Category Archives: Segwit

What is SegWit2x? Here’s What You Need to Know.

The origins of Segwit2x go back many years now as the Bitcoin community has long debated how to scale Bitcoin to meet the increasing volume of transactions on the network.

One camp, primarily comprised of the big miners, has argued for increasing the size of the blocks in the Bitcoin blockchain from 1 MB to a much larger size. Blocks are mined every ten minutes and contain all the recent transactions.

The bigger the block size, the more transactions the network can process per block. Doing this would require a “hard fork”, a backwards incompatible protocol change, which would result in splitting the chain into two coins.

The other camp has argued that since this idea does not have widespread consensus, contentiously splitting the chain would not be safe and presented a serious moral hazard. Increasing the block size too large centralizes the network and makes it impossible for most users to run their own nodes.

To answer scaling, this camp developed a “soft fork”, a voluntary and backwards compatible protocol upgrade, titled “Segregated Witness” or “Segwit”. Segwit introduced a major bug fix for transaction malleability and unlocked a variety of new features. Notably, a new transaction type which used much less data so more transactions could fit in a single 1 MB block. This effectively turned a1 MB block into a block theoretically as large as 4 MB. In addition, Segwit better paved the way for the upcoming “Lighting Network”, which creates ultra cheap and instant payments on the Bitcoin network.

Segwit was deployed on the network set to activate once 95% of mining hashpower signaled it was ready. Despite Segwit being entirely voluntary and opt-in, this readiness signal was provided by developers as a courtesy so all miners would be ready to process the new transactions and would not inadvertently miss out on any mining revenue.

Since the big block camp was primarily comprised of the largest mining pools, they instead used this readiness signal as a veto and therefore blocked the activation of Segwit as they argued for their solution instead.

Bitmain, leading Chinese mining operation and Segwit2x signatory

This left the Bitcoin community at an impasse for some time as the debate raged on. Solutions for a hard fork to a bigger block size were presented but never received significant consensus outside of the miners who developed them and their supporters.

Finally in May 2017, the lead miners met with a group of big Bitcoin businesses in a private meeting and crafted the “New York Agreement” to activate what they called “Segwit2x”. Their idea was that with a majority of miners and enough large businesses in support of this proposal that the rest of the community would fall in line with them and this new chain would be “Bitcoin” without contention.

Segwit2x called for the activation of Segwit in August to be followed up by a hardfork to a 2 MB base block size. Since Segwit was an effective block size increase itself, this was essentially increasing the block size to 8 MB. The top developers from the open source Bitcoin development process known as “Bitcoin Core” warned that Segwit2x presented a variety of grave risks to the network. Namely, the increase in the centralization of miners and depraving users of the ability to run their own full nodes. In addition, they warned a rushed hard fork like this violated the most minimal of responsible engineering practices. Citing the lack of significant specification and time for testing, as well as the introduction of new attack vectors.

So while Segwit did activate on August 1, 2017, the community remains in debate as the hard fork to the larger block size on approximately November 18th grows closers. Even though a number of miners and business have backed out of the agreement, Segwit2x advocates argue that because they still have a majority of miners supporting this proposal that they have consensus to move forward. Since the governance model of Bitcoin does not function in this manner, there remains significant opposition to this hard fork. Should it occur, there will be split in the chain at block height 494,784 and a new coin will be created.

“What do I need to do?”

If you hold Bitcoin at the point of the hardfork, you will have coins on both chains. You are advised to hold your Bitcoin in a hardware wallet or any wallet where you hold your private keys and you will be able to split your coins like in the recent “Bitcoin Cash” hard fork. The largest exchanges, notably “Bitfinex” has stated that they will list the new Segwit2x coin as “B2X”. Many other popular exchanges and services , such as LocalBitcoins, that were not party to the agreement have indicated they will either not support Segwit2x at all or list it as an altcoin.

Segwit2x has been developed under the false premise that it will be the only chain and be known as Bitcoin. Therefore, it lacks sensible replay-protection seen in previous hard-forks that have intentionally created altcoins.

Despite pleas from the most notable Bitcoin Core developers to include replay-protection, and protect users from having their transactions unwillingly broadcasted on both chains, the Segwit2x camp has refused in an attempt to force people to follow them. The result is many simple wallets, known as “SPV” wallets and very commonly found on your phone, will be very confused as to which chain is Bitcoin.

It is recommended you do not keep your bitcoin on “breadwallet” or any other wallet that has not made it explicitly clear how it will handle the fork. It will not be safe to do any transactions for some time after the hard-fork occurs, so you should not attempt any until it’s widely reported from reputable sources that it is safe again.

Final Thoughts

While on the surface this debate can be viewed as how to scale Bitcoin, the underlying motivations of Segwit2x are much different.

Even signers of the agreement admit it is a concerted effort to get rid of the current decentralized development process in Bitcoin. Greater than that, it is an attempt by a small collection of individuals of power to change the governance model of Bitcoin and let big businesses and miners control the protocol instead of the users. Unfortunately for them, futures markets are valuing the new Segwit2x coin at very little compared to the traditional Bitcoin. At the time of this writing, it sits at 0.145 BTC but has fallen as low as 0.105 BTC in recent days.

While most miners may presently be signaling their intention to support Segwit2x, they ultimately cannot afford to do anything but follow what is the most profitable coin. While most of the community hopes the hard fork will be called off before November 18th, it is unlikely the new chain receives much support for too long regardless.

Bitcoin is valuable because it is the largest decentralized financial network that has ever existed. It is a bootstrapped peer-to-peer electronic cash system with no trusted third parties, where users always have the ability to verify the network and their money for themselves. While many may view Bitcoin’s inability to make big changes amidst a community in fierce debate and disagreement as a bug, it is a feature that this system cannot be changed without widespread consensus and your money always sits solely in your control.

This post was originally published at CoinCentral.com by Jason Les.

Originally published at coincentral.com.

What is SegWit2x? Here’s What You Need to Know.

The origins of Segwit2x go back many years now as the Bitcoin community has long debated how to scale Bitcoin to meet the increasing volume of transactions on the network.

One camp, primarily comprised of the big miners, has argued for increasing the size of the blocks in the Bitcoin blockchain from 1 MB to a much larger size. Blocks are mined every ten minutes and contain all the recent transactions.

The bigger the block size, the more transactions the network can process per block. Doing this would require a “hard fork”, a backwards incompatible protocol change, which would result in splitting the chain into two coins.

The other camp has argued that since this idea does not have widespread consensus, contentiously splitting the chain would not be safe and presented a serious moral hazard. Increasing the block size too large centralizes the network and makes it impossible for most users to run their own nodes.

To answer scaling, this camp developed a “soft fork”, a voluntary and backwards compatible protocol upgrade, titled “Segregated Witness” or “Segwit”. Segwit introduced a major bug fix for transaction malleability and unlocked a variety of new features. Notably, a new transaction type which used much less data so more transactions could fit in a single 1 MB block. This effectively turned a1 MB block into a block theoretically as large as 4 MB. In addition, Segwit better paved the way for the upcoming “Lighting Network”, which creates ultra cheap and instant payments on the Bitcoin network.

Segwit was deployed on the network set to activate once 95% of mining hashpower signaled it was ready. Despite Segwit being entirely voluntary and opt-in, this readiness signal was provided by developers as a courtesy so all miners would be ready to process the new transactions and would not inadvertently miss out on any mining revenue.

Since the big block camp was primarily comprised of the largest mining pools, they instead used this readiness signal as a veto and therefore blocked the activation of Segwit as they argued for their solution instead.

Bitmain, leading Chinese mining operation and Segwit2x signatory

This left the Bitcoin community at an impasse for some time as the debate raged on. Solutions for a hard fork to a bigger block size were presented but never received significant consensus outside of the miners who developed them and their supporters.

Finally in May 2017, the lead miners met with a group of big Bitcoin businesses in a private meeting and crafted the “New York Agreement” to activate what they called “Segwit2x”. Their idea was that with a majority of miners and enough large businesses in support of this proposal that the rest of the community would fall in line with them and this new chain would be “Bitcoin” without contention.

Segwit2x called for the activation of Segwit in August to be followed up by a hardfork to a 2 MB base block size. Since Segwit was an effective block size increase itself, this was essentially increasing the block size to 8 MB. The top developers from the open source Bitcoin development process known as “Bitcoin Core” warned that Segwit2x presented a variety of grave risks to the network. Namely, the increase in the centralization of miners and depraving users of the ability to run their own full nodes. In addition, they warned a rushed hard fork like this violated the most minimal of responsible engineering practices. Citing the lack of significant specification and time for testing, as well as the introduction of new attack vectors.

So while Segwit did activate on August 1, 2017, the community remains in debate as the hard fork to the larger block size on approximately November 18th grows closers. Even though a number of miners and business have backed out of the agreement, Segwit2x advocates argue that because they still have a majority of miners supporting this proposal that they have consensus to move forward. Since the governance model of Bitcoin does not function in this manner, there remains significant opposition to this hard fork. Should it occur, there will be split in the chain at block height 494,784 and a new coin will be created.

“What do I need to do?”

If you hold Bitcoin at the point of the hardfork, you will have coins on both chains. You are advised to hold your Bitcoin in a hardware wallet or any wallet where you hold your private keys and you will be able to split your coins like in the recent “Bitcoin Cash” hard fork. The largest exchanges, notably “Bitfinex” has stated that they will list the new Segwit2x coin as “B2X”. Many other popular exchanges and services , such as LocalBitcoins, that were not party to the agreement have indicated they will either not support Segwit2x at all or list it as an altcoin.

Segwit2x has been developed under the false premise that it will be the only chain and be known as Bitcoin. Therefore, it lacks sensible replay-protection seen in previous hard-forks that have intentionally created altcoins.

Despite pleas from the most notable Bitcoin Core developers to include replay-protection, and protect users from having their transactions unwillingly broadcasted on both chains, the Segwit2x camp has refused in an attempt to force people to follow them. The result is many simple wallets, known as “SPV” wallets and very commonly found on your phone, will be very confused as to which chain is Bitcoin.

It is recommended you do not keep your bitcoin on “breadwallet” or any other wallet that has not made it explicitly clear how it will handle the fork. It will not be safe to do any transactions for some time after the hard-fork occurs, so you should not attempt any until it’s widely reported from reputable sources that it is safe again.

