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Clearing up some misconceptions (including my own) [WARNING: LONG, MATH]

I've been reviewing NAV's code for the past couple months in my spare time and have seen a few things pass for granted which I had assumed were edicts from the NAV team, but as it turns out, they were not. I'll just cover them in sections below. This is going to get long, and hopefully you like math. I'm sorry, in advance.

Coins do not gain weight with age

tldr; section title
This is the big one, and the reason I wanted to review NAV's code in the first place. I had been treating this unofficial medium article like it was the bible, and it mentions that coins are weighted with age and size. No other documentation I could find indicated any differently (honestly, there's not really other documentation, in the first place) and so, having not finished looking into the code, I presumed that was simply true.
It is not, however. I'm not even sure where this idea came from, besides that article, because no NAV team announcements I've seen have said this, but maybe I'm just not looking back far enough.

So how DOES it work?

tldr; values are hashed together and compared against a target. That target is adjusted based only on how many NAV are staking
For those who haven't looked into how NAV picks the next group of staking coins (like I hadn't), the way it works is that a bunch of publicly available values (such as the time of the block you want to make, the time and hash of the transaction that represents your coinstake, and a few others) are hashed twice through SHA256 to create a random number. The actual values input are less important, what is important for NAV's purposes is that they are available to everyone, reasonably unique, and can be verified by other nodes on the blockchain. The output is, mathematically speaking, reproducible, but also completely random.
This value is then checked against a target value that changes based on how fast the network is making blocks. If the network is making blocks around once every three seconds? The target value gets harder (smaller). If the network is making blocks around once every minute? The target value gets easier (larger). The target value just gets adjusted until the network is sitting comfortably at 30 second blocks. So far this is the same way Bitcoin keeps their block time consistent.
However, PoS currencies then usually make an adjustment to that target value to increase your chances to win. In NAV's case, they multiply the target value by the number of coins you are staking. This means that a group of 1000 coins is 1000 times more likely to stake than a group of 1 coin.
To use more accessible numbers, since the values NAV is using are huge, this would be like saying the base odds are that you have to roll a 2 or below on a 100-sided die to win the coinstake. For one roll, you have a 2% chance. For two rolls, you have a 3.95% chance, for three rolls you have a 5.88% chance, for ten you have a 18.29% chance. For n rolls, a 1 - (98^n)/(100^n) chance. To simplify this somewhat, and encourage larger groups, NAV simply says that if you have 10 coins, your chances are 10 * 2%, or 20%. It's a bit more, but it's close.
It's worth noting that, using this system, if you have 50 coins, you have a 100% chance to win every roll, whereas pure single-roll odds only give you a 63.58% chance. The reason this isn't really a problem is that, in this example, there would only be 50 coins in existence, and you probably don't even have access to half of them. Additionally, if you are winning too quickly, NAV will start handing you a 200 sided die, then a 400 sided die, until you are only winning one in 30 -- and this is assuming you're the only one playing. With a table of people, you will get a larger die until only one of you is winning one roll in 30.

Majority Attacks

tldr; if coins gained weight with age it might be an actual security concern. This way is not
The problem with Proof of Stake Age (PoSA) is that, if implemented poorly, it can create opportunities for very cheap attacks. You may have heard of a 51% attack (or majority attack) before. This is where any single entity in the Bitcoin network gains more than 50% of the hashing power. At 51% the chances of them mounting a successful network control attack are now greater than half, which presents a potential danger to the network.

In PoW

tldr; you need lots of fancy computers that you get to keep after
You need a lot of hashing power, which means a lot of computers, which means a lot of financial capital. Or, you need to combine with another organization or pool to combine your hashing power. This was actually a concern once in Bitcoin, but fortunately was resolved to no ill-effect, and ghash.io agreed to cut down their processing. In a PoW system, however, after you have executed your attack, you still have all of your computers, and can use them for something else. The financial capital you have invested is kept, and you never had to invest a single penny into the coin.

In PoS

tldr; you need lots of coins that you probably spent a lot of money on, which are probably worth very little after
In PoS currencies, a 51% attack is still possible, but in this case you would need to have more than half of the staking coins. As of a few days ago, the network weight was hovering around ~18-22 million NAV, so for NAV, you would need ~10-12 million coins to have the requisite 51% of coins. The base assumption for a PoS currency, however, is that, once you have that many coins, you're pretty invested in the network, and it is directly detrimental to you to attempt to attack it. When you execute your attack, you will likely greatly damage trust in the coin, and lose a large portion of your investment. At least, this is the theory.

In PoSA

tldr; you need a little bit of money and a lot of time
You just need to wait. The most simplistic form of PoSA is in the form: adjusted_target = coins * time * base_target. If left uncapped, the time adjustment can allow a single coin stake to outweigh the entire network. Even with a cap of three months (for a total of 7776000 age-weight), you could use a mere 797 individual 0.01 NAV stakes (7.97 NAV total) to outweigh the combined base weight of all 62 million NAV in existence. You want good actors to have the most weight on the network, but in a PoSA currency, good actors are constantly losing their weight when their time resets, whereas bad actors can get more weight for doing nothing.

In PoST

tldr; you need a little bit of money and to somehow create a bunch of coins with the same hashing window
There are some currencies, such as VeriCoin, which have attempted to address this in novel ways, using what they call Proof of Stake Time. They create an ideal window during which your coins gain weight, but after which they return to base levels. This should theoretically encourage people to keep a server running, so they can always catch that window when it happens, which is partially randomized (to prevent someone from simply making a bunch of 0.01 coinstakes at the same time and just waiting for the window). I'm not sure how battle-tested this is, and I can think of a few potential vectors for attack that might exist, depending on implementation, but it does present an interesting and promising approach to the problem of how to encourage everyone on the network to participate, instead of just large stake holders with good odds.

So how likely is it for me to actually get a stake with ___ NAV

tldr; at current network weights it's likely that 1000 NAV will stake around once a week, and 1 NAV will stake once every 17 years.
Since NAV is neither PoSA nor PoST (which I would stress isn't a bad thing, because pure PoS is comparatively simple and has known -- and addressed -- vectors of attack. It's also not necessarily a good thing; it's mostly just a thing), you're basically just as likely to stake today as you are tomorrow. Theoretically, every second should present a new opportunity to win a stake, but in practice this ends up not quite working out because there are other people on the network. Every time you accept a new block, you cut off all of the seconds before it forever. In practice, it's probably easiest to just look at the total weight of the network, and your weight, and extrapolate from there. We'll take for granted that NAV will have 30 second block times for this calculation. If you've got Python you can follow along:
>>> # 2 blocks/min * 60 min/hr * 24 hday * 365 days/year ... TOTAL_STAKES_IN_YEAR = 1051200 >>> # 60 sec/min * 60 min/hr * 24 hday * 365 day/yr ... SECONDS_IN_YEAR = 31536000 >>> # the number of coins you are staking ... stake = 1.0 >>> # The total number of coins on the network ... network_weight = 18701284.96584108 >>> my_stakes_per_year = (stake / network_weight) * TOTAL_STAKES_IN_YEAR 0.05621004128433283 >>> seconds_between_stakes = SECONDS_IN_YEAR / my_stakes_per_year 561038548.9752324 
For those keeping track, this means that a 1 NAV stake is expected to take approximately 17.79 years to see a return in the current network (and, even then, only if you happen to be online at exactly the right time and nobody else stakes it first). Coincidentally, this is where that "expected time to stake" number comes from, which I've seen people asking about. I didn't actually look that one up in the code, so I'm not sure how their exact equation differs from mine, but I arrived at the exact same numbers they did, so it's likely similar (and probably more concise, because I am both a verbose writer and programmer, if you hadn't noticed). A 1000 NAV stake, using what I am calling network math for ease of reference, is expected to take around 6.49 days. My suspicion is that the reason this is sometimes more sporadic is that going by the target alone, and testing every second, a 1000 NAV stake should be getting a hit around once every 8 hours. I generated a file of 31536000 hashes (one for each second in the year), using the rules NAV uses to create hashes, and came up with the following table.:
*Assumes a target of 0x1a183258. I forget which block I pulled this from, but it's still around there. This unpacks to a value of: 0x0000000000001832580000000000000000000000000000000000000000000000 Calc wins : Mathematical calculation for how many hashes you should win, given the target Hash wins : This was pulled from the file with a year's worth of random hashes. N-M Wins : The number of wins network math says you should get Hash time : The average time between wins in the randomized file for the given NAV amount N-M time : The amount of time network math says you should wait between wins NAV : Calc wins : Hash wins : N-M wins : Hash time : N-M time 1 : 1.05 : 1 : 0.05 : ~1 year : 17.79 years 5 : 5.29 : 7 : 0.28 : 41.66 days : 3.56 years 10 : 10.59 : 10 : 0.56 : 34.27 days : 1.78 years 50 : 52.95 : 44 : 2.81 : 7.49 days : 129.87 days 100 : 105.89 : 107 : 5.62 : 3.42 days : 64.94 days 200 : 211.79 : 212 : 11.24 : 41.24 hours : 32.47 days 500 : 529.48 : 532 : 28.11 : 16.39 hours : 12.99 days 1000 : 1058.97 : 1050 : 56.21 : 8.33 hours : 6.49 days 2000 : 2117.93 : 2109 : 112.42 : 4.15 hours : 3.25 days 5000 : 5294.83 : 5326 : 281.05 : 98.62 minutes : 1.30 days 1000000 : 1058966.42 : 1058455 : 56210.04 : 29.79 seconds : 9.35 minutes 
So obviously, a bit of disparity between the target-based times and the network calculated times. I would guess this has to do with other people on the network cutting you off from time values, and orphaned transactions where you did get the right value, but somebody else made a weightier one, but this is where my ability to really verify exactly what is happening starts dwindling. The disparity in N-M wins and Calc wins indicates that the target is currently too easy, and should adjust upwards, because right now coins on the network are 18.84 times weightier (calc wins column / n-m wins column) in hashing power than they should be based on the total network weight. But this is also where the whole "50 groups of 1 coin has a 63.58% chance to hit 2/100 whereas 1 group of 50 coins has a 100% chance to hit 100/100" thing comes into play.
Since the network is largely broken up into groups of, on average, 1500 coins, we're actually looking at ~12467.52 groups of 1500 coins vying to win any given block. Given the target, a group of 1500 coins should have a 0.0050369...% chance to win any given coinstake ((target * 150000000000) / maximum_hash_value). This means that the chance that at least one of the 12467.52 staking groups will match for a given second is 1 - (1 - 0.000050369...)^12467.52 = 0.4663, or 46.63%. This places the actual amount that coins are overweight a bit closer to 13.989 times. (network should have ~1/30 chance (3.33...%) to win any given second, 46.63 / 3.33...% = 13.989).
However, as mentioned, the software itself can get in the way of that, so this might just be due to a quirk of how the NAV software searches for matches, since it will abandon any seconds prior to the most recently accepted block. If you were cut off from 13 seconds in every 100, that would account for the weight disparity. In any case, I would probably trust the network math times over the pure math ones, if you're just trying to get a feel for how long you'll likely wait between stakes. What this really translates to is that, although a 1 NAV stake will probably have one second out of the year that will hash in it's favour, even running 24/7 you're likely to miss 17 of those before you actually have all the right conditions to win.
Interestingly, I did manage to find one 9.99 NAV stake that won after only 5 days; so it can happen. But it's all still random.

