullvad, and PIA VPN services
Namecheap, Porkbun For new domain name registration
Stampnik and GetUSPS Discounted USPS Priority, Express, First-Class mail postage
Reddit Gold Premium membership which can be gifted to others
Coinmap, 99Bitcoins and AirBitz are helpful to find local businesses accepting bitcoins. A good resource for UK residents is at wheretospendbitcoins.co.uk.
There are also lots of charities which accept bitcoin donations, such as Wikipedia, Red Cross, Amnesty International, United Way, ACLU and the EFF. You can find a longer list here.

Merchant Resources

There are several benefits to accepting bitcoin as a payment option if you are a merchant;
If you are interested in accepting bitcoin as a payment method, there are several options available;

Can I mine bitcoin?

Mining bitcoins can be a fun learning experience, but be aware that you will most likely operate at a loss. Newcomers are often advised to stay away from mining unless they are only interested in it as a hobby similar to folding at home. If you want to learn more about mining you can read more here. Still have mining questions? The crew at /BitcoinMining would be happy to help you out.
If you want to contribute to the bitcoin network by hosting the blockchain and propagating transactions you can run a full node using this setup guide. Bitseed is an easy option for getting set up. You can view the global node distribution here.

Earning bitcoins

Just like any other form of money, you can also earn bitcoins by being paid to do a job.
Site Description
WorkingForBitcoins, Bitwage, XBTfreelancer, Cryptogrind, Bitlancerr, Coinality, Bitgigs, /Jobs4Bitcoins, Rein Project Freelancing
OpenBazaar, Purse.io, Bitify, /Bitmarket, 21 Market Marketplaces
Watchmybit, Streamium.io, OTika.tv, XOtika.tv NSFW, /GirlsGoneBitcoin NSFW Video Streaming
Bitasker, BitforTip, WillPayCoin Tasks
Supload.com, SatoshiBox, JoyStream, File Army File/Image Sharing
CoinAd, A-ads, Coinzilla.io Advertising
You can also earn bitcoins by participating as a market maker on JoinMarket by allowing users to perform CoinJoin transactions with your bitcoins for a small fee (requires you to already have some bitcoins)

Bitcoin Projects

The following is a short list of ongoing projects that might be worth taking a look at if you are interested in current development in the bitcoin space.
Project Description
Lightning Network, Amiko Pay, and Strawpay Payment channels for network scaling
Blockstream and Drivechain Sidechains
21, Inc. Open source library for the machine payable web
ShapeShift.io Trade between bitcoins and altcoins easily
Open Transactions, Counterparty, Omni, Open Assets, Symbiont and Chain Financial asset platforms
Hivemind and Augur Prediction markets
Mirror Smart contracts
Mediachain Decentralized media library
Tierion and Factom Records & Titles on the blockchain
BitMarkets, DropZone, Beaver and Open Bazaar Decentralized markets
Samourai and Dark Wallet - abandoned Privacy-enhancing wallets
JoinMarket CoinJoin implementation (Increase privacy and/or Earn interest on bitcoin holdings)
Coinffeine and Bitsquare Decentralized bitcoin exchanges
Keybase and Bitrated Identity & Reputation management
Bitmesh and Telehash Mesh networking
JoyStream BitTorrent client with paid seeding
MORPHiS Decentralized, encrypted internet
Storj and Sia Decentralized file storage
Streamium and Faradam Pay in real time for on-demand services
Abra Global P2P money transmitter network
bitSIM PIN secure hardware token between SIM & Phone
Identifi Decentralized address book w/ ratings system
Coinometrics Institutional-level Bitcoin Data & Research
Blocktrail and BitGo Multisig bitcoin API
Bitcore Open source Bitcoin javascript library
Insight Open source blockchain API
Leet Kill your friends and take their money ;)

Bitcoin Units

One Bitcoin is quite large (hundreds of £/$/€) so people often deal in smaller units. The most common subunits are listed below:
Unit Symbol Value Info
millibitcoin mBTC 1,000 per bitcoin SI unit for milli i.e. millilitre (mL) or millimetre (mm)
microbitcoin μBTC 1,000,000 per bitcoin SI unit for micro i.e microlitre (μL) or micrometre (μm)
bit bit 1,000,000 per bitcoin Colloquial "slang" term for microbitcoin
satoshi sat 100,000,000 per bitcoin Smallest unit in bitcoin, named after the inventor
For example, assuming an arbitrary exchange rate of $500 for one Bitcoin, a $10 meal would equal:
For more information check out the Bitcoin units wiki.
Still have questions? Feel free to ask in the comments below or stick around for our weekly Mentor Monday thread. If you decide to post a question in /Bitcoin, please use the search bar to see if it has been answered before, and remember to follow the community rules outlined on the sidebar to receive a better response. The mods are busy helping manage our community so please do not message them unless you notice problems with the functionality of the subreddit. A complete list of bitcoin related subreddits can be found here
Note: This is a community created FAQ. If you notice anything missing from the FAQ or that requires clarification you can edit it here and it will be included in the next revision pending approval.
Welcome to the Bitcoin community and the new decentralized economy!
submitted by BinaryResult to Bitcoin [link] [comments]

The BCH blockchain is 165GB! How good can we compress it? I had a closer look

Someone posted their results for compressing the blockchain in the telegram group, this is what they were able to do:
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:

Output (≥72 bits)

There can be multiple of those. They have the following format:

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.

Total

So, in summary, we have:
Nice table:
No. of inputs No. of outputs Uncompressed size Compressed size Ratio
1 1 191 bytes (1528 bits) 128 bytes (1023 bits) 67.0%
1 2 226 bytes (1808 bits) 151 bytes (1202 bits) 66.5%
2 1 339 bytes (2712 bits) 233 bytes (1861 bits) 68.6%
2 2 374 bytes (2992 bits) 255 bytes (2040 bits) 68.2%
2 3 408 bytes (3264 bits) 278 bytes (2219 bits) 68.0%
3 2 520 bytes (4160 bits) 360 bytes (2878 bits) 69.2%
3 3 553 bytes (4424 bits) 383 bytes (3057 bits) 69.1%
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.
submitted by eyeofpython to btc [link] [comments]

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