Final Thoughts

While on the surface this debate can be viewed as how to scale Bitcoin, the underlying motivations of Segwit2x are much different.

Even signers of the agreement admit it is a concerted effort to get rid of the current decentralized development process in Bitcoin. Greater than that, it is an attempt by a small collection of individuals of power to change the governance model of Bitcoin and let big businesses and miners control the protocol instead of the users. Unfortunately for them, futures markets are valuing the new Segwit2x coin at very little compared to the traditional Bitcoin. At the time of this writing, it sits at 0.145 BTC but has fallen as low as 0.105 BTC in recent days.

While most miners may presently be signaling their intention to support Segwit2x, they ultimately cannot afford to do anything but follow what is the most profitable coin. While most of the community hopes the hard fork will be called off before November 18th, it is unlikely the new chain receives much support for too long regardless.

Bitcoin is valuable because it is the largest decentralized financial network that has ever existed. It is a bootstrapped peer-to-peer electronic cash system with no trusted third parties, where users always have the ability to verify the network and their money for themselves. While many may view Bitcoin’s inability to make big changes amidst a community in fierce debate and disagreement as a bug, it is a feature that this system cannot be changed without widespread consensus and your money always sits solely in your control.

This post was originally published at CoinCentral.com by Jason Les.

Originally published at coincentral.com.

What are the Main Drivers Behind Positive Bitcoin Cash Movement?

#BitcoinCash

Bitcoin Cash (BCH aka BCC) has been the focus of discussion for many cryptocurrency experts and there are valid reasons for such inquiry. Bitcoin Cash is experiencing significant growth and moving in the right direction right from the time main Bitcoin blockchain forked. Let us go through details of how it is performing and also check the reasons which are fueling such positive movement.

Rising Bitcoin Cash Prices

Yesterday, there has been over 18% improvement in exchange rate (BCH/USD) from the low to the high, helping Bitcoin Cash attain $550.00 level with a network cap of about $9.1 billion. As such, it has reached the top 3rd position of cryptocurrencies by their network cap.

What is causing such price rise for Bitcoin Cash?

There are several reasons for such price rise, let us look at them here:

· Most important reason is that there has been a surge in trading volume taking place on Korean exchanges. In addition to it, the main 3 trading pairs for BCH are with Korean Won plus trading volume for BCH/KRW is nearly $1.5 billion.

· Another important factor fueling price rise of Bitcoin Cash is the anticipation that network difficulty will go down further and make mining Bitcoin Cash profitable.

· Lastly, some people are expecting another split for Bitcoin taking place in near future, which will improve Bitcoin Cash’s position.

What are the reasons behind positive movement in Bitcoin Cash?

Let us examine few of the main reasons behind such positive movement.

· Acceptance by Digital Currency Exchanges: Bitcoin Cash is expected to gain higher popularity as well as experience improvement in trading volumes due to the fact that many digital currency exchanges have started embracing this new cryptocurrency.

One good example is Yapizon which is a South Korean exchange that has started trading Bitcoin cash (BCH) tokens. On similar lines, other virtual currency exchanges in South Korea (such as Coinone and Bithumb) have announced that they will be adopting this cryptocurrency in the coming days.

· Support Announced by Swiss Private Bank: Likewise, support for Bitcoin Cash announced by a Swiss private bank (Falcon Private Bank) is also going to further improve trading volume.

This support will mean that bank’s customers will now be able to use the functionality and buy, sell as well as hold Bitcoin Cash. More importantly, it will highlight the fact that the financial sector has started viewing cryptocurrency as legitimate store of value and peer to peer cash.

· Inclusion into Bitcoin IRA: Another positive news for Bitcoin Cash is that it has been included into Bitcoin IRA, which is a US firm that lets US citizens access cryptocurrency in any retirement account that has been approved by the IRS. Users hold funds in Bitcoin IRA until retirement.

· Support Announced by Bitstamp: On similar lines, the decision by Bitstamp (European Bitcoin exchange) to add support for Bitcoin Cash will also help in improving its position. According to the announcement by Bitstamp, BCH will be receiving three trading pairs which would be BCH/USD, BCH/BTC and BCH/EUR.

· Bitcoin Cash better follows Satoshi Nakamoto’s original whitepaper: Read the whitepaper here.

· Transaction costs are lower for Bitcoin Cash: Transaction costs are higher for Bitcoin Segwit and Litecoin.

· @WintonARK states: The Chinese government prefers Bitcoin Cash to Bitcoin. One would postulate that more Chinese will be buying Bitcoin Cash as a result.

Mining of 8MB Bitcoin Cash Blocks

For some time the Bitcoin Cash blocks had been smaller in comparison to Bitcoin blockchain. However, that recently changed with mining of 8MB Bitcoin Cash block by BitClub network.

It is certainly great news for Bitcoin Cash supporters and works as a valid justification for the split that occurred from the Bitcoin blockchain. Additionally, the network cap of Bitcoin Cash is over $8 billion and may move up even further in the next few weeks. Likewise, trading volume is also rising for Bitcoin Cash and is presently at about $1 billion and has been on the rise.

Development teams working on Bitcoin Cash have said someday Bitcoin Cash blocks may be 1GB or larger to accommodate scaling.

Moreover, analysts are expecting network difficulty will move down even further in the coming days, making Bitcoin Cash more profitable to mine. At present, difficulty of Bitcoin Cash is up 1.93% in the past 24 hours.

All these developments are positive aspects for Bitcoin Cash and clearly highlight the fact that BCH is moving in the right direction as well as experiencing good growth.

A New API

Another promising news item for Bitcoin Cash is that an API is presently being implemented for all major web browsers which will allow users to use cryptocurrency for purchasing goods and services. Moreover, this API will facilitate storage of payment information directly within the browser.

This is certainly a positive move signifying greater recognition of Bitcoin Cash and other cryptocurrencies as payment technologies.

As we can see, Bitcoin Cash is certainly experiencing positive movement and expected to expand even further in the near future. One can expect some smaller tokens and coins to have their value stripped out and added to Bitcoin Cash over time due to its superior properties. On a high note, Roger Ver has been quoted as saying Bitcoin Cash is for everyone in the world to use.

*The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice. Your investment could go to zero. This is a long term holding.

Disclosure: I own some Bitcoin Cash. Please follow me on Twitter.

Ledger releases Segregated Witness support

Segwit, the long awaited pack of optimizations to scale Bitcoin has been activated on August 24th. This article explains how can you use Segwit benefits with Ledger’s hardware wallet products.

Migrating to a Segwit address

In order to use Segwit optimizations, you’ll need to use funds stored on a Segwit address which uses a different format — currently encoded as a multisigature (P2SH) address (starting with a 3 on Bitcoin mainnet)

You can access your new Segwit addresses or legacy addresses (where you will find your current funds) when starting the Bitcoin Wallet Chrome application (from v1.9.0). As Segwit migration is fully opt-in, you can continue to use only legacy addresses.

If you wish to upgrade, you can recreate the same account naming and structure on the Segwit branch, and move your funds from the legacy branch using Bitcoin transactions.

As upgrading to Segwit addresses helps providing more block capacity for every user, it’s definitely recommended to upgrade.

Note that the sender doesn’t need to upgrade — every wallet can natively send funds to a Segwit address.

Segwit addresses are available for Ledger Nano S with no firmware update and Ledger HW.1/Nano with a firmware update to version 1.0.3 required

Choosing the address type on Ledger Bitcoin Wallet

If you do not wish to use Segwit, or if you are not sure about anything, just click on the LEGACY button and you’ll access and manage your accounts as it was before.

Signature time optimization

When computing a Segwit signature, the previous transactions do not need to be processed by the device, and each input is only processed once during the signature process, leading up to a 60% time optimization in the signature process.

Using a Segwit address is definitely recommended if you plan to collect small transactions such as mining rewards

For more information, you can refer to our original article on the subject and this Bitcoin Magazine article.

Lower transaction fees

Segwit introduces the concept of block weight which changes the way the transaction size is computed by splitting the signatures in a different area — you can typically save 35% of the fee paid when sending a transaction immediately

For more information, you can refer to this article on the subject.

Future scaling optimizations

Segwit paves the way to multiple Bitcoin scripting optimization (through anti malleability and script versioning) — we’re closely monitoring progress on those different topics to let you use your Ledger Hardware Wallet with those innovations (such as the Lightning Network) as soon as possible.

Segregated Witness and third party wallets

Segwit support for Ledger products is available in GreenAddress (desktop, Android) and GreenBits (Android).

Segregated Witness and other networks

Segwit support is also available for Litecoin.

Word of caution to Bitcoin Cash users : NEVER send Bitcoin Cash to a Segwit address generated on the Bitcoin network — you wouldn’t be able to recover your coins.


Ledger releases Segregated Witness support was originally published in Ledger on Medium, where people are continuing the conversation by highlighting and responding to this story.

Ledger releases Segregated Witness support

Segwit, the long awaited pack of optimizations to scale Bitcoin has been activated on August 24th. This article explains how can you use Segwit benefits with Ledger’s hardware wallet products.

Migrating to a Segwit address

In order to use Segwit optimizations, you’ll need to use funds stored on a Segwit address which uses a different format — currently encoded as a multisigature (P2SH) address (starting with a 3 on Bitcoin mainnet)

You can access your new Segwit addresses or legacy addresses (where you will find your current funds) when starting the Bitcoin Wallet Chrome application (from v1.9.0). As Segwit migration is fully opt-in, you can continue to use only legacy addresses.

If you wish to upgrade, you can recreate the same account naming and structure on the Segwit branch, and move your funds from the legacy branch using Bitcoin transactions.

As upgrading to Segwit addresses helps providing more block capacity for every user, it’s definitely recommended to upgrade.

Note that the sender doesn’t need to upgrade — every wallet can natively send funds to a Segwit address.

Segwit addresses are available for Ledger Nano S with no firmware update and Ledger HW.1/Nano with a firmware update to version 1.0.3 required

Choosing the address type on Ledger Bitcoin Wallet

If you do not wish to use Segwit, or if you are not sure about anything, just click on the LEGACY button and you’ll access and manage your accounts as it was before.

Signature time optimization

When computing a Segwit signature, the previous transactions do not need to be processed by the device, and each input is only processed once during the signature process, leading up to a 60% time optimization in the signature process.

Using a Segwit address is definitely recommended if you plan to collect small transactions such as mining rewards

For more information, you can refer to our original article on the subject and this Bitcoin Magazine article.