How does this affect my staking rewards?

tldr; it doesn't
Fortunately, NAV pays out the amount you should receive down to the second. Let's take this block at random. 1119.84133642 NAV coinstake, generated 3.82575342 NAV. The time of the previous transaction that created that coinstake was 1514741456 (see the "Raw Transaction" tab). The time of the current transaction is 1514741456. that's all we need to go on.
>>> SECONDS_IN_DAY = 86400 >>> DAYS_IN_YEAR = 365 >>> CENT = 1000000 # .01 NAV >>> COIN = 100000000 # 1.0 NAV >>> REWARD_PERCENT = 5 * CENT # will be 4 * CENT with community fund >>> # All NAV amounts in satoshi (navtoshi? natoshi?) ... stake = 111984133642 >>> # time of this stake ... stake_time = 1516896224 >>> # time of the transaction that made this stake >>> stake_prev_time = 1514741456 >>> # I'm not 100% positive why it converts to cent/seconds first, ... # but this is what the code does, so we need to as well if we ... # want to be accurate ... cent_seconds = (stake * (stake_time - stake_prev_time)) // CENT 241299827679 >>> # Now they undo the cent_seconds for some reason? I'm not sure. ... # This does, however, create a minimum coin stake for any given time. ... # 1 NAV, for instance, will not generate anything if it stakes until ... # it is exactly one day old (with a whopping 0.00013698 NAV). ... # The minimum NAV stake you can get a reward from if you get lucky ... # and stake at the end of two hours is 11 NAV. ... coin_day = ((cent_seconds * CENT) // COIN) // SECONDS_IN_DAY 27928 >>> stake_reward = (coin_day * REWARD_PERCENT) // DAYS_IN_YEAR 382575342 
note: // is a floor division. For example, 3 / 2 = 1.5, 3 // 2 = 1
And we come out the other end with exactly 3.82575342 NAV. Those are the only variables that affect your payout for staking. You then also get whatever the fees happen to be. There's not any magic to it, and so far as I can tell there's also not a limit. If you legitimately wait those 17 years for your 1 NAV to stake, your eventual payout will be on the order of 0.84 NAV. Anyways, that's pretty much all there is to your payout; it's very direct.

So is it worth it for me to stake?

tldr; personal preference
Honestly, this is entirely up to you. If you're in the "month or more" camp of coinstakers, it's probably not worth your while to be running 24/7 unless you're just really into securing the network (which, to be fair, I am all about that, so feel free). But with the blockchain at the small size it is right now, and if you're going to be using your computer anyways, it probably doesn't hurt to just run it in the background and see if you get lucky. Like pointed out, the actual amount you get is not affected by any of this. All that this means is that it is harder to predict exactly when you will get a stake. If you're concerned about financially supporting the staking, then NavTechServers has created this handy calculator to help out. From a mathematical standpoint, it's ironically much more likely for small coinstakers to get stakes if they are running 24/7, but from a financial standpoint, you're probably not getting enough to care to, so it's up to your preferences.

Cold Staking is not staking while offline

tldr; there is no magic that will allow blocks to be created without nodes on the network
I've also seen a bit of confusion over what cold staking is likely to bring, and want to ensure people aren't upset when it does get rolled out. Specifically the misconception that staking with offline coins is the same thing as staking while offline. It is physically impossible to generate a block without something connected to the network, and you only get staking rewards once you have generated a block, because the blockchain doesn't really have the tools to tell who is online and participating beyond "who made this block."
All that cold staking means is that the private keys to use your NAV to buy things or move their address are not on the server doing the staking. In general, this is accomplished via a smart contract and a secondary set of keys that is given permission to use your coins, but only for staking. If those keys are used for moving the a coin from one account to another, then the smart contract will flag it as an incorrect usage. This means that if someone hacks into your server, the only thing they could steal are the keys that permit them to stake your blocks. This is much easier to correct than someone stealing your private keys and moving your NAV to a separate address. Particl's overview of their cold staking system is a good read to get some baseline expectations.
Most implementations of cold staking do open up the possibility to sign your coins over to someone else to stake, which opens up the entirely new 51% attack vector of asking people to just GIVE you their network weight. But given that I have just recently explained to you all why one person owning a majority of the coin staking weight on the network is dangerous, I shouldn't have to tell you why this would be a bad idea, right?
RIGHT??

Summary

In any case, that's about it. Chances are the answer to the question "am I staking" is "yes", so long as the wallet tells you that it's staking. Unfortunately (but also fortunately), waiting longer only increases your chances insofar as you are trying more, but when you do eventually stake, you will be paid out based on how long you have waited, so there's not much lost.
I could go into much more depth about all this but this was about as concise as I could get it while still showing most of my work. I'd also be happy to address any other questions that arise from this, and obviously if somebody who knows better finds anything wrong with any of the details here let me know. If you wanted to get into this more in-depth, I've created a Python script which explains some of the technical aspects more thoroughly (including how to unpack the compact target number into the full value being checked in the code), and allows you to get hands-on with real block values. You can download it here. Happy hodling, everybody.
submitted by i_adore_you to NavCoin [link] [comments]

Why I just sold 50% of my bitcoins: GHash.IO

tl;dr: GHash.IO shows that the economic incentives behind Bitcoin are probably very flawed, it might take a disaster to get the consensus to fix it, and if that happens I want to make sure I can pay my rent and buy food while we're fixing it.
I made a promise to myself a while back that I'd sell 50% of my bitcoins if a pool hit 50%, and it's happened. I've known for awhile now that the incentives Bitcoin is based on are flawed for many reasons and seeing a 50% pool even with only a few of those reasons mattering is worrying to say the least.
Where do we go from here? We need to do three things:
1) Eliminate pools.
2) Provide a way for miners to solo-mine with low varience and frequent mining payouts even with only small amounts of hashing power.
3) Get rid of ASICs.
Unfortunately #3 is probably impossible - there is no known way to make a PoW algorithm where an ASIC implementation isn't significantly less expensive on a marginal cost basis than an implementation on commodity hardware. Every way people have tried has the perverse effect of increasing the cost to make the first ASIC, which just further centralizes mining. Absent new ideas - ideas that will be from hardware engineers, not programmers - SHA256² is probably the best of many bad choices. (and no, PoS still stands for something other than 'stake')
We are however lucky that we have physics and (maybe) international relations on our side. It will always be cheaper to run a small amount of hashing power than a large amount, at least for some value of 'small' and 'large'. It's the cube-square law, as applied to heat dissipation: a small amount of mining equipment has a much larger surface area compared to a large amount, and requires much less effort per unit hashing power to keep cool. Additionally finding profitable things to do with small amounts of waste heat is easy and distributed all over the planet - heating houses, water tanks, greenhouses, etc. As for international relations, restricting access to chip fabrication facilities is a very touchy subject due to how it can make or break economies, and especially militaries. (but that's a hopeful view)
Solving problem #1 and getting rid of pools is probably possible - Andrew Miller came up with the idea of a non-outsourceable puzzle. While tricky to implement, the basic idea is simple: make it possible for whomever finds the block to steal the reward, even after the fact, in a way that doesn't make it possible to prove any specific miner did it. Adding this protection to Bitcoin requires a hard-fork as described, though perhaps there's a similar idea that can be done as a soft-fork. Block withholding attacks - where miners simply don't submit valid solutions - could also achieve the same goal, although in a far uglier way.
Solving problem #2 and letting miners achieve low varience even with a small amount of hashing power is also possible - p2pool does it already, and tree chains would do it as a side effect. However p2pool is itself just another type of pool, so if non-outsourceable puzzles are implemented they'll need to be compatible. p2pool in its current form is also less then ideal - it does need a lot of bandwidth, and if you have lower latency than average you have a significant unfair advantage. But these are problems that (probably) can be fixed before adding it to the protocol. (this can be done in a soft-fork)
Do I still think Bitcoin will succeed in the long run? Yes, but I'm a lot less sure of it than I used to be. I'm also very skeptical that any of the above will be implemented without a clear failure of the system happening first - there's just too many people, miners, developers, merchants, etc. whose heads are in the sand, or even for that matter, actively making the problem worse. If that failure happens it's quite likely that the Bitcoin price will drop to essentially nothing - not a good way to start a few months of work fixing the problem when my expenses are denominated in Canadian dollars. I hope I'm on the wrong side of history here, but I'm a cautious guy and selling a significant chunk of bitcoins is just playing it safe; I'm not rich.
BTW If you owe me fiat and normally pay me via Bitcoin, for the next 2.5 weeks you can pay me based on the price I sold at, $650 CAD.
submitted by petertodd to Bitcoin [link] [comments]

There seems to be a lot of major misunderstandings going on in regards to transaction confirmations (in particular, PoS sales)

So iv been reading posts/comments on here lately and it seems like there is some serious misunderstandings by alot of people in regards for the time it takes for a transaction to get confirmed on the blockchain, especially in the use case of merchant PoS sales.
You guys are comparing apples to oranges here
The time it takes for one confirmation is how long it takes for a transaction to be CLEARED. As in, verified, confirmed, 100% complete and irreversible transaction of bitcoins. In comparison, the transaction clearing time for credit cards is something around 30 - 60 days. At any point during that 30-60 period, you could find out that the credit card you used was actually stolen and the money gets reversed, plus you are out of pocket already from providing the product/service. In bitcoin, this same window is about 10 minutes to an hour.
If you see an incoming transaction to your address, you can be 99.9% sure that its legit and will eventually confirm. You absolutely do not need to force your customer to wait 10 or more minutes just to confirm their payment. Just give them the damn coffee and let them be. Would you make your customer wait in store for an 2 entire months just to make sure they dont call up their bank and make a chargeback?
In order to actually pull off a 0-confirmation double spend attempt, I believe it goes something like this (someone correct me if im wrong):
So basically, its a combination of capability (not many people know how to manually create transactions, relatively), timing, alot of luck and also having the balls to attempt it in person. Its not something thats a garunteed success rate. However if you happen to control > 50 % of the mining hash power, then it suddenly starts to become alot easier, which is why its important to keep our mining distributed (and why everyone freaked out in january over ghash.io)
Just think for a second how many tens of thousands (millions..?) of fraudulent credit card and bank transactions happen every single day... and not to mention how retard-edly easy it is to scam peoples credit card numbers
tl;dr it's very reasonably safe to accept 0 confirmation payments in most use cases. just dont do it for transactions where some serious cash is in play (have patience and wait the short amount of time instead)
submitted by cryptonaut420 to Bitcoin [link] [comments]

My draft for a new /r/btc FAQ explaining the split from /r/Bitcoin to new users

If /btc is going to actually compete with /Bitcoin, it needs to be just as friendly and informative to new users, especially given its position as the “non default” or “breakaway” sub. The current /btc sticky saying "Welcome to the Wiki" doesn't even have any content in it and I feel this is a bit of a wasted opportunity to create an informative resource that new users will see by default and everyone else can link to instead of retyping things over and over about the history and difference between the subs.
Here's what I've written as a starting point. I've done my best to keep it as concise and relevant as possible but in all honesty it is a complicated issue and a short but effective explanation is basically impossible. I hope the community can expand/improve on it further.
Quick bit about me
I got into Bitcoin in October 2013, when /Bitcoin had around 40k subscribers if I remember correctly, so by now I've actually personally experienced a large portion of Bitcoin's history - including the events preceding and since the creation of this sub. I have been an active and popular poster on /Bitcoin for almost all of that time, until the split and my subsequent banning. With the recent censorship fiasco, I'm finding I have to reiterate the same points over and over again to explain to newer users what happened with the /Bitcoin vs /btc split, questions about hard forks, what is likely to happen in the future and so on. So I put a couple of hours into writing this post to save myself the trouble in future.

/btc FAQ - Historical split from /Bitcoin megathread - v0.1

There is a TL:DR; at the bottom, but it is exactly that. If you skip straight to the TL:DR; then don’t expect sympathy when you post questions that have already been covered in the lengthy and detailed main post.

New to Bitcoin?

I am totally new to Bitcoin. What is it? How does it work? Can/should I mine any? Where can I buy some? How do I get more information?
All of these questions are actually really well covered in the /Bitcoin FAQ. Check it out in a new tab here. Once you've got a bit of a handle on the technology as a whole, come back here for the rest of the story.

History: /btc vs /Bitcoin

What's the difference between /btc and /Bitcoin? What happened to create two such strongly opposed communities? Why can't I discuss /btc in /Bitcoin?
Historically, the /Bitcoin subreddit was the largest and most active forum for discussing Bitcoin. As Bitcoin grew close to a cap in the number of transactions it could process, known as the 1MB block size limit, the community had differing opinions on the best way to proceed. Note that this upcoming issue was anticipated well ahead of time, with Satoshi's chosen successor to lead the project Gavin Andresen posting about it in mid 2015. Originally, there was quite a broad spread of opinions - some people favoured raising the blocksize to various extents, some people favoured implementing a variety of second layer solutions to Bitcoin, probably most people thought both could be a good idea in one form or another.
This topic was unbelievably popular at the time, taking up almost every spot on the front page of /Bitcoin for weeks on end.
Unfortunately, the head moderator of /Bitcoin - theymos - felt strongly enough about the issue to use his influence to manipulate the debate. His support was for the proposal of existing software (called Bitcoin Core) NOT to raise the blocksize limit past 1MB and instead rely totally on second layer solutions - especially one called Segregated Witness (or SegWit). With some incredibly convoluted logic, he decided that any different implementations of Bitcoin that could potentially raise the limit were effectively equivalent to separate cryptocurrencies like Litecoin or Ethereum and thus the block size limit or implement other scaling solutions were off-topic and ban-worthy. At the time the most popular alternative was called Bitcoin XT and was supported by experienced developers Gavin Andresen and Mike Hearn, who have since both left Bitcoin Core development in frustration at their marginalisation. Theymos claimed that for Bitcoin XT or any other software implementation to be relevant to /Bitcoin required "consensus", which was never well defined, despite it being seemingly impossible for everyone to agree on the merits of a new project if no one was allowed to discuss it in the first place. Anyone who didn't toe the line of his vaguely defined moderation policy was temporarily or permanently banned. There was also manipulation of the community using the following tactics - which can still be seen today:
This created enormous uproar among users, as even many of those in favour of Bitcoin Core thought it was authoritarian to actively suppress this crucial debate. theymos would receive hundreds of downvotes whenever he posted: for example here where he gets -749 for threatening to ban prominent Bitcoin business Coinbase from the subreddit.
In an extraordinary turn of events, Theymos posted a thread which received only 26% upvotes in a sample size of thousands announcing that he did not care if even 90% of users disagreed with his policy, he would not change his opinion or his moderation policy to facilitate the discussion the community wanted to have. His suggested alternative was instead for those users, however many there were, to leave.
Here are Theymos' exact words, as he describes how he intends to continue moderating Bitcoin according to his own personal rules rather than the demands of the vast majority of users, who according to him clearly don't have any "real arguments" or "any brains".
Do not violate our rules just because you disagree with them. This will get you banned from /Bitcoin , and evading this ban will get you (and maybe your IP) banned from Reddit entirely.
If 90% of /Bitcoin users find these policies to be intolerable, then I want these 90% of /Bitcoin users to leave. Both /Bitcoin and these people will be happier for it. I do not want these people to make threads breaking the rules, demanding change, asking for upvotes, making personal attacks against moderators, etc. Without some real argument, you're not going to convince anyone with any brains -- you're just wasting your time and ours. The temporary rules against blocksize and moderation discussion are in part designed to encourage people who should leave /Bitcoin to actually do so so that /Bitcoin can get back to the business of discussing Bitcoin news in peace.
/btc was therefore born in an environment not of voluntary departure but of forced exile.
This forced migration caused two very unfortunate occurrences:
  1. It polarised the debate around Bitcoin scaling. Previously, there was a lot of civil discussion about compromise and people with suggestions from all along the spectrum were working to find the best solution. That was no longer possible when a moderation policy would actively suppress anyone with opinions too different from Theymos. Instead it forced everyone into a "with us or against us" situation, which is why the /btc subreddit has been pushed so far in favour of the idea of a network hard fork (discussed below).
  2. It has distracted Bitcoin from its mission of becoming a useful, global, neutral currency into a war of information. New users often find /Bitcoin and assume it to be the authoritative source of information, only to later discover that a lot of important information or debate has been invisibly removed from their view.
Since then, like any entrenched conflict, things have degenerated somewhat on both sides to name calling and strawman arguments. However, /btc remains committed to permitting free and open debate on all topics and allowing user downvotes to manage any "trolling" (as /Bitcoin used to) instead of automatic shadow-banning or heavy-handed moderator comment deletion (as /Bitcoin does now). Many users in /Bitcoin deny that censorship exists at all (it is difficult to see when anyone pointing out the censorship has their comment automatically hidden by the automoderator) or justify it as necessary removal of "trolls", which at this point now includes thousands upon thousands of current and often long-standing Bitcoin users and community members.
Ongoing censorship is still rampant, partially documented in this post by John Blocke
For another detailed account of this historical sequence of events, see singularity87 s posts here and here.
/btc has a public moderator log as demonstration of its commitment to transparency and the limited use of moderation. /Bitcoin does not.
Why is so much of the discussion in /btc about the censorship in /Bitcoin? Isn't a better solution to create a better community rather than constantly complaining?
There are two answers to this question.
  1. Over time, as /btc grows, conversation will gradually start to incorporate more information about the Bitcoin ecosystem, technology, price etc. Users are encouraged to aid this process by submitting links to relevant articles and up/downvoting on the /new and /rising tab as appropriate. However, /btc was founded effectively as a refuge for confused and angry users banned from /Bitcoin and it still needs to serve that function so at least some discussion of the censorship will probably always persist (unless there is a sudden change of moderation policy in /Bitcoin).
  2. The single largest issue in Bitcoin right now is the current cap on the number of transactions the network can process, known as the blocksize limit. Due to the censorship in /Bitcoin, open debate of the merits of different methods of addressing this problem is impossible. As a result, the censorship of /Bitcoin (historically the most active and important Bitcoin community forum) has become by proxy the single most important topic in Bitcoin, since only by returning to open discussion would there be any hope of reaching agreement on the solution to the block size limit itself. As a topic of such central importance, there is naturally going to be a lot of threads about this until a solution is found. This is simply how Bitcoin works, that at any one time there is one key issue under discussion for lengthy periods of time (previous examples of community "hot topics" include the demise of the original Bitcoin exchange Mt Gox, the rise to a 51% majority hash rate of mining pool GHash.io and the supposed "unveiling" of Bitcoin's anonymous creator Satoshi Nakamoto).

Bitcoin Network Hard Forks

What is a hard fork? What happens if Bitcoin hard forks?
A network hard fork is when a new block of transactions is published under a new set of rules that only some of the network will accept. In this case, Bitcoin diverges from a single blockchain history of transactions to two separate blockchains of the current state of the network. With any luck, the economic incentive for all users to converge quickly brings everyone together on one side of the fork, but this is not guaranteed especially since there is not a lot of historical precedent for such an event.
A hard fork is necessary to raise the block size limit above its 1MB cap.
Why is /btc generally in favour of a hard fork and /Bitcoin generally against?
According to a lot of users on /Bitcoin - a hard fork can be characterised as an “attack” on the network. The confusion and bad press surrounding a hard fork would likely damage Bitcoin’s price and/or reputation (especially in the short term). They point to the ongoing turmoil with Ethereum as an example of the dangers of a hard fork. Most of /Bitcoin sees the stance of /btc as actively reckless, that pushing for a hard fork creates the following problems:
According to a lot of users on /btc - a hard fork is necessary despite these risks. Most of /btc sees the stance of /Bitcoin as passively reckless, that continuing to limit Bitcoin’s blocksize while remaining inactive creates the following problems:
Bitcoiners are encouraged to examine all of the information and reach their own conclusion. However, it is important to remember that Bitcoin is an open-source project founded on the ideal of free market competition (between any/all software projects, currencies, monetary policies, miners, ideas etc.). In one sense, /btc vs /Bitcoin is just another extension of this, although Bitcoiners are also encouraged to keep abreast of the top posts and links on both subreddits. Only those afraid of the truth need to cut off opposing information.
What do Bitcoin developers, businesses, users, miners, nodes etc. think?
Developers
There are developers on both sides of the debate, although it is a common argument in /Bitcoin to claim that the majority supports Bitcoin Core. This is true in the sense that Bitcoin Core is the current default and has 421 listed code contributors but misleading because not only are many of those contributors authors of a single tiny change and nothing else but also many major figures like Gavin Andresen, Mike Hearn and Jeff Garzik have left the project while still being counted as historical contributors.
Businesses including exchanges etc.
A definite vote of confidence is not available from the vast majority of Bitcoin businesses, and wouldn't be binding in any case. The smart decision for most businesses is to support both chains in the event of a fork until the network resolves the issue (which may only be a day or two).
Users
Exact user sentiment is impossible to determine, especially given the censorship on /Bitcoin.
Miners and Nodes
Coin.dance hosts some excellent graphical representations of the current opinion on the network.
Node Support Information
Miner Support Information
What do I do if the network hard forks?* Do we end up with two Bitcoins?
Firstly, in the event of a hard fork there is no need to panic. All Bitcoins are copied to both chains in the case of a split, so any Bitcoins you have are safe. HOWEVER, in the event of a fork there will be some period of confusion where it is important to be very careful about how/why you spend your Bitcoins. Hopefully (and most likely) this would not last long - everyone in Bitcoin is motivated to converge into agreement for everyone's benefit as soon as possible - but it's impossible to say for sure.
There isn't a lot of historical data about cryptocurrency hard forks, but one example is alternative cryptocurrency Ethereum that forked into two coins after the events of the DAO and currently exists as two separate chains, ETH (Ethereum) and ETC (Ethereum Classic).
The Ethereum fork is not a good analogy for Bitcoin because its network difficulty target adjusts every single block, so a massive drop in hash rate does not significantly impede its functioning. Bitcoin’s difficult target adjusts only every 2100 blocks - which under usual circumstances takes two weeks but in the event of a hard fork could be a month or more for the smaller chain. It is almost inconceivable that a minority of miners would willingly spend millions of dollars over a month or more purely on principle to maintain a chain that was less secure and processed transactions far slower than the majority chain - even assuming the Bitcoins on this handicapped chain didn't suffer a market crash to close to worthless.
Secondly, a hard fork is less likely to be a traumatic event than it is often portrayed in /Bitcoin:

What Happens Now

How do I check on the current status of opinion?
Coin.dance hosts some excellent graphical representations of the current opinion on the network.
Node Support Information
Miner Support Information
Users are also welcome to engage in anecdotal speculation about community opinion based on their impression of the commentary and activity in /btc and /Bitcoin.
Haven't past attempts to raise the blocksize failed?
There is no time limit or statute of limitations on the number of attempts the community can make to increase the block size and scale Bitcoin. Almost any innovation in the history of mankind required several attempts to get working and this is no different.
The initial attempt called Bitcoin XT never got enough support for a fork because key developer Mike Hearn left out of frustration at trying to talk around all the censorship and community blockading.
The second major attempt called Bitcoin Classic gained massive community momentum until it was suddenly halted by the drastic implementation of censorship by Theymos described above.
The most popular attempt at the moment is called Bitcoin Unlimited.
/btc is neutral and welcoming to any and all projects that want to find a solution to scaling Bitcoin - either on-or off-chain. However, many users are suspicious of Bitcoin Core's approach that involves only SegWit, developed by a private corporation called Blockstream and that has already broken its previous promises in a document known as the Hong Kong Agreement to give the network a block size limit raise client along with Segregated Witness (only the latter was delivered) .
What if the stalemate is irreconcilable and nothing ever happens?
Increasing transaction fees and confirmation times are constantly increasing the pressure to find a scaling solution - leading some to believe that further adoption of Bitcoin Unlimited or a successor scaling client will eventually occur. Bitcoin Core's proposed addition of SegWit is struggling to gain significant support and as it is already the default client (and not censored in /Bitcoin) it is unlikely to suddenly grow any further.
If the stalemate is truly irreconcilable, eventually users frustrated by the cost, time and difficulty of Bitcoin will begin migrating to alternative cryptocurrencies. This is obviously not a desirable outcome for long standing Bitcoin supporters and holders, but cannot be ignored as the inevitable free market resort if Bitcoin remains deadlocked for long enough.