Lower transaction fees

Segwit introduces the concept of block weight which changes the way the transaction size is computed by splitting the signatures in a different area — you can typically save 35% of the fee paid when sending a transaction immediately

For more information, you can refer to this article on the subject.

Future scaling optimizations

Segwit paves the way to multiple Bitcoin scripting optimization (through anti malleability and script versioning) — we’re closely monitoring progress on those different topics to let you use your Ledger Hardware Wallet with those innovations (such as the Lightning Network) as soon as possible.

Segregated Witness and third party wallets

Segwit support for Ledger products is available in GreenAddress (desktop, Android) and GreenBits (Android).

Segregated Witness and other networks

Segwit support is also available for Litecoin.

Word of caution to Bitcoin Cash users : NEVER send Bitcoin Cash to a Segwit address generated on the Bitcoin network — you wouldn’t be able to recover your coins.

Market Summary for 24 August 2017

  • LTC/USD (+14.8%) was in spotlight, therefore CM3 (+2.3%) and CM10 (+1.1%) rose up
  • BTC SegWit activates today, possible interactions between BTC and LTC blockchain via Lightning Network has triggered excitements
  • Koreans were buying ETC (+6.0%) today

Today Litecoin was in spotlight, therefore CM3 and CM10 rose up by 2.3% and 1.1%.

LTC/USD has surged 14.8%, followed by ETC/USD with 6.0%. However, other coins were fluctuating between -2% to 1%, slowly pulling down the market.

With Bitcoin SegWit activating today, the possibility of transferring between Bitcoin and Litecoin blockchain via the Lightning network has triggered a lot of excitement. Meanwhile, Koreans began to buy Ethereum Classic today, causing a rise in price.

Want to diversify your cryptocurrency portfolio? Visit our website to learn more!


Market Summary for 24 August 2017 was originally published in Cryptomover on Medium, where people are continuing the conversation by highlighting and responding to this story.

Very interesting point, I have been watching the bitcoin cash profitability chart on coin.dance

Very interesting point, I have been watching the bitcoin cash profitability chart on coin.dance regularly and it never really occurred to me just how deadly a switch could be for segwit bitcoin, in the last month it has fluctuated between 10% and 80%. Another interesting thing to observe is the size of the unknown bitcoin cash miners pool that is growing daily, its well over 80% now and makes me wonder why they are remaining unknown and what is up their collective sleeve? Also with core dev being so against hard forks and pro high fees I can easily imagine a situation where bitcoin transaction wait times approach infinity and the backlog builds to billions of dollars while they sit back and watch it burn.

The Economics of Bitcoin Block Size

Bitcoin as a currency has proven its worth in last 8 years. It has the properties of ease of transfer, fungibility, divisibility, scarcity, and durability -which are missing in traditional fiat currencies as well as gold. However, it faces constant challenges from traditional payment systems, primarily regarding the maximum throughput of transactions per second (currently ranging from 3–7 transactions/sec as compared to Visa which averages 2000 transactions/sec).

The year 2017 can be considered as the year of forks which aim at increasing the throughput of Bitcoin Blockchain network in a sustainable way. The approach followed by these forks is to increase the block size so that more transactions can be included in each block, thus increasing the throughput.

Figure 1

Let’s look at basics of economics to explain the nuisance behind the block size.

Law of Demand and Supply

Figure 2

Figure 2 shows the basic supply-demand graph. On the vertical axis is the price of a product per unit and on the horizontal axis is the quantity per period. The blue and orange lines simultaneously show supply and demand. The point of intersection of these two lines gives the equilibrium point.

The orange shaded region in the graph is consumer surplus which is derived whenever the price paid by the consumer is actually less than what the consumer was willing to pay.
The blue shaded region in the graph is producer surplus which is the additional private benefit to producers, in term of profit, gained when the price they receive in the market is more than the minimum price they would be prepared to sell for.

The Bitcoin Market

Bitcoin ecosystem has two types of markets in play:
1. Bitcoin as a currency/commodity, where people trade bitcoins for various personal requirements.
2. Transactional confirmation from Miners: Participants of Bitcoin Blockchain pay miners a fee to validate their transactions and add them to blockchain.

These two markets are complimentary in nature as the exchange of Bitcoin in market 1 is complemented by validation of those transactions in market 2.
We have a quota in market 2 in the form of block size limit of 1 MB. Although it can be argued that market 1 does have a quota (the theoretical limit of 21 million bitcoins), this limit is not relevant while considering the means by which Bitcoin transactions take place. For example, if party A wants to buy $1 million worth of bitcoin, the only quota in play is whether a party B exists who will sell an equivalent value of bitcoin at a mutually agreeable price, nothing else.

Let’s now take a fresh look at our demand supply graph with respect to market 2.

Figure 3

On the horizontal axis, quantity could be assumed as the number of transactions that can be cleared. On the vertical axis is the miner’s fee in Bitcoins. The orange demand line is the number of transactions that market participants want to clear and blue supply line is hash power supplied by miners to clear the transactions.

The red vertical line denotes the quota of 1 MB block size. Since the inception of bitcoin, the quota line has always been firmly to the right of the equilibrium point. This means there was never enough demand to fill up the blocks so the quota actually didn’t matter economically. But once the quota goes to the left of the equilibrium point (the current scenario), things begin to change. The red area in figure 3 is called the dead weight loss. It represents transactions that would have been valuable to both the miners as well as traders but cannot be executed because of the block size quota. This is the economical value which is lost forever.

Also, we see a difference between the producer price and consumer price when the quota is applicable. So consumers - in this case the bitcoin traders - end up paying more than what it takes to validate their transactions. This cost to consumers is not necessarily monetary, but the time they spend waiting for their transactions to be validated.

Is there an urgent need to increase block size?

Let’s look at the substitute goods for Bitcoin available in the market. I looked at the correlation of price moment between bitcoin and the other cryptocurrencies in Figure 4 below, and observed a negative correlation between bitcoin and most of the other cryptocurrencies. This means that these cryptocurrencies are a substitute for Bitcoin.

Figure 4

Monero (XMR) is anomalous in that it has a positive correlation with Bitcoin. This could be because these two crypto currencies are tapping different markets with different use cases.

Figure 5

Figure 5 shows a very clear trend of people moving to alternate currencies. This makes a strong case in favour of the quota line moving to the left of the equilibrium point sometime after March 2017, thus making the transactions costly and confirming an urgent need to extend the quota limit.

What Now?

Increasing the block size to a limit that quota line moves to the right of equilibrium point would remove the inefficiencies created due to dead weight loss (Figure 3), thus decreasing the time to verify the transactions.
However, this will decrease the miner’s fees per transaction. To keep the profitability same as earlier, the miner has to increase the number of cleared transactions. This will require the miner to upgrade the hardware required for validating transactions thus making the mining activity profitable for only those players who could afford economies of scale.
This will make the mining activity highly centralized defeating the purpose of a decentralised community driven currency.

Having a constant block size could be a short nearsighted approach to this problem. If Bitcoin takes shape as a dominant international currency, the new block limit will reach sooner or later. A variable block size makes more sense to approach this problem.

Forks are good for a technology as it gives a way to test different approach for a problem. We might see more forks in Bitcoin Blockchain in coming future. Making Bitcoin a scalable and decentralized incentive driven ecosystem is still an ongoing research topic. There are already different communities which are working towards a sustainable approach for the block size problem.
I will be discussing in detail about these implementations in my next post.

The Economics of Bitcoin Block Size

Bitcoin as a currency has proven its worth in last 8 years. It has the properties of ease of transfer, fungibility, divisibility, scarcity, and durability -which are missing in traditional fiat currencies as well as gold. However, it faces constant challenges from traditional payment systems, primarily regarding the maximum throughput of transactions per second (currently ranging from 3–7 transactions/sec as compared to Visa which averages 2000 transactions/sec).

The year 2017 can be considered as the year of forks which aim at increasing the throughput of Bitcoin Blockchain network in a sustainable way. The approach followed by these forks is to increase the block size so that more transactions can be included in each block, thus increasing the throughput.

Figure 1

Let’s look at basics of economics to explain the nuisance behind the block size.

Law of Demand and Supply

Figure 2

Figure 2 shows the basic supply-demand graph. On the vertical axis is the price of a product per unit and on the horizontal axis is the quantity per period. The blue and orange lines simultaneously show supply and demand. The point of intersection of these two lines gives the equilibrium point.

The orange shaded region in the graph is consumer surplus which is derived whenever the price paid by the consumer is actually less than what the consumer was willing to pay.
The blue shaded region in the graph is producer surplus which is the additional private benefit to producers, in term of profit, gained when the price they receive in the market is more than the minimum price they would be prepared to sell for.

The Bitcoin Market

Bitcoin ecosystem has two types of markets in play:
1. Bitcoin as a currency/commodity, where people trade bitcoins for various personal requirements.
2. Transactional confirmation from Miners: Participants of Bitcoin Blockchain pay miners a fee to validate their transactions and add them to blockchain.

These two markets are complimentary in nature as the exchange of Bitcoin in market 1 is complemented by validation of those transactions in market 2.
We have a quota in market 2 in the form of block size limit of 1 MB. Although it can be argued that market 1 does have a quota (the theoretical limit of 21 million bitcoins), this limit is not relevant while considering the means by which Bitcoin transactions take place. For example, if party A wants to buy $1 million worth of bitcoin, the only quota in play is whether a party B exists who will sell an equivalent value of bitcoin at a mutually agreeable price, nothing else.

Let’s now take a fresh look at our demand supply graph with respect to market 2.

Figure 3

On the horizontal axis, quantity could be assumed as the number of transactions that can be cleared. On the vertical axis is the miner’s fee in Bitcoins. The orange demand line is the number of transactions that market participants want to clear and blue supply line is hash power supplied by miners to clear the transactions.

The red vertical line denotes the quota of 1 MB block size. Since the inception of bitcoin, the quota line has always been firmly to the right of the equilibrium point. This means there was never enough demand to fill up the blocks so the quota actually didn’t matter economically. But once the quota goes to the left of the equilibrium point (the current scenario), things begin to change. The red area in figure 3 is called the dead weight loss. It represents transactions that would have been valuable to both the miners as well as traders but cannot be executed because of the block size quota. This is the economical value which is lost forever.