TL:DR;

I don’t know anything about Bitcoin. Help me?
What’s the /btc vs /Bitcoin story?
  • Bitcoin is at its transaction capacity and needs to scale to onboard more users
  • The community was discussing different ways to do this until the biased head moderator of /Bitcoin Theymos got involved
  • Theymos, started an authoritarian censorship rampage which culminated in telling 90% of /Bitcoin users to leave. /btc is where they went. Here is the thread where it all started. Note the 26% upvoted on the original post, the hundreds of upvotes of community outcry in the comments and the graveyard of [removed] posts further down the chain. Highly recommended reading in its entirety.
  • To this day, /Bitcoin bans all discussion of alternative scaling proposals and /btc
  • Bitcoin is about freedom, and can’t function effectively with either an artificially restricted transaction cap or a main community forum that is so heavily manipulated. This subreddit is the search for solutions to both problems as well as general Bitcoin discussion.
What’s the deal with hard forks?
  • No TL:DR; possible, read the whole post.
What happens now?
  • Node Support Information
  • Miner Support Information
  • Debate continues in /btc, and generally doesn't continue in /Bitcoin - although posts referencing /btc or Bitcoin Unlimited regularly sneak past the moderators because it is such a crucial topic
  • Eventually one side or the other breaks, enough miners/nodes/users get on one side and Bitcoin starts scaling. This may or may not involve a hard fork.
  • If not, fees and average confirmation times continue to rise until users migrate en masse to an altcoin. This is not an imminent danger, as can be seen by the BTC marketcap dominance at its historical levels of 80+% but could change at any time
submitted by Shibinator to btc [link] [comments]

To arms Bitcoin community! Help us to complete this mining installation for the Zürich MoneyMuseum. We are not asking for funds. Only your expertise needed! 20$ tip if you give us the relevant clue to solve or mitigate our main problem. Nice pictures of the exhibition inside as well…

Edit:
A big thank you to all people who helped us we can now mine true pps with diff1! The people in this thread which have helped most have been awarded. I want to mention also the operator of btcmp.com denis2342 and Luke-Jr.
Actually looking at the miner screen in the Linux terminal helped a lot ;-). The pool constantly resigned to stratum with variable difficulty. We can now mine true pps with diff1. Getwork with long polling seems to be default after disabling stratum...
We will probably post again, when there is a video of the installation in action...
Again many thanks. Learned a lot.
Edit: Thank you for all the answeres so far! We will try different things now and report back. Tip bounty will be distrubuted as soon as we found out what finally does the trick. Ths could take a few days. The offerd tip will be distributed and very likeley a few others as well.
First of all, let me tell you that the Bitcoin Exhibition at the Zürich MoneyMuseum is most likely the biggest and most diverse of it’s kind. Please read more about the museum and the exhibition below.
Help us solve the following problem we experience with our “Muscle Powered Proof of Work” installation:
Me and a friend have invested a lot of time to build an installation for the Museum. It is basically a 10GHash/s miner and RapberryPi which is powered by a hand generator (Maxon DC motor with planetary gear). Here are some pictures of the installation, although not entirely put together yet. There are still some changes planned.
https://www.dropbox.com/sh/0qcvl3wu4romhnt/AAAYF08lnVAy6W6KEepE7e2Ua?dl=0
Now let’s get to the core of our problem:
We are mining at the getwork diff1 pool btcmp.com as it is a true pps pool with getwork diff1. The visitors in the museum can power the generator for 2-3min and see directly how many Satoshis the "network" (actually pool but we don't want to confuse the visitors to much at that point) has given the museum for their work. This all works well so far but one problem remains. Sometimes the pool does not get a share from us for more than 40 seconds or even more than 60 in some cases. I have calculated that with 8.4 GHash/s we should find a share about every 0.5 seconds in average (diff1). I think when the pool gets a share it gets all the hashes as it then accounts for several Satoshis. Statistically we get per minute what we should get in theory. We would very much like to lower the time between the accepted shares by the pool, however. This would help to make the overall experience much smoother for the visitors.
Please look at this screenshot from MinePeon and answer some questions:
https://www.dropbox.com/s/lb1jei4trc9kqe5/MinePeonScreenshot.png?dl=0
We see that we get a lot of diff1 hashes. However, only 11 shares/packages have been accepted. The Is there a possibility to set the miner SW so it submits to the pool as soon as a share is found? It seems to send them in packages which sometimes have 4-5 seconds in between but sometimes a much as 80 seconds. I would like to submit packages of hashes much more often. How can this be influenced?
What exactly are the Getworks (GW)?
What exactly are the Accepted ones (Acc)? This is where the TipBounty is. Help us to get a better Acc/diff1 ratio. Best would be 1:1.
What exactly are the rejected ones (Rej)?
What exactly are the discarded ones (Disc)?
What exactly are the difficulty one hashes (diff1)?
Now some of these questions seem very very basic but it is important for us to understand what these are and how we can influence these. We have a 1:1 correlation between the Acc and the pool side acknowledgement of shares/packages. So whenever the MinePeon shows one more for this value the pool value for last submitted share goes to “moments ago”.
Does the miner SW have a setting where we can set after how many diff1 hashes a package of hashes is sent to the pool? If no, do you have another idea why so few are sent? Ideally we would set it so the diff1 hashes are sent every 5 seconds or so, probably even more often.
Is stratum with fixed diff1 possible? If so, would it be better to use stratum?
Are there critical settings if we should know of? (we have tried --request-diff and --no-submit-stale)
We are using BFGMiner on MinePeon if that matters. We could switch to CGMiner if that would help. Any help is very much appreciated. The museum is doing a great job explaining Bitcoin basics. We had special focus on interactive learning and have several things to underline this.
I hope to hear back from you so we can improve our installation. Please don't hesitate to ask if you have further questions. We are both not mining experts.
Thanks for reading and AMA.
SimonBelmond
Current features of the Bitcoin exhibition at the Zürich MoneyMuseum:
Current Features:
  • Life screen with various stats/charts/parameters/transactions…
  • Printed infographics.
  • Muscle powered PoW: Hand generator with 5v and 3.5-5A output, Raspberry Pi, MinePeon, 5x Antminer U2+ plus a screen to show the hash-rate at the pool and/or in MinePeon web interface. This screen will not be hand powered. This installation will complement their coining die (go to 1:27 to see what I mean).
  • The Bitcoin mining evolution (CPU, GPU, FPGA, ASIC)
  • A few short (2-3 minutes) interviews.
  • Other wallets, Trezor, PiperWallet
  • ATM Prototype, functional
  • MoneyMuseum Bit-Cards
  • PiperWallet to use.
  • Casascius and other physical Bitcoins, Wallets (also some commemorative coins), Paper wallet like one out of the first Bitcoin (A)TM ever
  • Bitcoin Quiz
  • 12 Picture tours
    • Bitcoin for beginners
    • Bitcoin advanced
    • Debunking 13 Bitcoin myths
    • What you definitely have to know
    • The history of Bitcoin
    • Bitcoin und traditional forms of money
    • Alternatives to Bitcoin
    • Citations about Bitcoin
    • How do I open an account?
    • How do I get Bitcoin?
    • Bitcoin community and economy
    • Bitcoin as a platform
I see this as a good opportunity for Bitcoin, so let’s embrace it. I am especially excited to compare the traditional forms of money which used proof of work to the new money which also uses proof of work. I think in that context it will be much easier for the visitors to value this concept.
A lot of schools and other groups book guided tours at the museum. It is open on every Friday from December 05. On. Entry is free of charge.
Edit:Markdown, typos
submitted by SimonBelmond to Bitcoin [link] [comments]

Full English Transcript of Gavin's AMA on 8BTC, April 21st. (Part 1)

Part 2
Part 3
Raw transcript on Google Docs (English+Chinese): https://docs.google.com/document/d/1p3DWMfeGHBL6pk4Hu0efgQWGsUAdFNK6zLHubn5chJo/edit?usp=sharing
Translators/Organizers: emusher, kcbitcoin, nextblast, pangcong, Red Li, WangXiaoMeng. (Ranked in alphabetical order)
1.crypto888
Q: What is your relationship with Blockstream now? Are you in a Cold War? Your evaluation on BS was pretty high “If this amazing team offers you a job, you should take it,” tweeted Gavin Andresen, Chief Scientist, Bitcoin Foundation.” But now, what’s your opinion on BS?
A: I think everybody at Blockstream wants Bitcoin to succeed, and I respect and appreciate great work being done for Bitcoin by people at Blockstream.
We strongly disagree on priorities and timing; I think the risks of increasing the block size limit right away are very small. I see evidence of people and businesses getting frustrated by the limit and choosing to use something else (like Ethereum or a private blockchain); it is impossible to know for certain how dangerous that is for Bitcoin, but I believe it is more danger than the very small risk of simply increasing or eliminating the block size limit.
2. Ma_Ya
Q: 1) Why insist on hard fork at only 75%? You once explained that it is possible to be controlled by 5% if we set the threshold at 95%. I agree, but there should be some balance here. 75% means a high risk in splitting, isn’t it too aggressive? Is it better if we set it to 90%?
A: 1)The experience of the last two consensus changes is that miners very quickly switch once consensus reaches 75% -- the last soft fork went from 75% support to well over 95% support in less than one week. So I’m very confident that miners will all upgrade once the 75% threshold is reached, and BIP109 gives them 28 days to do so. No miner wants to create blocks that will not be accepted by the network.
Q: 2) How to solve the potentially very large blocks problem Classic roadmap may cause, and furthur causing the centralization of nodes in the future?
A: 2)Andreas Antonopoulos gave a great talk recently about how people repeatedly predicted that the Internet would fail to scale. Smart engineers proved them wrong again and again, and are still busy proving them wrong today (which is why I enjoy streaming video over my internet connection just about every night).
I began my career working on 3D graphics software, and saw how quickly we went from being able to draw very simple scenes to today’s technology that is able to render hundreds of millions of triangles per second.
Processing financial transactions is much easier than simulating reality. Bitcoin can easily scale to handle thousands of transactions per second, even on existing computers and internet connections, and even without the software optimizations that are already planned.
Q: 3) Why do you not support the proposal of RBF by Satoshi, and even plan to remove it in Classic completely?
A: 3) Replace-by-fee should be supported by most of the wallets people are using before it is supported by the network. Implementing replace-by-fee is very hard for a wallet, especially multi-signature and hardware wallets that might not be connected to the network all of the time.
When lots of wallet developers start saying that replace-by-fee is a great idea, then supporting it at the network level makes sense. Not before.
Q: 4) . Your opinion on soft fork SegWit, sidechain, lighnting network. Are you for or against, please give brief reasons. Thanks.
A: 4) The best way to be successful is to let people try lots of different things. Many of them won’t be successful, but that is not a problem as long as some of them are successful.
I think segregated witness is a great idea. It would be a little bit simpler as a hard fork instead of a soft fork (it would be better to put the merkle root for the witness data into the merkle root in the block header instead of putting it inside a transaction), but overall the design is good.
I think sidechains are a good idea, but the main problem is finding a good way to keep them secure. I think the best uses of sidechains will be to publish “write-only” public information involving bitcoin. For example, I would like to see a Bitcoin exchange experiment with putting all bids and asks and trades on a sidechain that they secure themselves, so their customers can verify that their orders are being carried out faithfully and nobody at the exchanges is “front-running” them.
Q: 5) Can you share your latest opinion on Brainwallet? It is hard for new users to use long and complex secure passphrase, but is it a good tool if it solves this problem?
A: 5) We are very, very bad at creating long and complex passphrases that are random enough to be secure. And we are very good at forgetting things.
We are much better at keeping physical items secure, so I am much more excited about hardware wallets and paper wallets than I am about brain wallets. I don’t trust myself to keep any bitcoin in a brain wallet, and do not recommend them for anybody else, either.
3. BiTeCui
Q: Gavin, do you have bitcoins now? What is your major job in MIT? Has FBI ever investigated on you? When do you think SHA256 might be outdated, it seems like it has been a bit unsafe?
A: Yes, a majority of my own person wealth is still in bitcoins -- more than a financial advisor would say is wise.
My job at MIT is to make Bitcoin better, in whatever way I think best. That is the same major job I had at the Bitcoin Foundation. Sometimes I think the best way to make Bitcoin better is to write some code, sometimes to write a blog post about what I see happening in the Bitcoin world, and sometimes to travel and speak to people.
The FBI (or any other law enforcement agency) has never investigated me, as far as I know. The closest thing to an investigation was an afternoon I spent at the Securities and Exchange Commission in Washington, DC. They were interested in how I and the other Bitcoin developers created the software and how much control we have over whether or not people choose to run the software that we create.
“Safe or unsafe” is not the way to think about cryptographic algorithms like SHA256. They do not suddenly go from being 100% secure for everything to completely insecure for everything. I think SHA256 will be safe enough to use in the all ways that Bitcoin is using it for at least ten years, and will be good enough to be used as the proof-of-work algorithm forever.
It is much more likely that ECDSA, the signature algorithm Bitcoin is using today, will start to become less safe in the next ten or twenty years, but developer are already working on replacements (like Schnorr signatures).
4. SanPangHenBang
Q: It’s a pleasure to meet you. I only have one question. Which company are you serving? or where do you get your salary?
A: The Media Lab at MIT (Massachusetts Institute of Technology) pays my salary; I don’t receive regular payments from anybody else.
I have received small amounts of stock options in exchange for being a techical advisor to several Bitcoin companies (Coinbase, BitPay, Bloq, Xapo, Digital Currency Group, CoinLab, TruCoin, Chain) which might be worth money some day if one or more of those companies do very well. I make it very clear to these companies that my priority is to make Bitcoin better, and my goal in being an advisor to them is to learn more about the problems they face as they try to bring Bitcoin to more of their customers.
And I am sometimes (once or twice a year) paid to speak at events.
5.SaTuoXi
Q: Would you mind share your opinion on lightning network? Is it complicated to implement? Does it need hard fork?
A: Lightning does not need a hard fork.
It is not too hard to implement at the Bitcoin protocol level, but it is much more complicated to create a wallet capable of handling Lightning network payments properly.
I think Lightning is very exciting for new kinds of payments (like machine-to-machine payments that might happen hundreds of times per minute), but I am skeptical that it will be used for the kinds of payments that are common on the Bitcoin network today, because they will be more complicated both for wallet software and for people to understand.
6. pangcong
Q: 1) There has been a lot of conferences related to blocksize limit. The two took place in HongKong in Decemeber of 2015 and Feberary of 2016 are the most important ones. Despite much opposition, it is undeniable that these two meetings basically determines the current status of Bitcoin. However, as the one of the original founders of Bitcoin, why did you choose to not attend these meetings? If you have ever attended and opposed gmax’s Core roadmap (SegWit Priority) in one of the meetings, we may be in a better situation now, and the 2M hard fork might have already begun. Can you explain your absence in the two meetings? Do you think the results of both meetings are orchestrated by blockstream?
A: 1) I attended the first scaling conference in Montreal in September of 2015, and had hoped that a compromise had been reached.
A few weeks after that conference, it was clear to me that whatever compromise had been reached was not going to happen, so it seemed pointless to travel all the way to Hong Kong in December for more discussion when all of the issues had been discussed repeatedly since February of 2015.
The February 2016 Hong Kong meeting I could not attend because I was invited only a short time before it happened and I had already planned a vacation with my family and grandparents.
I think all of those conferences were orchestrated mainly by people who do not think raising the block size limit is a high priority, and who want to see what problems happen as we run into the limit.
Q: 2) We have already known that gmax tries to limit the block size so as to get investment for his company. However, it is obvious that overthrowing Core is hard in the short term. What if Core continues to dominate the development of Bitcoin? Is it possible that blockstream core will never raise the blocksize limit because of their company interests?
A: 2) I don’t think investment for his company is Greg’s motivation-- I think he honestly believes that a solution like lightning is better technically.
He may be right, but I think it would be better if he considered that he might also be wrong, and allowed other solutions to be tried at the same time.
Blockstream is a funny company, with very strong-willed people that have different opinions. It is possible they will never come to an agreement on how to raise the blocksize limit.
7. HeiYanZhu
Q: I would like to ask your opinion on the current situation. It’s been two years, but a simple 2MB hard fork could not even be done. In Bitcoin land, two years are incredibly long. Isn’t this enough to believe this whole thing is a conspiracy?
A: I don’t think it is a conspiracy, I think it is an honest difference of opinion on what is most important to do first, and a difference in opinion on risks and benefits of doing different things.
Q: How can a multi-billion network with millions of users and investors be choked by a handful of people? How can this be called decentrilized and open-source software anymore? It is so hard to get a simple 2MB hard fork, but SegWig and Lighting Network with thousands of lines of code change can be pushed through so fast. Is this normal? It is what you do to define if you are a good man, not what you say.
A: I still believe good engineers will work around whatever unnecessary barriers are put in their way-- but it might take longer, and the results will not be as elegant as I would prefer.
The risk is that people will not be patient and will switch to something else; the recent rapid rise in developer interest and price of Ethereum should be a warning.
Q: The problem now is that everybody knows Classic is better, however, Core team has controlled the mining pools using their powers and polical approaches. This made them controll the vast majority of the hashpower, no matter what others propose. In addition, Chinese miners have little communication with the community, and do not care about the developement of the system. Very few of them knows what is going on in the Bitcoin land. They almost handed over their own power to the mining pool, so as long as Core controls the pools, Core controls the whole Bitcoin, no matter how good your Classic is. Under this circumstance, what is your plan?
A: Encourage alternatives to Core. If they work better (if they are faster or do more) then Core will either be replaced or will have to become better itself. I am happy to see innovations happening in projects like Bitcoin Unlimited, for example. And just this week I see that Matt Corallo will be working on bringing an optmized protocol for relaying blocks into Core; perhaps that was the plan all along, or perhaps the “extreme thin blocks” work in Bitcoin Unlimited is making that a higher priority. In any case, competition is healthy.
Q: From this scaling debate, do you think there is a huge problem with Bitcoin development? Does there exsit development centrilization? Does this situation need improvment? For example, estabilish a fund from Bitcoin as a fundation. It can be used for hiring developers and maintainers, so that we can solve the development issue once and for all.
A: I think the Core project spends too much time thinking about small probability technical risks (like “rogue miners” who create hard-to-validate blocks or try to send invalid blocks to SPV wallets) and not enough time thinking about much larger non-technical risks.
And I think the Core project suffers from the common open source software problem of “developers developing for developers.” The projects that get worked on are the technically interesting projects-- exciting new features (like the lightning network), and not improving the basic old features (like improving network performance or doing more code review and testing).
I think the situation is improving, with businesses investing more in development (but perhaps not in the Core project, because the culture of that project has become much less focused on short-term business needs and more on long-term exciting new features).
I am skeptical that crowd-funding software development can work well; if I look at other successful open source software projects, they are usually funded by companies, not individuals.
8.jb9802
You are one of the most-repected person in Bitcoin world, I won’t miss the chance to ask some questions. First of all, I am a Classic supporter. I strongly believe that on-chain transcations should not be restrained artificially. Even if there are transcations that are willing to go through Lighting Network in the future, it should be because of a free market, not because of artificial restrication. Here are some of my questions:
Q: 1) For the past two years, you’ve been proposing to Core to scale Bitcoin. In the early days of the discussion, Core devs did agree that the blocksize should be raised. What do you think is the major reason for Core to stall scaling. Does there exist conflict of interest between Blockstream and scaling?
A: 1) There might be unconscious bias, but I think there is just a difference of opinion on priorities and timing.
Q: 2) One of the reason for the Chinese to refuse Classic is that Classic dev team is not technically capable enough for future Bitcoin development. I also noticed that Classic does have a less frequent code release compared to Core. In your opinion, is there any solution to these problems? Have you ever thought to invite capable Chinese programers to join Classic dev team?
A: 2) The great thing about open source software is if you don’t think the development team is good enough (or if you think they are working on the wrong things) you can take the software and hire a better team to improve it.
Classic is a simple 2MB patch on top of Core, so it is intentional that there are not a lot of releases of Classic.
The priority for Classic right now is to do things that make working on Classic better for developers than working on Core, with the goal of attracting more developers. You can expect to see some results in the next month or two.
I invite capable programmers from anywhere, including China, to help any of the teams working on open source Bitcoin software, whether that is Classic or Core or Unlimited or bitcore or btcd or ckpool or p2pool or bitcoinj.
Q: 3) Another reason for some of the Chinese not supporting Classic is that bigger blocks are more vulnerable to spam attacks. (However, I do think that smaller blocks are more vlunerable to spam attack, because smaller amount of money is needed to choke the blockchain.) What’s our opinion on this?
A: 3) The best response to a transaction spam attack is for the network to reject transactions that pay too little fees but to simply absorb any “spam” that is paying as much fees as regular transactions.
The goal for a transaction spammer is to disrupt the network; if there is room for extra transactions in blocks, then the network can just accept the spam (“thank you for the extra fees!”) and continue as if nothing out of the ordinary happened.
Nothing annoys a spammer more than a network that just absorbs the extra transactions with no harmful effects.
Q: 4) According to your understanding on lighting network and sidechains,if most Bitcoin transactions goes throught lighting network or sidechains, it possible that the fees paid on the these network cannot reach the main-chain miners, which leaves miners starving. If yes, how much percent do you think will be given to miners.
A: 4) I don’t know, it will depend on how often lightning network channels are opened and closed, and that depends on how people choose to use lightning.
Moving transactions off the main chain and on to the lightning network should mean less fees for miners, more for lightning network hubs. Hopefully it will also mean lower fees for users, which will make Bitcoin more popular, drive up the price, and make up for the lower transaction fees paid to miners.
Q: 5) The concept of lighting network and sidechains have been out of one or two years already, when do you think they will be fully deployed.
A: 5) Sidechains are already “fully deployed” (unless you mean the version of sidechains that doesn’t rely on some trusted gateways to move bitcoin on and off the sidechain, which won’t be fully deployed for at least a couple of years). I haven’t seen any reports of how successful they have been.