Also, we see a difference between the producer price and consumer price when the quota is applicable. So consumers - in this case the bitcoin traders - end up paying more than what it takes to validate their transactions. This cost to consumers is not necessarily monetary, but the time they spend waiting for their transactions to be validated.

Is there an urgent need to increase block size?

Let’s look at the substitute goods for Bitcoin available in the market. I looked at the correlation of price moment between bitcoin and the other cryptocurrencies in Figure 4 below, and observed a negative correlation between bitcoin and most of the other cryptocurrencies. This means that these cryptocurrencies are a substitute for Bitcoin.

Figure 4

Monero (XMR) is anomalous in that it has a positive correlation with Bitcoin. This could be because these two crypto currencies are tapping different markets with different use cases.

Figure 5

Figure 5 shows a very clear trend of people moving to alternate currencies. This makes a strong case in favour of the quota line moving to the left of the equilibrium point sometime after March 2017, thus making the transactions costly and confirming an urgent need to extend the quota limit.

What Now?

Increasing the block size to a limit that quota line moves to the right of equilibrium point would remove the inefficiencies created due to dead weight loss (Figure 3), thus decreasing the time to verify the transactions.
However, this will decrease the miner’s fees per transaction. To keep the profitability same as earlier, the miner has to increase the number of cleared transactions. This will require the miner to upgrade the hardware required for validating transactions thus making the mining activity profitable for only those players who could afford economies of scale.
This will make the mining activity highly centralized defeating the purpose of a decentralised community driven currency.

Having a constant block size could be a short nearsighted approach to this problem. If Bitcoin takes shape as a dominant international currency, the new block limit will reach sooner or later. A variable block size makes more sense to approach this problem.

Forks are good for a technology as it gives a way to test different approach for a problem. We might see more forks in Bitcoin Blockchain in coming future. Making Bitcoin a scalable and decentralized incentive driven ecosystem is still an ongoing research topic. There are already different communities which are working towards a sustainable approach for the block size problem.
I will be discussing in detail about these implementations in my next post.

This week in Cryptocurrencies — August 1st, 2017

A weekly round-up of the most important Bitcoin, Ethereum & altcoin news, stories and articles.

Whether you’re trading cryptocurrencies daily, keeping some Bitcoins for long term profits or just looking at getting into the market, we’re building a trading platform exactly for you.
Head to
https://www.geometrum.io to sign up for an early access.


This week in Cryptocurrencies — August 1st, 2017 was originally published in Coin Street on Medium, where people are continuing the conversation by highlighting and responding to this story.

Here is youtube about Luke Dashjr, a core developer of Bitcoin.

On the 24th of July, I met Luke Dashjr, a core developer of Bitcoin. In his old Twitter profile photo, his UASF hat was covering his face to the point that you couldn’t even see his expression. It looked very mysterious, so I was curious and a bit nervous to find out what kind of person he was, but when he started talking about wanting to enjoy the latte art, and how he’d started playing Pokemon Go, I was relieved to see he was a regular person just like me!!!

Even though he said he wasn’t good with video interviews, he agreed to do it anyway, so thanks Luke!!

I’ll put Japanese subtitles on the video at a later date. The interview with Samson Mow and Jihan Wu has only been released on Twitter, but it’s a few weeks old by now, so I don’t think there’ll be any problem with you seeing it, so I decided to upload it to Youtube. I’ll let you know when an update comes out, so please subscribe to my Youtube channel (^^)🎶

How we are preparing for the upcoming bitcoin upgrade

On 1 August 2017, the bitcoin network will be undergoing a contentious upgrade. If you want to learn more about his upgrade, we have a blog post that explains it in better detail here: http://www.techzim.co.zw/2017/07/everything-wanted-know-contentious-bitcoin-upgrade-afraid-ask/

We think that this upgrade will likely result in at least two different forks of Bitcoin and because it’s hard to tell how this event is going to play out, we shall be temporarily suspending all bitcoin related transactions on 1 August 2017. This temporary suspension is just so that we are able protect your funds against losses through things such wipeout or replay attacks. We will resume normal operations as soon as the dust settles and we are certain that everything is safe.

If you have have any bitcoin in your BitcoinFundi account at the time of the upgrade, and there is a fork, we shall make sure that you funds are available, not just on the fork that emerges as the winner but any other minority forks that may result.

If you are a bitcoin holder (whether through us or not), the best way to protect your bitcoin during this time is to not send or move your bitcoin.

In preparation for this Bitcoin network event, we have made some updates to BitcoinFundi so they next time you log into your BitcoinFundi account, you will notice that

  • Your bitcoin address has changed. If you are going to make any bitcoin deposits, make sure you send them to your new bitcoin address (sending it to the old address will result in your deposits taking longer because we’ll have to manually move them to your new wallet).
  • We have increased the number of confirmations required for BTC deposits from 1 to 7. This means that your bitcoin deposits will take longer to go through. We shall reduce the number of confirmations required for your deposit to go through after the upgrade.
  • We’ve fixed the bug that required you for first refresh your page when you were making a BTC withdrawal — a lot of you are going to be happy about that fix.
  • We now provide better notifications when you make deposits/withdrawals.
  • We’ve made a few other bug fixes and improvements so BitcoinFundi should work better and faster than it did when you last logged in.

We are monitoring the situation as it unfolds very closely and the best way to stay up-to-date with updates regarding this upgrade will be via our Twitter account: https://twitter.com/BitcoinFundi.

If you need help with anything, the fastest way to get help is by sending an email to support@bitfinance.co.zw.


How we are preparing for the upcoming bitcoin upgrade was originally published in BitFinance on Medium, where people are continuing the conversation by highlighting and responding to this story.

All about SegWit…

For a while now the talk in the Bitcoin circle has been about SegWit. You will come across a lot of information about what SegWit is, on the internet. The following article is essentially ‘SegWit for dummies’. We suggest you pick one of those extremely technical pieces on ‘SegWit’, put this one next to it and you should be able to better understand what the noise is all about.

So, here goes.

Imagine a new road being laid out in your city. This road comes with a lot of promise- those that use the road to commute will get to travel across the city faster than on any other road while the ones that build restaurants and shops on either side of the road stand to get customers and hence, business.

The road is the Blockchain, the commuters are transactions/bitcoin holdersand the business owners are the miners/startups.

As time passes this road gets way too popular and results in long traffic blockages. These traffic blockages now result in increased commute time for the commuters and also in increased fuel usage.

In other words as and when the Bitcoin popularity has increased, due to the limited nature of how many transactions can happen within a certain amount of time the time taken for transactions to go through has increased and so has the fee to make these transactions

To combat this growing issue, the business owners come up with possible solutions. Some of them propose that a flyover should be constructed over the road so that those vehicles that aren’t necessary for the businesses to run can be diverted to go over the flyover while only those that are needed for the businesses and those that need the businesses can use the road below the flyover.

This process is called ‘Segregated Witness’ or ‘SegWit’ in short. Since the size of individual blocks are limited to 1MB, there is only a certain number of transactions that can take place. Hence, one of the proposals is to separate some of the data from the transaction details and record it on a separate block while the information vital for the transaction to go through is recorded on the main block. The signatures that act as the witnesses to the transactions take up about 60% of the space and aren’t vital for recording the transactions. They use up space that could otherwise be used to include more number of transactions and hence, won’t be included in the mined block.

The business owners are divided over this proposal of a flyover. The ones that own shopping malls that have parking space and other amenities do not want the flyover because they believe that the community is not prepared to take such a step. There is yet another set that says they will open up the backdoor to their businesses and construct another road parallel to the one that exists now. The ones with smaller establishments are in a spot of bother as they are not sure which proposal to support and hence, there is a lot of uncertainty.

The fear now is that there maybe a situation where there is the original road, the flyover and the new road. This will result in the commuters getting split across the 3 ways and then, there might be some commuters that may completely avoid any of these 3 roads altogether. There are deadlines for each of these activities to start. With each of these groups capable of getting their say, unless a consensus is reached the division is inevitable.

BIP- 91/SegWit2x, BIP- 148, Bitcoin ABC are all the possible ways the bitcoin community could go. There is a lot of ambiguity and technical voodoo involved in understanding these proposals. Click on any of the above proposals to know more about them.

The best thing to do would be to avoid that road altogether till a consensus has been reached. Who knows, you might end up falling off of a half constructed flyover.

Do not do any kind of Bitcoin transactions between the 31st of July and 2nd of August, 2017. The issue may get resolved earlier than that, but it’s better to be safe than sorry. Also, if you hold any Bitcoin on any of the exchanges, please follow the directives of those exchanges regarding transactions.

Below is a slightly more technical explanation of ‘SegWit’. Read it. Personally, for me, it is a little too technical. You might be a weirdo that understands it.

Where do you think it’s going?
July 29th: This happens to be vital date by which BIP-91, most popularly incorporated by SegWit2x, has to gain 80% support in at least 336 continuous blocks. If it does manage to do so, then SegWit will come into force and will be activated in the next 2 weeks
August 1st: BIP-148 will kick in, but will do nothing as BIP-91 has already been accepted
November 18th: 2MB hard fork is scheduled, needs to get 100% support, or else Bitcoin will split.

OR

July 29th: If BIP-91 fails to get 80% support by this date, then there will be a period of status quo till August 1st
August 1st: BIP 148 kicks in and needs to get 50% support. If it manages to get 50% support, then UASF/SegWit will kick in. If not Bitcoin will split. The possible parties on either side of the split are the ‘old’ Bitcoin and Bitcoin ‘ABC’.
August 4th: Bitcoin ABC kicks in
August 14th: New Proof of Work rules will render Bitcoin ABC incompatible with the ‘old’ Bitcoin protocol.
ThroughBit believes in continuous improvements and in robust systems. BIP-91 enabled SegWit is what we think is the best way forward for Bitcoin.

All about SegWit… was originally published in ThroughBit on Medium, where people are continuing the conversation by highlighting and responding to this story.

A-Z Guide On Upcoming Fork ‘ BITCOIN COMMUNITY’

There’s a considerable measure of complain in the bitcoin community about what will occur on August 1. Will the cryptographic money split into two new ones? Will it not? What is BIP 91? What is BIP 148? What is SegWit?

The unimaginably noteworthy date is practically around the bend yet there are still such a large number of unanswered inquiries!

I have assembled this manual for walk you through the entire circumstance to keep you educated about the advancements. As of this thinking of, it appears like, bitcoin will keep away from the chain split — for the time being. Notwithstanding, despite the fact that it appears like the restricting gatherings have achieved a joint determination, there’s still a considerable measure that requirements to happen to deflect the split.