I think Lightning will take longer than people estimate. Seven months ago Adam Back said that the lightning network might be ready “as soon as six months from now” … but I would be surprised if there was a robust, ready-for-everybody-to-use lightning-capable wallet before 2018.
Q: 6)Regarding the hard fork, Core team has assumed that it will cause a chain-split. (Chinese miners are very intimitated by this assumption, I think this is the major reason why most of the Chinese mining pools are not switching to Classic). Do you think Bitcoin will have a chain-split?
A: 6) No, there will not be a chain split. I have not talked to a single mining pool operator, miner, exchange, or major bitcoin business who would be willing to mine a minority branch of the chain or accept bitcoins from a minority branch of the main chain.
Q: 7) From your point of view, do you think there is more Classic supporters or Core supporters in the U.S.?
A: 7) All of the online opinion pools that have been done show that a majority of people worldwide support raising the block size limit.
9. btcc123
Q: Which is more in line with the Satoshi’s original roadmap, Bitcoin Classic or Bitcoin Core? How to make mining pools support and adopt Bitcoin Classic?
A: Bitcoin Classic is more in line with Satoshi’s original roadmap.
We can’t make the mining pools do anything they don’t want to do, but they are run by smart people who will do what they think is best for their businesses and Bitcoin.
10.KuHaiBian
Q: Do you have any solution for mining centralization? What do you think about the hard fork of changing mining algorithms?
A: I have a lot of thoughts on mining centralization; it would probably take ten or twenty pages to write them all down.
I am much less worried about mining centralization than most of the other developers, because Satoshi designed Bitcoin so miners make the most profit when they do what is best for Bitcoin. I have also seen how quickly mining pools come and go; people were worried that the DeepBit mining pool would become too big, then it was GHash.io…
And if a centralized mining pool does become too big and does something bad, the simplest solution is for businesses or people to get together and create or fund a competitor. Some of the big Bitcoin exchanges have been seriously considering doing exactly that to support raising the block size limit, and that is exactly the way the system is supposed to work-- if you don’t like what the miners are doing, then compete with them!
I think changing the mining algorithm is a complicated solution to a simple problem, and is not necessary.
11. ChaLi
Q: Last time you came to China, you said you want to "make a different". I know that in USA the opposition political party often hold this concept, in order to prevent the other party being totally dominant. Bitcoin is born with a deep "make a different" nature inside. But in Chinese culture, it is often interpreted as split “just for the sake of splitting”, can you speak your mind on what is your meaning of "make a different"?
A: I started my career in Silicon Valley, where there is a lot of competition but also a lot of cooperation. The most successful companies find a way to be different than their competitors; it is not a coincidence that perhaps the most successful company in the world (Apple Computer) had the slogan “think different.”
As Bitcoin gets bigger (and I think we all agree we want Bitcoin to get bigger!) it is natural for it to split and specialize; we have already seen that happening, with lots of choices for different wallets, different exchanges, different mining chips, different mining pool software.
12. bluestar
Q: 1) The development of XT and Classic confirmed my thoughts that it is nearly impossible to use a new version of bitcoin to replace the current bitcoin Core controlled by Blockstream. I think we will have to live with the power of Blockstream for a sufficient long time. It means we will see the deployment of SegWit and Lighting network. If it really comes to that point, what will you do? Will you also leave like Mike Hearn?
A: 1) With the development of Blockchain, bitcoin will grow bigger and bigger without any doubts, And also there will be more and more companies related to the bitcoin network. When it comes to money, there will be a lot of fights between these companies. Is it possible to form some kind of committee to avoid harmful fights between these companies and also the situation that a single company controlling the direction of the bitcoin development? Is there any one doing this kind of job right now?
Q: 2) My final question would be, do you really think it is possible that we can have a decentralized currency? Learning from the history, it seems like every thing will become centralized as long as it involves human. Do you have any picture for a decentralized currency or even a society? Thanks.
A: 2) I think you might be surprised at what most people are running a year or three from now. Perhaps it will be a future version of Bitcoin Core, but I think there is a very good chance another project will be more successful.
I remember when “everybody” was running Internet Explorer or Firefox, and people thought Google was crazy to think that Chrome would ever be a popular web browser. It took four years for Chrome to become the most popular web browser.
In any case, I plan on working on Bitcoin related projects for at least another few years. Eventually it will become boring or I will decide I need to take a couple of years of and think about what I want to do next.
As for fights between companies: there are always fights between companies, in every technology. There are organizations like the IETF (Internet Engineering Task Force) that try to create committees so engineers at companies can spend more time cooperating and less time fighting; I’m told by people who participate in IETF meetings that they are usually helpful and create useful standards more often than not.
Finally, yes, I do think we can have a “decentralized-enough” currency. A currency that might be controlled at particular times by a small set of people or companies, but that gives everybody else the ability to take control if those people or businesses misbehave.
13. satoshi
Hi Gavin, I have some questions:
Q: 1) I noticed there are some new names added to the classic team list. Most people here only know you and Jeff. Can you briefly introduce some others to the Chinese community?
A: 1)
Tom Zander has been acting as lead developer, and is an experienced C++ developer who worked previously on the Qt and Debian open source projects.
Pedro Pinheiro is on loan from Blockchain.info, and has mostly worked on continuous integration and testing for Classic.
Jon Rumion joined recently, and has been working on things that will make life for developers more pleasant (I don’t want to be more specific, I don’t want to announce things before they are finished in case they don’t work out).
Jeff has been very busy starting up Bloq, so he hasn’t been very active with Classic recently. I’ve also been very busy traveling (Barbados, Idaho, London and a very quick trip to Beijing) so haven’t been writing much code recently.
Q: 2) if bitcoin classic succeeded (>75% threshold), what role would you play in the team after the 2MB upgrade finished, as a leader, a code contributor, a consultant, or something else?
A: 2)Contributor and consultant-- I am trying not to be leader of any software project right now, I want to leave that to other people who are better at managing and scheduling and recruiting and all of the other things that need to be done to lead a software project.
Q: 3) if bitcoin classic end up failed to achieve mainstream adoption (<75% 2018), will you continue the endeavor of encouraging on-chain scaling and garden-style growth of bitcoin?
A: 3) Yes. If BIP109 does not happen, I will still be pushing to get a good on-chain solution to happen as soon as possible.
Q: 4) Have you encountered any threat in your life, because people would think you obviously have many bitcoins, like what happened to Hal Finney (RIP), or because some people have different ideas about what bitcoin's future should be?
A: 4) No, I don’t think I have received any death threats. It upsets me that other people have.
Somebody did threaten to release my and my wife’s social security numbers and other identity information if I did not pay them some bitcoins a couple of years ago. I didn’t pay, they did release our information, and that has been a little inconvenient at times.
Q: 5) Roger Ver (Bitcoin Jesus) said bitcoin would worth thousands of dollars. Do you have similar thoughts? If not, what is your opinion on bitcoin price in future?
A: 5) I learned long ago to give up trying to predict the price of stocks, currencies, or Bitcoin. I think the price of Bitcoin will be higher in ten years, but I might be wrong.
Q: 6) You've been to China. What's your impression about the country, people, and the culture here? Thank you!
A: 6) I had a very quick trip to Beijing a few weeks ago-- not nearly long enough to get a good impression of the country or the culture.
I had just enough time to walk around a little bit one morning, past the Forbidden City and walk around Tianmen Square. There are a LOT of people in China, I think the line to go into the Chairman Mao Memorial Hall was the longest I have ever seen!
Beijing reminded me a little bit of London, with an interesting mix of the very old with the very new. The next time I am in China I hope I can spend at least a few weeks and see much more of the country; I like to be in a place long enough so that I really can start to understand the people and cultures.
14. Pussinboots
Q: Dear Gavin, How could I contact you, we have an excellent team and good plans. please confirm your linkedin.
A: Best contact for me is [email protected] : but I get lots of email, please excuse me if your messages get lost in the flood.
15. satoshi
Q: Gavin, you've been both core and classic code contributor. Are there any major differences between the two teams, concerning code testing (quality control) and the release process of new versions?
A: Testing and release processes are the same; a release candidate is created and tested, and once sufficiently tested, a final release is created, cryptographically signed by several developers, and then made available for download.
The development process for Classic will be a little bit different, with a ‘develop’ branch where code will be pulled more quickly and then either fixed or reverted based on how testing goes. The goal is to create a more developer-friendly process, with pull requests either accepted or rejected fairly quickly.
16. tan90d
I am a bitcoin enthusiast and a coin holder. I thank you for your great contribution to bitcoin. Please allow me to state some of my views before asking:
  1. I'm on board with classic
  2. I support the vision to make bitcoin a powerful currency that could compete with Visa
  3. I support segwit, so I'll endorse whichever version of bitcoin implementation that upgrades to segwit, regardless of block size.
  4. I disagree with those who argue bitcoin main blockchain should be a settlement network with small blocks. My view is that on the main chain btc should function properly as a currency, as well as a network for settlement.
  5. I'm against the deployment of LN on top of small block sized blockchain. Rather, it should be built on a chain with bigger blocks.
  6. I also won’t agree with the deployment of many sidechains on top of small size block chain. Rather, those sidechains should be on chain with bigger blocks.
With that said, below are my questions:
Q: 1) If bitcoin is developed following core's vision, and after the 2020 halving which cuts block reward down to 6.125BTC, do you think the block transaction fee at that time will exceed 3BTC?
A: 1) If the block limit is not raised, then no, I don’t think transaction fees will be that high.
Q: 2) If bitcoin is developed following classic's vision, and after the 2020 halving which cuts block reward down to 6.125BTC, do you think the block transaction fee at that time will exceed 3BTC?
A: 2) Yes, the vision is lots of transactions, each paying a very small fee, adding up to a big total for the miners.
Q: 3) If bitcoin is developed following core's vision, do you think POW would fail in future, because the mining industry might be accounted too low value compared with that of the bitcoin total market, so that big miners could threaten btc market and gain profit by shorting?
*The questioner further explained his concern.
Currently, its about ~1.1 billion CNY worth of mining facilities protecting ~42 billion CNY worth (6.5 Billion USD) of bitcoin market. The ratio is ~3%. If bitcoin market cap continues to grow and we adopt layered development plan, the mining portion may decrease, pushing the ratio go even down to <1%, meaning we are using very small money protecting an huge expensive system. For example, in 2020 if bitcoin market cap is ~100 billion CNY, someone may attempt to spend ~1 billion CNY bribe/manipulate miners to attack the network, thus making a great fortune by shorting bitcoin and destroying the ecosystem.
A: 3) Very good question, I have asked that myself. I have asked people if they know if there have been other cases where people destroyed a company or a market to make money by shorting it -- as far as I know, that does not happen. Maybe because it is impossible to take a large short position and remain anonymous, so even if you were successful, you would be arrested for doing whatever you did to destroy the company or market (e.g. blow up a factory to destroy a company, or double-spend fraud to try to destroy Bitcoin).
Q: 4) If bitcoin is developed following classic's vision, will the blocks become too big that kill decentralization?
A: 4) No, if you look at how many transactions the typical Internet connection can support, and how many transactions even a smart phone can validate per second, we can support many more transactions today with the hardware and network connections we have now.
And hardware and network connections are getting faster all the time.
Q: 5) In theory, even if we scale bitcoin with just LN and sidechains, the main chain still needs blocks with size over 100M, in order to process the trading volume matching Visa's network. So does core have any on-chain scaling plan other than 2MB? Or Core does not plan to evolve bitcoin into something capable of challenging visa?
A: 5) Some of the Core developer talk about a “flexcap” solution to the block size limit, but there is no specific proposal.
I think it would be best to eliminate the limit all together. That sounds crazy, but the most successful Internet protocols have no hard upper limits (there is no hard limit to how large a web page may be, for example), and no protocol limit is true to Satoshi’s original design.
Q: 6) If (the majority of) hash rate managed to switch to Classic in 2018, will the bitcoin community witness the deployment of LN in two years (~2018)?
A: 6) The bottleneck with Lightning Network will be wallet support, not support down at the Bitcoin protocol level. So I don’t think the deployment schedule of LN will be affected much whether Classic is adopted or not.
Q: 7) If (majority) hash rate upgraded to blocks with segwit features in 2017 as specified in core's roadmap, would classic propose plans to work on top of that (blocks with segwit)? Or insist developing simplified segwit blocks as described in classic's roadmap?
A: 7) Classic will follow majority hash rate. It doesn’t make sense to do anything else.
Q: 8) If most hash rate is still on core's side before 2018, will you be disappointed with bitcoin, and announce that bitcoin has failed like what Mike did, and sell all your stashed coins at some acceptable price?
A: 8) No-- I have said that I think if the block size limit takes longer to resolve, that is bad for Bitcoin in the short term, but smart engineers will work around whatever road blocks you put in front of them. I see Bitcoin as a long-term project.
Q: 9) If we have most hash rate switched to classic's side before 2018, what do you think will be the fate of Blockstream company?
A: 9) I think Blockstream might lose some employees, but otherwise I don’t think it will matter much. They are still producing interesting technology that might become a successful business.
Q: 10) If we have most hash rate still on core's side before 2018, what do you think will be the fate of Blockstream company?
A: 10) I don’t think Blockstream’s fate depends on whether or not BIP109 is adopted. It depends much more on whether or not they find customers willing to pay for the technology that they are developing.
Q: 11) If we have most hash rate still on core's side before 2018, what do you think will be the fate of companies that support classic, such as Coinbse, bitpay, and Blockchain.info?
A: 11) We have already seen companies like Kraken support alternative currencies (Kraken supports Litecoin and Ether); if there is no on-chain scaling solution accepted by the network, I think we will see more companies “hedging their bets” by supporting other currencies that have a simpler road map for supporting more transactions.
Q: 12) If we have most hash rate switched to classic's side before 2018, will that hinder the development of sidechain tech? What will happen to companies like Rockroot(Rootstock?) ?
A: 12) No, I think the best use of sidechains is for things that might be too risky for the main network (like Rootstock) or are narrowly focused on a small number of Bitcoin users. I don’t think hash rate supporting Classic will have any effect on that.
Q: 13) Between the two versions of bitcoin client, which one is more conducive to mining industry, classic or core?
A: 13) I have been working to make Classic better for the mining industry, but right now they are almost identical so it would be dishonest to say one is significantly better than the other.
17. Alfred
Q: Gavin, can you describe what was in your mind when you first learned bitcoin?
A: I was skeptical that it could actually work! I had to read everything I could about it, and then read the source code before I started to think that maybe it could actually be successful and was not a scam.
submitted by kcbitcoin to btc [link] [comments]

Why I went from Bits to Butts

About a year and a half ago I learned about Bitcoin just prior to The Great Run Up of April 2013. I was immediately captivated by the idea of making an insane ROI of +500% and let greed cloud my perception from the start. To be fair though, I diligently studied Bitcoin: how it worked from mining to transactions, the economic implications, and the freedom it offered from banks. After a few months of research I was sold. I began to pour the little money that I had saved into it, convinced that in a few months time, my investment of $3,000 would soon hit $10,000+. I was right for all the wrong reasons.
From the beginning, I thought I had stumbled upon the financial equivalent of the Internet in its infancy. This was going to be the greatest decision of my life. Bitcoin offered a system that allowed people to be their own individual bank while making money in the process. I was also convinced that the US Central Bank was devaluing the dollar through inflation and it was my duty to protect myself and my future. In reality, Bitcoin offers no advantages over the traditional banking system, which I will detail below:
Ever since the last run up in price during the month of December, I have become disillusioned by Bitcoin and the incessant promotion over in /Bitcoin. None of the above mentioned flaws are actually good for Bitcoin. Nor is Bitcoin a safe investment if you are looking to store your money. If you want Bitcoin to be a currency it has to be relatively stable during periods of high volume; which is the exact opposite of how it acts. I sold my initial position in Bitcoin and now am sitting on a decent amount because I know that the pyramid scheme will continue for the near future and will look to cash out during the next run up.
To be honest though, I think the technology is quite amazing (especially how it has overcome the double-spend problem) and would not be surprised if future financial instruments or other technologies are based off of the original concept. I do however think that Bitcoin is a pyramid scheme and I am grateful that I have come to this conclusion before it's too late.
submitted by JesusDied to Buttcoin [link] [comments]

Fire the miners: why central planning does not work

It is well understood that the entire ecosystem has roughly built itself into a $15b ecosystem via the security and reward structure which Satoshi built to power bitcoin's supply and issuance. Trustlessness is built into the monetary policy of the currency. We don't need to ask the miners to do anything, because the structure of the code incentivizes them to mine and secure transact as part of the bitcoin economy.
Are there edge cases? Absolutely. Throughout bitcoin's history, discussion has always been present at various academic levels around the possibilities where miners may abuse the system. There have been subsequent discussions on backup security procedures if the security system of the network is compromised. An easy and simple method is a POW fork. Miner(s) behaving maliciously? No prob, fork off, the economic majority will continue mining the main chain and they're kicked off.
But recently, people has put forth the idea of "firing" the miners. Not that any malicious acts have occurred, but that the simple lack of miner support for a core developer proposal is odious. That this lack of action is equivalent to an act upon bitcoin.
But we know that's not true. Why would miners blow up the thing they use to make money off of? The block reward (not fees) comprise 95% of miner revenue. Fees are a few sprinkles on top of a block reward cake. They have more monetary incentive than anyone to ensure that bitcoin value grows, and that it grows in-line with the block halvings to ensure that their business is protected, remaining profitable.
Notice that none of these miners are securing the blockchain because a few of us are old high school buds and they're doing us a favor, or because they so idealistically believe in this vision of bitcoin, we're not begging the miners to do anything.
Bitcoin works because incentives are aligned. The code has created a productive asset that serves as an effective currency as it grows. The miners are doing all of this because mining and maintaining these assets earns them money; it's how they make a living. Not surprisjng then that we've never even seem close to a hint of an at a miner attack on the bitcoin network. A 51% attack is often discussed, but we've never seen one. In fact, there was a period of time when Ghash.io did have over 51% of the hash rate. Guess what happened? They took no malicious act, and in the long term, cloud miners left the pool to revert to an equilibrium where miners can't even attack that vector. But the point is, the entire market is incentived to cooperate. That's how the bitcoin economy works and precisely why it is so successful.
So we can't fire the miners even if we wanted to. They are actually operating as businesses and have explicit performance needs met to manage a p&l. This isn't a fun development playground for coders. Miners aren't taking an ideological stance here in some bitcoin holy war, they are just making sure the bitcoin network continues to operate. They rejecting code that does not work. Forking away does not solve the fundamental scaling problem, because it does not resolve the issue for the miners.
Begging or threatening the miners will only do harm. Central planning by government bureaucrats is never productive relative to a free market. Forcing the means of production to take some action, or to produce in a certain way (below 1mb blocks) is inefficient. The only solution is to actually work with the miners to determine how to best secure the blockchain for the cheapest price, because again, we all have the same incentives.
Tl:Dr talk of firing miners is all hot air. Also miners are friends not food
submitted by jeanduluoz to btc [link] [comments]

Achieving consensus in distributed systems – that chink in the armor hasn't gone away

First a disclosure: My name is Will, I founded Novauri, and our team is building a service that will allow users to buy and sell bitcoin in the US while keeping full control of their private keys as a mandatory design element, not an option.
Please SIGN UP for our US only closed beta test in 2015 here. It's super fast, takes 20 seconds, and we'll guarantee no transaction fees for the life of your account. Plus our rates will be highly competitive. Read all about it on the website!
I don’t like marketing, I intensely hate the spam I see on the forums, so my approach is going to be to write (semi) intelligent posts and hopefully gain customers through interaction and discourse, as opposed to spamming it up with astroturf and pictures of hipsters having fun that you could be like if you used our product. Now… my thoughts.
Proof of work – a tragedy of the commons
Not very long ago a mining pool called ghash.io reached 55% bitcoin mining power. It’s widely known that POW suffers from the tragedy of the commons. Mining is SHA256x2, which makes it really simple to build coin flipping application specific integrated circuits (ASICs) that run this faster than general purpose processors. This creates an economic incentive towards centralization where miners who can access the best ASICs first have a major advantage in hashing power per dollar.
Pools, a solution to a market demand that exacerbates the problem
A second problem is a solution to an economic demand, the existence of mining “pools”. Because a block is solved only every 10 minutes, as bitcoin scales, it becomes increasingly unlikely to ever solve a block by yourself, even with substantial processing power. Mining pools allow the “little guys” to participate too and contribute their hashing power to a pool of miners. This way they receive a portion of any block solved by the pool, enabling a steady and more consistent return on their investment in hardware, facilities and electricity.
Yet while pools solve a problem, they create a second issue, the centralization of mining power by pool operators. Because the blocks are “solved” by the managing pool directly, this gives the pool the same controls and ability to act poorly as if they had the hardware themselves.
One might argue that market forces will naturally correct things if a mining pool approaches 51%, but this has been disproven in practice with ghash.io. Selfish miners using ghash.io essentially put the entire system in dire peril by letting ghash.io reach 55%. They waited for others to “go first” before switching pools. This is the very definition of “tragedy of the commons”. I would argue it was only the price of bitcoin that changed the miners’ behavior, and reviewing the charts shows that the prices did not lead the mining power concentrations at all, which also defies common wisdom, but in reality is entirely true. P2P pool is a great idea, but it has not offered the same economic benefits to miners as other privately run pools on a balance sheet. Until it does, don't look there for a long term answer. Miners are trying to make a return, and if a pool gives them an advantage, most will use that pool over P2P. Mining is not a charity.
Proof of state – lack consensus and bring monopoly issues
Some might point to proof of stake as a potential solution (POS). Put very simply, POS is where by virtue of the fact that you own X virtual currency, you have a proportionate chance to win a vote or tiebreaker when confirming transactions.
Unfortunately, POS fails to provide a disincentive to fork and suffers from the monopoly problem. Ownership carries voting rights, and there is nothing wasted (no work) by voting for both sides of a fork. There is no consensus, so POS systems are generally hybrid models where POW is used to achieve consensus of forks regardless. POS also has a monopoly problem, which are as serious as POW’s problems. So solving bitcoin's problems with POS seems like a dead end. Very smart people have tried, and so far nothing viable has materialized that is stable enough to be trusted with something as mature and valuable as bitcoin.
So… let’s relist all of the bad news!!!
Solutions thus far are myopic, influenced by personal interests or blimp sized egos (I am one to talk), and are often more academic than pragmatic. Most are just to complicated to work or to be implemented safely without years of refinement in an alt coin.
Well, is there hope? What is the practical thing to do? Should we do nothing?
I would argue that there are three problems we must solve at once, and all three problems are very much interrelated. It’s one @[email protected]@ of a puzzle. We need to:
1) Make pooled mining uneconomical
2) Figure out a way to make small scale mining cost advantageous
3) Do 1 and 2 but allow normalized returns for little guys so they can run a small business or profitable hobby, without it being a lottery ticket.
Some say that a 51% issue would not be the end because we would know very quickly who the bad actor is and could react accordingly. I’m a little more concerned. A real shakeup in the core of bitcoin would shake confidence, and could set us back years. I feel we should as a community put a much higher priority on finding a practical, viable solution. Nothing academic, nothing incredibly complicated, but something that can shift the economics of the situation and solve the three problems listed above. While we have plenty of issues around individual usability, this is, in my humble opinion, the largest remaining vulnerability in bitcoin today.
So… what to do? How do we solve all three of these problems at once? What are the possible combinations of solutions that work? Let me take a stab at it…
1) Deterring pooled mining
Let’s give more serious consideration to two-phase mining.
The idea is to keep (SHA256(SHA256(header))) and add a requirement for (SHA256(SIG(header, privkey))), requiring the block to be signed with the private key of the miner. This kills pooled mining, dead. Miners can solve SHA256x2 but the pool needs the miner’s private key to sign the block header, which would allow the miner to steal the reward, which kills pools very fast.
2) Disincentivizing centralization of mining power
2a) Small scale heat recovery systems
We need to get people thinking about small scale heat recovery systems built around mining hardware. This will allow mining activity to serve as a source of heat in cold climates, or perform work where heat is required.
One example might be liquid submersion of the asic or heatsinks couples with a pump, radiator and fan in small, modular design might be economically viable. Electric heat is used very commonly, and when powered from clean power sources like solar, geothermal, nuclear (yes, nuclear I would count in the “clean” bucket) and wind, the net is a zero emission system that heats like an electric heater but adds security to the financial system in return, and generates profit for the beneficiary.
2b) Rotating or amorphous block hashing algorithms
Another possibility is to rotate or add complexity to the hash algorithms used to solve blocks. Instead of SHA256x2, perhaps SHA256x2 is rotated with scrypt? Perhaps there are many algorithms that rotate to add even more complixity. This would at a minimum make it much harder to design ASICs, and would institute a memory requirement as well. This would at least close the gap between specialized mining operations and home hobbyists. The problem is, what miner in their right mind would go with a hard fork in this direction? This is likely unviable because of economics.
2a is probably the way to go. Is there a 2c or d?
3) Normalizing returns
The issue here is that coinbase generation in a decentralized model is like winning the lottery. Your 2a heater would be unlikely to ever solve a block in it’s lifetime.
So this last issue is even harder to solve than 2. 3 is the reason mining pools were created in the first place. How do you increase reward frequency while lowering reward to generate a more predictable return?
Or maybe we are asking the wrong question or thinking in the wrong direction or dimension? Is there a way to centralize and normalize rewards in a safer way? Could the heater's price be subsidized by the mining activity if that activity was safely hard wired in the heater's hardware to pay block rewards to the reseller or manufacturer? Could electricity rates be offset by rewards going to electricity companies as a subsidy to completely smooth out the return on investment for a bitcoin heater?
That last one is tough and would need a really great strategy to reach a critical mass.
Does anyone smarter than me have an idea? This is really the problem. It’s three interrelated issues.
In closing, sign up for our closed US beta. There are still some spots left. We're poor but talented and our hearts are in the right place. Thank you!
submitted by MrMadden to Bitcoin [link] [comments]

Here's a security section I quickly dashed off last night. What I need here is to go through some of the insane BS people recommend to secure your bitcoins.