To comprehend what’s really event and why the bitcoin group has part into two, it’s best to investigate one of the basic issues of cryptographic money — or to be more correct — how individuals differ about how to settle that issue.

On one side, there are the general population who deal with the publicly released programming for bitcoin. They resemble the association/group that keeps the advancement on the bitcoin convention running. On the opposite side are the mineworkers, who convey PCs to run the bitcoin organize (blockchain). The two sides are pivotal to keep the bitcoin running — one side can’t do it without the other. Furthermore, to completely comprehend the issue, you have to comprehend the mechanics of bitcoin, and that is the reason I’ve endeavored to clarify the total manage bitcoin chain split in this guide.

What is the issue with bitcoin?

A great many people consider bitcoin an advanced money that you can use to purchase and offer things on the web. That is actually right, yet that is not bitcoin’s genuine esteem.

Bitcoins aren’t generally attainable for ordinary exchanges, and we’re no place close having the capacity to stroll into a Starbucks and pay for our espresso in bitcoins. However, why would that be? Wouldn’t bode well for the producers of bitcoin to execute it as a genuine contrasting option to other cash, and in this manner increment the estimation of bitcoin?

All things considered, the reason that hasn’t happened is that the bitcoin blockchain is moderate and costly. It’s no place near meeting the guidelines for installment innovation as the bitcoin system can process up to six exchanges for every second, while the VISA system can process more than 1600 exchanges for every second.

The main way the overall population will receive to the decentralized system is whether it will be as quick and helpful as existing installment systems. Unless that happens, bitcoin will be utilized generally as an instrument to store esteem.

Why is the system so moderate?

Bitcoin’s system is based over a blockchain. On the off chance that you haven’t yet perused a definitive manual for understanding blockchain, consider blockchain an enlist containing a few pages (pieces) where each page contains a few exchanges. When a page has been loaded with exchanges, it should be added to the enlist before beginning to record exchanges on the following page.

Prior to a page (square) can be added to the enlist (chain), some preparing should be done to guarantee that everybody concurs with the substance it contains. The procedure around takes 10 minutes for each square.

Envision, you are sending 1 BTC to your companion, Joe. The exchange will look something like this.

In addition to other things, an exchange contains data about the sender, the beneficiary, the sum and the exchange charge.

Hold up a moment, exchange expense? Yes, there’s an extra charge that you can pay to boost diggers to incorporate your exchange in a piece as quickly as time permits. There’s no set cost and it’s completely up to you the amount you will pay to accelerate the procedure.

At any given minute, there are a few exchanges accessible to be recorded on the present page. On the off chance that you search for number of unverified (pending) exchanges whenever as the day progressed, the number will dependably be near ten thousand. That is the point at which the 99 percent of the world is yet to come to cryptographic forms of money. The number at that point can without much of a stretch be north of a few millions.

The excavators (PCs working in the blockchain arrange) need to choose which of the accessible exchanges to incorporate into the present piece. To enable them to choose, they take a gander at which exchanges yield the most rewards — implying that the exchanges with the most elevated exchange charge will be incorporated first.

In the event that there are sufficient exchanges with higher exchange expense than yours to top off the piece, your exchange should hold up in line. The hold up can last from a couple of minutes to a couple of hours. What’s more, once in a while, even days. The more you pay in exchange expense, the speedier your exchange is handled.

For the clients, utilizing Bitcoin has turned out to be moderate and costly. Not precisely what the ‘cash of the web’ ought to resemble.

Be that as it may, this has provoked savvy individuals to pose a critical inquiry: “How might we scale the limit of the bitcoin blockchain?”

The interesting thing is that there were excessively numerous brilliant individuals posing that inquiry. The general population who are running Bitcoin (the general population who are keeping up the publicly released code that keeps running on individuals’ PCs) have confidence in one arrangement, while the mineworkers (the general population who run the code all alone PCs) put stock in another.

The arrangement proposed by the general population running Bitcoin favors the clients, while the arrangement proposed by the excavators favors themselves (what an amazement!). It’s this contradiction that is directed to the disarray around August 1 and the potential split of the Bitcoin blockchain. We’ll return on this point later in the post; we should comprehend the arrangements first.

The arrangement that supports the clients

What the general population running Bitcoin thought of started by they way we store an exchange in a square. The arrangement was initially to expel the pliability of squares, however it had a positive reaction: it expanded the limit of the blockchain as well. To comprehend it better, we’ll have to see what pieces look like.

The arrangement is known by a few names on the web, for example, SegWit, BIP 148 and UASF (User Activated Soft Fork).

What does a piece resemble?

In the most straightforward view, a piece in the chain has two sorts of information in it — header and exchanges.

Header contains meta information of the piece, yet that is not important to the August 1 fork. The header is modest and just takes up about a percent of the square’s information. The other 99 percent of the piece’s information is comprised of exchanges that are incorporated into the square.

In the event that we burrow further to perceive what makes up a solitary exchange, we’ll see that other than the conspicuous things — like sender, beneficiaries, sum and exchange expense — it likewise contains something many refer to as a “Mark” or ‘Witness’. The Signature confirms that the sender has enough adjust to send the said measure of bitcoins in the exchanges. This specific information is just utilized once toward the start, however it makes up right around 65 percent of the information in an exchange.

The aggregate permitted size of a square is 1 MB, and the greater part of it is loaded with information that isn’t basic to the piece. The thought is to move the Signature/Witness information towards the finish of the piece in a different structure.

This different structure isn’t required to be incorporated into the blockchain. In the event that a hub (individual taking an interest PC in the system) can, it’s extraordinary. On the off chance that it can’t, no major ordeal. Due to this property, it is known as a Soft Fork.

A few hubs will refresh their product and start dealing with the new piece structure, while the hubs that choose to remain on the inheritance programming will basically overlook the Witness divide. This advancement in the structure enables more exchanges to be incorporated into a piece.

This arrangement is in fact called SegWit due to Segregating (isolating) Witness from the square structure. Also, it supports the clients.

How does SegWit support the clients?

The new structure can hold significantly a larger number of exchanges than the present structure can. It makes the opposition among unverified exchanges be incorporated into the square goes down. What’s more, with it, the exchange charge goes down. Exchange charges are a piece of the reward that the mineworkers get. With bring down expense, the reward for mining the piece will go down as well. Not only that, this new structure likewise something that is called Lightning Network that permits smaller scale installments (you paying for espresso at Starbucks) to be handled immediately with no expense.

The main contention against this arrangement is that it’s an impermanent fix and that a ‘Hard Fork’ will in the long run be actualized not far off. Also, the Hard Fork is the mineworkers’ suggestion.

The solution that favors the miners

The mineworkers propose an answer that will scale the system for a more drawn out term. Their suggestion is to execute SegWit (Soft Fork) like the clients propose, and notwithstanding that, they likewise need to expand the span of the square from current 1MB to 2MB. Therefore, the name — SegWit 2x.

Other than being known as SegWit 2x, the excavators’ answer is likewise called MASF (Miner Activated Soft Fork) and BIP 91.

At first look, this arrangement looks way better.

I can practically hear you yelling, “The system will be much speedier. Yippee!”

In any case, the fiend lies in the points of interest. In the event that this arrangement is executed, each excavator in the system should overhaul their equipment and programming. There is no understanding of in reverse similarity incorporated into this arrangement. The individuals who won’t overhaul will be stranded by the system. That is the reason it is known as a Hard Fork. We should investigate.

Envision there are ten mineworkers in the system, and that six of them choose to move up to bigger measured pieces. These six will keep chipping away at making the longest chain significantly more, however their mined pieces will be disposed of by the rest four who still consider old square size to be valid.

How does SegWit 2x support miners?

What do diggers like? Higher prizes. What do excavators like considerably more? Less rivalry.

Because of the way that not every person will have enough cash to update their calculation energy to mine bigger pieces beneficially, littler diggers will vanish far from the system. This will leave bigger and less mineworkers in the system — which significantly decreases the opposition.

At the point when Satoshi Nakamoto the wonderful thought of building a decentralized future, he didn’t mean it just in principle, yet he implied it practically speaking. Placing power in the hands of couple of vast excavators conflicts with the foundational thought of bitcoin’s presence.

On the off chance that you’d ask miners they’d presumably say something like “We are running the system. We should have a say how we need to run it. On the off chance that we close our PCs and leave, there’ll be no bitcoin.”

And on the off chance that they did, they’d be correct. But at the same time they’re off-base.

They are correct when they say there’ll be no bitcoin on the off chance that they leave, yet they’re wrong since when they say just they are running the system, they’re stating it with an indistinguishable expectations from that of individuals running consistent banks and governments.

“Blockchain is not just a software protocol that allows financial transactions. It is the protocol that changes the fundamental beliefs of our species”

With this convention, there is no place for the feeling of possession. Everyone possesses the system and no one claims the system. The sooner we acknowledge it, the sooner we’ll have the capacity to gain genuine ground.

What precisely is the part that everyone is discussing?

Keep in mind when the squares mined by six of our diggers were disposed of by the rest four? We should perceive what the blockchain looks like for them. The four mineworkers who are chipping away at the littler piece estimate, will keep mining their own arrangement of squares and will be making their own form of the longest chain.

At the point when that happens, the blockchain will part in two blockchains. A few hubs will be dealing with one adaptation and some on the other. How about we mark the subsequent blockchain like so:

The ‘Bitcoin Common’ some portion of the chain is the part before the split. Diggers with the redesigned PCs will take a shot at the ‘Bitcoin Current’ branch of the chain while the mineworkers who are still on the old square size will frame the ‘Bitcoin Classic’ branch of the chain.

Bitcoin, the cash, will along these lines adequately be part into two. Mint pieces that were gathered by clients amid the Bitcoin Common can be spent on both Bitcoin Classic and Bitcoin Current. Be that as it may, the coins that will be exchanged on Bitcoin Classic will be unique in relation to those exchanged on Bitcoin Current. They will be distinctive in amount, diverse in esteem and diverse in reception. They will be as various as any two previous cryptographic forms of money can be.

What will happen to the bitcoins you claim?

It depends where you’ve kept your bitcoins. In the event that they are all alone PC, you can spend them twice — once on each blockchain. Yet, in the event that they are put away in an online wallet, the destiny of your coins is in their grasp.

Each online wallet will have their own particular take how they need to continue with this blockchain split. They may either move your coins to one variant of the blockchain or enable you to spend on both. It depends.

What I’d encourage you to do is not make any exchanges a couple of days previously, then after the fact August 1, 2017. Due to the fork, you may lose your bitcoins into the thin air. All things considered, bitcoins are only records of exchanges. On the off chance that you exchange doesn’t get recorded by both of the chains, they will be gone until the end of time. Poof.

There’s a great deal of turmoil around what may occur on August 1. Over most recent few weeks, markets have been more unstable than any time in recent memory. As of this written work on July 24, 2017, every one of the mineworkers are flagging BIP 91 (the digger’s recommendation). With this, it appears like bitcoin will stay away from the split on August 1, however it is not a certification still. Mineworkers saying that they will actualize BIP 91 doesn’t mean essentially imply that they will. This is only an announcement of plan from the miners.

To truly execute BIP 91, larger part of the diggers should overhaul the product on the greater part of their PC before August 1. Diggers running the refreshed programming is still under 50 percent.

In the event that the diggers adhere to their plan over one week from now as well, the SegWit part of SegWit 2x will be initiated, and the 2x section (expanding the piece estimate from 1MB to 2MB) will be headed in the not so distant future, which will be a hard fork. What may occur amid the hard fork? We’ll convey another guide at that point to keep you educated on the issue.

On the off chance that another point you’d like an extreme guide on, please let me know in the remarks underneath!

Escalabilidad en Bitcion. Se viene un Fork en Bitcoin, ¿qué hago?

Bitcoin es complejo, lo sabemos. Aunque hoy es muchísimo menos complejo que hasta hace unos años pero viendo que incluso en el sistema tradicional hay gente que le cuesta administrar un cajero automático, qué podemos esperar de una moneda donde se habla de Fork, Mining, Blocks, Segwit, Hash etc.. aún así esto es parte de la etapa evolutiva y por eso estamos a full metidos acá adentro

Escalabilidad, de qué me hablan cuando dicen ¿Escalabilidad en Bitcoin?

La Blockchain en Bitcoin es el libro contable donde se guardan todas las transacciones históricas y cada uno de los participantes de la red tiene una copia exacta del libro. Nadie puede adulterar contenido de hojas previas a menos que todos los participantes tuvieran la misma versión por ende en términos sencillos, es prácticamente inviolable y así lo ha sido por todos estos años

Estas hojas del libro (o bloques en la blockchain), tienen un tamaño definido de 1 mega, y en los tiempos recientes, dado el uso y la adopción de Bitcoin, esas hojas están llenas todo el tiempo. No quedan espacios vacíos lo que genera que quienes quieran que su transacción quede registrada tienen que pelear por una comisión más alta para entrar o simplemente esperar largos períodos hasta que haya un espacio vacío donde entrar con baja comisión o fee

Dentro de la liturgia y la filosofía Bitcoin hay dos grandes ideas para resolver ese problema: O ponemos hojas más grandes en el libro (Bigblocks).. o buscamos una forma nueva de escribir las transacciones para que ocupen menos espacio y entren más transacción por hoja (Segwit). Segwit adicinoalmente incluye otras soluciones que permiten tener libros secundarios donde podemos escribir muchas más transacciones y cada tanto grabar en el libro primario

Estas dos ideas no llegan a concenso ya que quienes promueven Segwit que es el grueso de los programadores que han mantenido hoy a Bitcoin donde está, quieren mantener el bloque como está alegando mayor seguridad y que evita la centralización ya que un bloque más grande generaría mayores costos para mantener un nodo lo que dejaría a los nodos en manos de grupos más reducidos (¿Está estrictamente comprobado?.. bueno hay muchos posts con variadas opiniones)

Por otro lado quienes promueven los bloques más grandes, creen que no es así el tema de la centralización, o tal vez ¿la prefieren?. Pero el argumento es que bloques más grandes permitirían que entraran muchísimas más transacciones y que el usuario final pueda usar bitcoin en forma casi gratuita con comisiones (fees) muy muy bajos cosa por la cuál muchas altcoins han ganado espacio que Bitcoin podría no haber perido

De todas maneras, y esto es mi opinión, la escalabilidad de largo plazo no quedará resuelta con bloques más grandes. Si bitcoin fuera a ser usado como plataforma para operar al nivel de VISA, el bloque tendría que ser gigantezco e incluso debiera aumentar la frecuencia de escritura de bloques. Habiendo dicho esto, si bien esa escalabilidad futura puede darse con otras soluciones que Segwit provee, eso tomará tiempo y lamentablemente en el interim tendremos que convivir con esta batalla que de poder haberse alineado mejor tal vez un bloque intermedio podría haber dado aire de corto plazo. Pero más allá de esto, incluso algunos piensan que bitcoin nunca debiera ser una plataforma de transacciones rápidas sinó solo una reserva de valor aún si fuera cara la transacción.. ideas de un mundo descentralizado

Segwit2x venía justo a ocupar ese lugar de encontrar una solución de largo y corto plazo al mismo tiempo, tal vez fuí naive en creer que esto ya resolvería la grieta pero está claro que aún no está resuelta. Por un lado, quienes quieren Segwit apoyaron en silencio la implementación inicial de Segwit2x.. hasta que la misma se confirmó con el Bip91 o casi que se confirmó.. todavía falta un poco pero ahora empiezan a mostrar sus garras diciendo que no aceptarán la segunda parte.. Por otro lado quienes quieren los Bigblocks, tal vez sabiendo de que esto podía pasar.. decidieron finalmente abrir un camino nuevo y ahí es donde viene la creación de BitcoinCash BCC que la implementarían como un HardFork a partir del 1ro de Agosto

En estricto sentido es una buena noticia y una lástima al mismo tiempo. Buena noticia porque al ser hardfork y al ir por un nombre distinto, permite una transición limpia donde cada uno podrá experimentar su teoría. Mala porque es una muestra que los concensos son difíciles y esta primera muestra de ruptura no será la primera seguramente.

¿Habrá Fork? ¿Qué es el Fork? Bitcoin Cash
De confirmarse que Bitcion Cash salga a la luz (pareciera que sí, pero esto cambia minuto a minuto), lo que va a suceder es lo siguiente:

  • Quienes Tienen Bitcion, tendrán también Bitcoin Cash en igual cantidad de cada una
  • Esto no implica que el precio se duplica, el precio en dólares que el mercado le de a Bitcoin (BTC) y a Bitcoin Cash (BCC) es independiente y lo que hagas con una moneda no afecta a la otra en forma directa

Quienes crean Bitcoin Cash como hardfork básicamente agarran una copia del libro contable hasta la Hoja XXX y a partir de ahí distribuyen dicha copia entre quienes vayan a minar las nueva moneda pero le dan hojas más grandes a partir de ese punto. Dichas hojas no caben en el libro anterior por lo cuál si vas a minar o participar de dicha moneda, sí o sí a partir de ese punto tendrás que tener las nuevas carpetas que soporten hojas más grandes aunque la historia permanecerá intacta con tus saldos ahora denominados en BCC…

Mientras tanto, tus BTC seguirán como siempre, en sus libros contables tradicionales

¿Qué hacer?

Para usar Bitcoin, y enviar dinero, es necesario una clave privada (private key) que permite a la red confirmar que uno es dueño del dinero en una determinada dirección. Esa clave privada será común entre Bitcoin y Bitcoin Cash, con lo cuál tener control sobre dichas claves automáticamente te dará control sobre el dinero en ambas monedas.

Si bien aún no se tiene conocimiento de qué billeteras o herramientas habrá que soporten BCC, en caso de salir a la luz, seguiramente pronto habrá muchas herramientas para poder tener acceso a dichos saldos en BCC pero un acceso seguro será tener tus claves privadas y para ello lo más sano es:

  • Tener tus Bitcoins en billeteras que te dejen el control local de tus bitcoins y principalmente que te permitan leer las private keys. Copay por ejemplo te da control local aunque no es tan fácil leer las private keys pero igual es billetera segura. Electrum funcinoaría bien, de hecho con el seed de Copay podés leer desde Electrum tus private keys. Jaxx permite exportar las private keys, Mycellium etc
  • Si vas a optar por dejar tus BTC en bancos de Bitcoin como Xapo, coinbase, Ripio etc sólo lo haría si explícitamente el proveedor explicó su política al respecto. De momento entiendo Xapo dijo que no dará soporte a BCC pero que colaborará en vender los BCC y asignarte BTC. Entiendo Coinbase dijo que no dará soporte a BCC pero esto cambia minuto a minuto
  • Si vas a optar por un exchange, es porque el exchange comunicó que dará soporte a BCC y que te dará luego el saldo en ambas monedas para poder operar. No conozco por ahora estos casos excepto ViaBTC probablemente y para algunos si hubiera un exchange serio y confiable que lo haga puede ser mejor que hacerlo uno mismo aunque siempre es mejor tener todo en tu propia billetera

¿Una vez que salga BCC está todo terminado?

No, en primer lugar porque no se sabe si BCC saldrá, tampoco se sabe si la salida de BCC implicará que ahora Segwit2X no siga más y quede sólo en Segwit1X.. tampoco se sabe si de seguir Segwit2x esto implicará fork entre 1x y 2x… todavía falta mucho más que vivir y experimentar

Pensamiento final

Muchos se confunden porque las Altcoins parecieran no tener estos problemas… pero no se confundan.. las Altcoins están lejos de haber siquiera experimendao una fracción del uso real y la valoración que tiene bitcoin. No hay altcoin hoy que garantice ser “refugio” porque cualquier altcoin si tuviera que llevar adelante los miles de millones de dólares que hay en juego, seguiro estallarían en cinco minutos así que no nos confundamos. Son momentos históricos, muy importantes para Bitcoin y para participar en el

  • Qué hacer:
    Todavía no se tiene certeza absoluta de que dicho fork Bitcoin Cash suceda
    Pero de suceder, para poder cobrar el saldo en ambas monedas se deberá proeder similar a las recomendaciones originales: a- tener tus bitcoins ahora en monederos donde controles las private keys; b- si tu idea es “protegerte en otras altcoins” fuiste porque caundo vuelvas tendrás que elegir entre una u otra.; c- No dejar dinero en exchanges a menos que explícitamente hayan mencionado que conserarán el saldo en ambos forks si sucedieran y vos como usuario prefieras delegar esa responsabilidad al exchange en vez de hacerlo vos mismo(muchos pueden sentirse inseguros en el procedimiento y preferir un riesgo por sobre el otro)

How Gatecoin is prepared for a bitcoin split

Originally included in Blockchain Asset Weekly (July 13):

Gatecoin is prepared in case the divergent scaling solutions for bitcoin, expected to come into effect in the coming weeks, results in splitting the bitcoin blockchain and sparks the creation of new assets to represent each branch.