What I need to add to the end of this is to go through some of the insane BS people recommend to secure your bitcoins, if there are any examples that are both hilarious and actually referenced by other bitcoiners as sensible and obvious. Not just birdbaths, but highly-upvoted zillion-part lists, etc.
(I have got to finalise a first draft, this has taken too long already.)
“Secured by math:” how the blockchain is secured
The phrase “secured by math” promises many things, but it’s also important to note what it doesn’t promise.
Bitcoin relies on distributed consensus, and approximating an acceptable solution to deciding the correct transaction record: the blockchain is what a majority of mining capacity says it is. Mining secures the blockchain by adding transactions to a block and adding a hash to that block that wins the current ten minutes’ mining reward lottery. Bitcoin’s consensus model relies on the fact that you can’t outdo this casually.
You can outdo it if you control more than 50% of hashing power – a “51% attack.” Any miner who had over 50% could write the longest blockchain to say whatever they liked and have it stick. They could double-spend confirmed transactions, or prevent any new transactions they didn’t approve of.
Even if you have less than 50%, controlling a substantial fraction of the hashing power means you can still get transactions that didn’t happen into the accepted blockchain – a “49% attack” or “Finney attack” (first written up by Hal Finney). Researchers have identified several possible attacks a selfish miner could mount, from 25% of the hash rate upward.
Neither of these are hypothetical issues – the usual presumption is that nobody would do this as it would destroy faith in Bitcoin, but mining naturally centralises from economies of scale (as we will detail later), and mining pool GHash.io topped 50% of the hash rate several times in June and July 2014, though they then committed never to go over 40%. GHash doing this was particularly problematic, as the pool had in fact double-spent against a gambling site in 2014. They blamed this on a rogue employee, but this demonstrates how the self-interested incentives for an individual may be different to those for an organisation.
In practice, the economies of scale in Bitcoin mining have not been overcome. As of November 2016, seven pools controlled 75% of the hash rate, with the largest individual pool at 19.3%. There is no regulatory control to ensure that multiple pools cannot have a single owner; we may already have over 50% of mining substantially controlled by a single entity.
Securing your own bitcoins: being your own bank
“Secured by math” does not promise security of your own bitcoins. Indeed, “be your own bank” means you take on the job of providing all security and having the technical understanding to do so. The Bitcoin Wiki offers a page with step-by-step instructions on how to secure your personal Bitcoin wallet, of a degree of complication that would dismay even a typical IT professional, let alone a casual user. This is why the vast majority of users store their bitcoins on an exchange, in the manner of a savings bank, even as they are largely unregulated and uninsured.
[insert hilarious example instructions here]
submitted by dgerard to Buttcoin [link] [comments]

Beginner's Guide to Exchanges - Part 2

Beginner’s Guide to Exchanges – Part 2

A little late, but as promised here is Part 2 of the Beginner’s Guide to Exchanges. I would like to sincerely thank everyone for their support and feedback in making these.
Link to Part 1
This time I also made a Google Docs survey in the hopes of sharing the results with the community. I thought we could share what we use as a whole and why redditors choose the exchanges they do. For skeptics (as you all should be), I assure you that I am not collecting personal information. This is for recreation and if you are still wary, then by all means abstain!
Link to Survey
In Part 3 I will be wrapping up this series by covering decentralized, semi-decentralized, and derivative exchanges. Here it goes!

00 – Concepts and Definitions (Continued)

04 – Fiat Exchanges – Canada

QuadrigaCX

Country Linked Bank Transfer Wire Transfer Paypal Credit/Debit Crypto Transfer
CAD Deposit 1%/ Withdraw Free Free Free (Withdraw Only) 1% (Withdraw Only) Free
USD - Free Free (Withdraw Only) - Free
Exchange Type Maker Taker
Fiat .5% .5%
BTC/ETH .2% .2%
Feature Details
2FA Google Authenticator or Email 2FA Available
Wallet Security Undisclosed amount of funds in cold storage
Web Security 3rd Party Security provided by CloudFlare
Bug Bounty Expired $50 bounties
Tier Level Name Email DOB Phone Address Official ID Bank Info Credit Score Limits
Basic Account X X Digital only, Limits Vary
Verified Account X X X X X X Limits Vary

05 – Fiat Exchanges – Europe

CEX.IO

Country Credit/Debit Bank Transfer Crypto Transfer
Europe 3.5%+ €0.24 Deposit €0 / Withdraw €25 (SEPA €10) Free
Russia 5% + ₽ 15.57 - -
UK 3.5%+ £0.20 Deposit £0 / Withdraw £20 (SEPA Free
US 3.5%+ $0.25 Deposit $0 / Withdraw $50 Deposit $0 / Withdraw 1%
Exchange Type Maker Taker
All Currencies 0% .20%
Feature Details
2FA Google Authenticator Available
Wallet Security Undisclosed amount of funds in cold storage
Credit Card Data Overseen by 3rd Party Kyte Consultants
Web Security SSL Certificates and Encrypted Personal Data
Tier Level Name Email DOB Phone Address ID + Photo Bank Info KYC Limits
Basic Account X X X Digital only
Verified Account X X X X X X $10,000 Daily/$100,000 Monthly

BTC-E / XBTC-E

Country Credit/Debit Bank Transfer Paypal
Europe - SEPA - Deposit .5% / Withdraw 1% (€100 min) -
Russia 6% 6% -
US 7% Deposit .5% ($20 min) / Withdraw 1% ($100 min) 7%
Exchange Type Maker Taker
All Currencies .20% .20%
Feature Details
2FA Google Authenticator Available
Password Expiration Must be changed every 6 months
DDoS Protection 3rd Party Security Services provided by CloudFlare
Bug Bounty Yes at xBTCe
Tier Level Name Email DOB Phone Address Official ID Bank Info KYC Limits
Verified User X X X X X No Stated Limits

Liqui.io

Exchange Type Maker Taker
All Digital Currencies 0.1% .25%
Feature Details
2FA Google Authenticator Available
Bug Bounty Reported bounty posted on HackerOne (unconfirmed)

06 – Fiat Exchanges – South Korea

안녕하세요 여러분! 혹시 우리 한국인 친구 이 보고서를 한국어로 읽고 싶어한다면 알려주세요. 관심이 많이 있다면 간단한 한국어 보고서도 만들 수 있습니다. This year, ETH has taken off like a rocket in the Land of the Morning Calm. With a population of just 50 million, South Koreans account for almost 30% of daily ETH trade volume. Even more surprising is that currently the daily volume of ETH is about 5 times higher than that of Bitcoin on Korean exchanges. Since demand is high, ETH is trading at a premium on Korean exchanges. Some users have been talking about capitalizing off this imbalance by trading on arbitrage between exchanges. For those who have no connection to Korea and hope to do so, I have bad news – all Korean exchanges require a National ID number and access to a Korean bank account. This makes Korean exchanges virtually closed to Korean nationals and those with long-term visas. Sorry everyone.

Bithumb

Coinone

Korbit

07 – Fiat Exchanges – China

With a great deal of anticipation, major Chinese exchanges started trading ETH this summer. Since these exchanges deal huge volumes of Bitcoin already, naturally it was expected that they invest heavily into ETH as well. So far this hasn’t quite lived up to the hype with many exchanges still favoring Bitcoin, Litecoin, Altcoins, and even Ethereum Classic (Gulp). Three of these exchanges underwent inspections by the Peoples Bank of China earlier this year and will be working closely with the government to ease fears of money laundering and market manipulation. There are a lot of Chinese sites, and since my Chinese is non-existent this list is basically just for name recognition. In many ways these sites are very similar in regards to security, verification, and fees compared to their western counterparts; just marketed at a different audience and currency. If users are seriously interested in these exchanges and making reviews, please contribute or ask!

OK Coin

Huobi

CH-BTC

Yunbi

08 – Coinswaps & Cryto-converters

ShapeShift

Changelly

submitted by poop_dragon to ethtrader [link] [comments]

What Does it Take To Mine 1 Bitcoin a Day? End of 2018 ... How Much Can You Make Mining Bitcoin With 6X 1080 Ti ... GHash.io & Hypothetical 51% Attack on Bitcoin Bitcoin How Long To Mine 1 Bitcoin - How To Generate Bitcoin Daily tutorial: Bitcoin mining with CGMiner - YouTube

GHash.IO is one of the largest Bitcoin mining pools, which entered the mining market in July 2013 and contributes to over 30% of the overall hashing power making it the #1 pool in the Bitcoin network. GHash.IO charges 0% pool fee and provides 24/7 technical support for its users. October 2016, GHash.IO pool officially closed. The team behind GHash.IO offers development of custom-built pools ... Bitcoin trading volume 10m 1h 6h 24h 3d 7d 30d 6m 2y 5y all. auto second minute hour day week month. Currency Exchange Spread depth Mining Pool Comparison Chart type Scale type Sum within price range Display sum in Smoothing Smoothing ... Bitcoin Mining Calculator. Got your shiny new ASIC miner? Wondering when it will pay off? If you enter your hash rate below, this page will calculate your expected earnings in both Bitcoins and dollars over various time periods (day, week, and month). We have compiled a short table showing how much Bitcoin you could mine with 1 THS hashrate starting November 1st up until the estimate for February 1st this year. This period covers 3 months and as you can see the coins mined for just these 3 months pretty much halved due to the rapid increase in the network hashrate and thus the network ... since that’s 20 times the current hash rate, you will need 140 GH to earn 1 BTC per day. Another way to look at it this there is a fixed rate of BTC that enter the market per day 25 BTC per Block * 6 blocks per hour * 24 hours per day = 3600 BTC per day. So you would need 1/3,600 of the current average hash rate to earn 1 BTC per day.

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What Does it Take To Mine 1 Bitcoin a Day? End of 2018 ...

Today's video shows you what it would take to mine 1 Bitcoin a day. To be honest, as soon as i calculated the actual numbers i was a bit shocked! But it does... A very simple video tutorial showing you how to get started mining Bitcoin using your regular Windows desktop or Laptop computer. In this guide I'll take you... In this video I show you how to start mining Bitcoins with CGMiner and an account at your favorite miningpool. Get CGMiner at: https://bitcointalk.org/index.... You are being LIED TO about BITCOIN 🚨DON'T BE FOOLED! Cuban Gates O'Leary conspire against crypto - Duration: 13:24. FUD TV 131,523 views SUBSCRIBE FOR MORE HOW MUCH - http://shorturl.at/arBHL Nviddia GTX 1080 Ti - https://amzn.to/2Hiw5xp 6X GPU Mining Rig Case - https://bitcoinmerch.com/produc...

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