Gatecoin will support the withdrawals of new assets created from such a split by all clients that hold BTC at the time that this may occur on 1st August.

However, we cannot currently confirm if Gatecoin will support the trading of the new assets as it is uncertain what these new assets would be or whether BTC may still represent one of these branches.

We will wait if a split happens to determine the listing of new assets associated with whatever bitcoin becomes and withdrawals will only become available after we can guarantee a fully secure implementation.


How Gatecoin is prepared for a bitcoin split was originally published in Gatecoin Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.

BIP91 & SegWit2x Lock-in, Activation

By Albert Szmigielski

There seems to be a lot of confusion about BIP91, SegWit, SegWit2x timelines lock-in and activation dates. This is a quick explainer.

BIP91 Forces signalling for BIP141.
269/336 blocks are required to lock BIP91 in.
Current BIP91 period started at block 476448.
If at block 476783 we have 269 blocks that signalled bit 4, then bip91 will be locked-in.
Once that (lock-in) happens BIP91 will be activated 336 blocks later (roughly two and one third of a day).
BIP91-enabled nodes will reject blocks that do not signal BIP141.
BIP91 was devised to avoid BIP148 activation.
Once signaling BIP141 becomes “mandatory” we still need to have enough votes for BIP141 to lock it in and activate it.
Lock-in happens after 2016 blocks (roughly two weeks).
Activation happens 2016 blocks later.
Earliest SegWit lock-in could happen is Aug 10th.
As a result earliest SegWIt activation could be Aug 24th (2016 blocks after lock-in)

Originally published at blog.cryptoiq.ca on July 19, 2017.

Why Bitcoin “drama” is not bad at all?

Why Bitcoin "drama" is not bad at all?

There are many reasons for such statement.

Satoshis vision based on several key fundamentals:

  • trustless
  • decentralised
  • distributed

If we take look at Bitcoin today I have question — what of above fundamentals he has today and there are few keywords:

  • AsicBoost
  • AntBleed
  • BitmainTech
  • Roger Ver, Jihan Wu, Gavin Andresen, Jeff Garzik, Barry Sielbert, etc

Bitcoin today can be anything except trustless, decentralised and distributed. Bitcoin today is BitmainTech Corporation! Large number of miners are in BitmainTech slavery so I do understand their position.

Core developers are tech people with honest thinking and boy scouts. Certain number of miners as well. Problem is that politics and greed entered Bitcoin and Crypto arena. Those without technical skills and vision "smell blood" and as sharks arrived in that arena. Bitcoin is gangrenous at the moment and gangrene must be removed. That means there will be pain but after that wound will heal. Or Bitcoin Community will be on it's knees and accept new China masters and their puppets…

There will be NO agreement with China Government, Jihan, Roger and company. They want it ALL. Profiling showed many times that with such mindset there is no agreement. I wrote about it few months ago so if interested check it out.

To make it clear, if Segwit NOT activated by August 1st long war is ON. If Core kneels down — Bitcoin as Satoshi vision is LOST. This will be war between Bitmain Miners and Bitmain Satellite companies on one side and Knowledge (Core Developers) and Awaken Users on other side. Outcome is certain but it will take time and bring pain.

Luckily Crypto Ecosystem is today mature enough to take hit like that and it is not gloom and doom all the way.

When we speak about Crypto Ecosystem he must as well be distributed and decentralised. Question is should whole new dimension in human evolution be dependant on only one "product" — Bitcoin. Many will argue that Alts are centralised. Most of them are. But, at the moment, most centralised is Bitcoin and this "drama" is raging because of "Shadow Mining" BitmainTech centralisation and by GeoLocation centralisation is in China.

As well, people who claim that "Alts are centralised" probably heard that on Internet or social networks. If you look closely there is certain number of Alts that are decentralised, trustless and distributed much, much more than Bitcoin. People mostly do not investigate themselves but rather blindly join "camps"….

At the time of writing this text I see that some Alt's bottomed VS Bitcoin and expect them to reverse in correlation soon. Solid, robust, prosperous Crypto World should not be dependant on only one coin even if that is Bitcoin. I wrote about that as well so check if you will.

I am over 20 years on market and I am covered with scar's. But I did learn few rules in that time:

  • Never marry investment — investment is bitch,
  • Do not let politics in portfolio,
  • "Be right and seat tight" — by Jesse Livermore
  • Wealth is made when there are rivers of blood — not when markets go up
  • Never chase rabbit
  • Turtle will win the race not rabbit
  • Good investor must always be ready for U-turn if fundamentals/environment change

I did prepare for this 5 months ago. When there was full blown bull I put some profit in metals. Have solid revenue stream through several vectors so cash was not needed. But I did significantly reshape Crypto portfolio. I do not want to get Goxed. Skipped that first time and learned a lot.

What I learned in this Bitcoin "drama" is that whole Crypto World is currently hostage of Bitcoin. Bitcoin is hostage of China Government hijack attempt through BitmainTech Asic dependant miners. To resolve this it will take time.

I am confident that this environment is WIN-WIN for some Alt's:

  • if drama resolved everything will skyrocket — Alt's for sure more than Bitcoin — especially some Alt's
  • if drama escalates I am 100% sure that some Alt's will soon have reversal correlation with Bitcoin. Drop VS Bitcoin has already stopped. I am sure that Crypto World will NOT die whatever happens to Bitcoin as well.
  • I am sure that at the and Bitcoin will have to get rid of above mentioned gangrene and prosper — will take time, will be painful but at the end all this is Bitcoin feature NOT bug. But was made when community left all power in miners hands forgetting that miners are people only and greed will be there as well.

I am looking for fundamentally good Alt's that are distributed, decentralised, immutable, trustless. They must NOT be/have:

  • P0W only
  • China crew/dev majority
  • over 200 mil coin cap
  • located mostly in China — must be distributed world wide (MN/P0S helps here)
  • Cult person as dev leader or have centralised dev team

They must HAVE:

  • they must generate "fixed" income through MN/P0S/DPoS — trust me it is much easier to look price drop when your amount of coins is growing and you do nothing but stake. When prices go up again you get surprised every time…

Yes, there are investments like that. No, I am not going to shill them here.

If interested — go find them yourself….. ;-)

Conclusion is that Bitcoin will have to grow up and mature as well as whole Crypto World.

All of us will have to learn few things in this new dimension.

Only 1% will make real wealth here and those will be ones that go against heard and sound delusional to most of you.

Time will do the rest…

Good luck and God bless….

Blockchain VS Sigwit VS crypto currency price

as you know guys, beberapa minggu terakhir saya menyibukkan diri dengan belajar terkait blockchain (teknologi dibelakang bitcoin). Bahkan melibatkan diri lebih jauh lagi dengan ikutan sebagai miner hehehe..

Ada beberapa diskusi terkait turunnya harga crypto currency ex bitcoin (sempat menembus $1983 per coinnya) ini, mostly berpedendapat karena akan diimplementasikannya Sigwit di sisi protocol bitcoin dan diaktifkannya BIP148 per 1 agustus nanti. Kumudian kok bisa ? apa itu sigwit apa itu BIP148 ? apa hubungannya dengan price..

Sebelum masuk ke SigWit, yuk mari mendekatkan diri dulu dengan bagaimana bitcoin bekerja..

Blockchain -> block -> transaction

Blockchain bisa dibayangkan sebuah buku yang digunakan seseorang accountant . Terdiri dari halaman yang saling terhubung (block), dan didalam halamannya kita bisa menuliskan data transaksi like debit-credit.

blockchain bekerja secara peer to peer, semua bisa join dan menjadi host dari blockchain sehingga sangat bagus jika dilihat dari sisi availability. Dari sisi integrity data, protocol blockchain menerapkan beberapa rules misalnya :

  1. block yang saling terkait (block chaining), yang mana tiap block akan memiliki hash dari previous block header. Sehingga jika ingin mengubah data dari block harus mengubah juga block yang terkait dengan block itu, dan seterusnya.
  2. ketika peer akan menambahkan block baru ke blockchain, terdapat mekanisme proft of work yang mana difficulty-nya akan disesuaikan. saat ini difficultynya berdasarkan 2016 block per 2 minggu.
  3. transaction terdiri dari input dan output, dengan rules input dari transaksi hanya bisa menggunakan output dari transaksi sebelumnya yang belum digunakan Unspent Transaction Outputs (UTXOs).
  4. Pada output terdapat data public key, sehingga yang dapat menggunakannya adalah yang memiliki private key.
  5. Data dari transaksi akan di sign (digital signature) untuk menjaga dari tempered ketika di broadcast ke peer lainnya. tiap peer akan melakukan verifikasi tiap transaksi yang diterima, kemudian disimpan kedalam blockchainnya dan disebarkan lgi.. dan seterusnya.

SigWit ?

Saat ini maximum block size pada blockchain yaitu 1MB, mengakibat terbatasnya transaksi yang bisa dituliskan pada satu block. Menambahkan block baru akan berhubungan dengan difficulty challenge dari proft of work. Untuk menjaga dari double spending (rewrite of block), biasanya menggunakan mekanisme confirmation deep of block (sejak block dari transaksi ini telah ada sekian” block didepannya).

Hall diatas berdampak ke lamanya transaksi itu terkonfirmasi, bisa jam bahkan harian. Inilah salah satu penghambat kenapa bitcoin belum banyak digunakan for daily use misalnya untuk kopi-kopi cantik, ibu” ke pasar dan lainnya.

Data yang tertulis dalam transaksi meliputi sender address, reciever address, dan digital signature), yang mana 65% dari spacenya adalah data signature.

SigWit sendiri adalah kependekan dari Segregated Witness. Secara garis besar memindahkan penempatan signature dari input list ke structure baru yang disebut witness

Versioning the Protocol / Consensus Rule ?.

ketika update terhadap protocol terjadi, dengan konsep peer to peer berarti kita tidak bisa memaksakan semua node untuk update. Untuk itu dikenal pendekatan hard fork dan soft pork.

hard fork, block baru yang telah melalui new rules hanya akan diterima oleh upgraded node, non upgraded node akan menolak karena tidak sesuai rules yang lama.

Soft fork, block baru yang gagal melalui new rules akan ditolak oleh upgraded node, tetapi tetap akan diterima oleh non upgraded node. Agar soft fork sukses, dibutuhkan konsensus dari sebagian besar miner (block creator) untuk menggunakan upgraded client.

UASF (User Activated Soft Fork), mekanisme tambahan biasanya dengan batasan waktu agar soft fork dijalankan. Ini membuat menjadi hard-fork pada periode tertentu (non upgraded fork akan ditolak).

What happen in 1 august ?

soft fork untuk sigwit akan terjadi pada 21 july, dan BIP148 (UASF) yang akan dimulai 1 augustus dan berakhir 15 November. Jika majority dari miner tetap komitmen untuk update ke sigwit maka kita akan merasakan process updatenya dengan lancar, jika tidak tentu eventualy hard fork akan terjadi dan bisa saja bitcoin seperti Etherium dalam kasus Etherium Classis dan Etherium.

oke mungkin hanya itu yang bisa ku share untuk story ini. Jika ada salah” dalam tulisan diatas mohon koreksinya.

let see what happen in crypto currency world..

Sources:
https://bitcoin.org/en/developer-guide#transaction-data
https://www.youtube.com/watch?v=DzBAG2Jp4bg&t=64s
https://github.com/bitcoin/bips/blob/master/bip-0141.mediawiki
https://github.com/bitcoin/bips/blob/master/bip-0142.mediawiki
https://github.com/bitcoin/bips/blob/master/bip-0143.mediawiki
https://github.com/bitcoin/bips/blob/master/bip-0144.mediawiki
https://github.com/bitcoin/bips/blob/master/bip-0145.mediawiki
https://github.com/bitcoin/bips/blob/master/bip-0148.mediawiki
https://www.youtube.com/watch?v=NOYNZB5BCHM
https://bitcoinmagazine.com/articles/segregated-witness-part-how-a-clever-hack-could-significantly-increase-bitcoin-s-potential-1450553618
https://vimeo.com/channels/tomscryptochannel
https://bitcoincore.org/en/2016/01/26/segwit-benefits/
http://www.deadalnix.me/2016/10/17/segwit-is-not-great/
https://medium.com/@zhangsanbtc/ending-the-soft-hard-fork-debate-a-safe-hard-fork-is-the-same-as-a-soft-fork-c0e96eeb62d0#.8z3ene1nr
https://www.youtube.com/watch?v=NOYNZB5BCHM
https://zander.github.io/posts/Flexible_Transactions/
https://www.youtube.com/watch?v=PGTzuDG5jEA
https://medium.com/@bitcoinroundtable/bitcoin-roundtable-consensus-266d475a61ff#.8zue35ton
https://twitter.com/lopp/status/679725937802506240?ref_src=twsrc%5Etfw
https://vid.me/Cah2
https://bitcoincore.org/en/2016/10/28/segwit-costs/
https://bitcoincore.org/en/2016/10/27/release-0.13.1
http://gavinandresen.ninja/utxo-uhoh
https://github.com/bitcoin/bips/blob/master/bip-0134.mediawiki
http://imgur.com/a/iv3m6
http://luke.dashjr.org/programs/bitcoin/files/charts/software.html
https://blockchain.info/charts/n-transactions?timespan=2years
https://blockchain.info/charts/n-transactions-per-block?daysAverageString=7&timespan=2years
https://twitter.com/aantonop/status/792487163795496960
https://bitcoinmagazine.com/articles/antpool-will-not-run-segwit-without-block-size-increase-hard-fork-1464028753


Blockchain VS Sigwit VS crypto currency price was originally published in sarccom on Medium, where people are continuing the conversation by highlighting and responding to this story.

The Litecoin Core Client Still Doesn’t Create SegWit Transactions By Default

Controversy is never hard to come by in the world of cryptocurrencies. Litecoin successfully activated Segregated Witness on the network months ago. Interestingly enough, the Litecoin Core client doesn’t generate SegWit transactions by default. One would expect this to have changed by now, yet it hasn’t for some unknown reason. This begs the question if … Continue reading The Litecoin Core Client Still Doesn’t Create SegWit Transactions By Default

The post The Litecoin Core Client Still Doesn’t Create SegWit Transactions By Default appeared first on NEWSBTC.

Potential Bitcoin network disruption on August 1st

If you are active in crypto news world you should’ve heard by now that August 1st will be an important day in Bitcoin scaling timeline.

August 1st marks date for UASF BIP148 activation and Bitcoin users are getting prepared for potential block chain split and consequences this could bring to the network. A lot of companies are already supporting this change and preparing for it, yet there are many wallets and exchanges who have not shown such signs.

Bitcoin.org announced on Wednesday July 12th, 2017 that on July 31st:

Bitcoin confirmation scores may become unreliable for an unknown length of time. This means than any bitcoins you receive after that time may later disappear from your wallet or be a type of Bitcoin that other people will not accept as payment.

A lot of big companies like GDAX are issuing statements saying that they will temporarily suspend deposits and withdrawals for bitcoin until picture clears out and one chain becomes dominant or there are 2 community adopted ones.

Due to this make sure your bitcoins are stored safely with wallet that supports all possible outcomes and it is advised not to make any transactions during July 31st — August 2nd.

~ SC

As always a side note on our sponsor Genesis Mining, we have 3% discount code available: wVuZfb to help you get started with cloud mining coins like BTC, ETH, DASH, XMR, LTC, ZEC if this is something of interest.

Potential Bitcoin network disruption on August 1st

If you are active in crypto news world you should’ve heard by now that August 1st will be an important day in Bitcoin scaling timeline.

August 1st marks date for UASF BIP148 activation and Bitcoin users are getting prepared for potential block chain split and consequences this could bring to the network. A lot of companies are already supporting this change and preparing for it, yet there are many wallets and exchanges who have not shown such signs.

Bitcoin.org announced on Wednesday July 12th, 2017 that on July 31st:

Bitcoin confirmation scores may become unreliable for an unknown length of time. This means than any bitcoins you receive after that time may later disappear from your wallet or be a type of Bitcoin that other people will not accept as payment.

A lot of big companies like GDAX are issuing statements saying that they will temporarily suspend deposits and withdrawals for bitcoin until picture clears out and one chain becomes dominant or there are 2 community adopted ones.

Due to this make sure your bitcoins are stored safely with wallet that supports all possible outcomes and it is advised not to make any transactions during July 31st — August 2nd.

~ SC

As always a side note on our sponsor Genesis Mining, we have 3% discount code available: wVuZfb to help you get started with cloud mining coins like BTC, ETH, DASH, XMR, LTC, ZEC if this is something of interest.

“Very simple. Very easy. Good.”

At the Future of Bitcoin, the alleged Satoshi Craig Wright held a furious talk, which was interrupted by emergent eruptions of applause. What a show in Arnhem!

In the conference room in Arnhem’s WTC few people really believe that Craig Wright is Satoshi. However, the man is an enigma. There might be a tiny chance, that he really is Satoshi, even if this would mean that Satoshi has a fable for faking evidence. More likely, however, is that Wright is a con man, who is extraordinary skillful in spinning nets, mixing facts and lies to entertain the impression that he is the creator of Bitcoin.

But it doesn’t matter. Wright, if he is Satoshi or a con man, is brilliant, and what he does, this way or that way, deserves to get in the books of history. The presentation he gave in Arnhem, finally, was thrilling.

Actually the schedule promised Jon Matonis. Matonis, a large man with glasses and grey hair, entered the stage and shortly presented the company nChain; it will bring radical on-chain scaling and smart contracts to Bitcoin. Then he announced to do something nobody has done before at a Bitcoin conference; he will donate his stage time to someone else. To “the legend of Australia, Bitcoin Dundee; Mister Craig Wright.”

“There is no Limit of Demand? Good.”

And so Craig Wright entered the stage. He is a good speaker, at least one, who knows what to do on stage. He walks back and forth, maintains a strong glance, raises and lowers his voice, does rhetoric breaks, uses controlled, but effectuzl gestures and talks with his own kind of rhythm, which transports a strong urgency. It is obvious that Craig Wright loves to hear himself talk.

The Australian knows very well what the Big Block community, that is meeting in Arnhem, wants to hear. And he is willing to give. He quoted Peter Todd who said, that you can not scale Bitcoin, because there is no limit on demand. Wrights answers:

“Good. I want no limit on demand. I want every single person on this globe using not altcoins, not whatever else, I want them using Bitcoin. I don't want a shitty argument, people will use it, and it will be bad. Very simple. Very easy. Good.”

That’s it, right? That’s the thing we are all up to, right? The game is about creating hard, independent, free money and gifting it to the world. It’s not about putting the whole blockchain on any Raspberry Pi, “these wincy-cincy insignificant machines." Bitcoin will scale, Wright promised, and those who miss it because their machine is too small, will be left behind. That’s no Anarcho-Socialism, but merciless Capitalism.

“If you had been in Bitcoin since 2009, and you can't Afford a $20,000 Node to Help this Network - Piss Off.”

Craig Wright performs the angry Satoshi. In a sweeping blow, he attacked the Core developers for failing to achieve what he planned for Bitcoin.

The cryptocurrency is nearly in its tenth year. $40 billion is nothing. The user interface sucks. The IP-to-IP payment, Satoshi envisioned in the early days, is put out and not substituted. Instead of a merchant-friendly payment protocol, which allows merchants to secure zero-confirmation transactions by propagating them by themselves, they got Replace-By-Fee (RBF). Which is, as Wright puts it, “the biggest piece of shit ever made.”

His presentation gets exciting when he reaches the topic of quadratic scaling. This problem means that you can create a DoS attack on Bitcoin, by building a transaction which has many Signature Operations, the so-called SigOps. Such a monster transaction can, even with a size of 1MB, overload weak nodes. With a size of 4 or 8MB, it can knock out the whole network.

Wright says that quadratic scaling is not a design flaw, but a code flaw from Core. “It was added to Bitcoin; it is easy to fix." He demonstrated a piece of code and explained, "BU and BitCrust and our team independently picked it and fixed it."

Bitcoin Unlimited actually fixed the DoS-attack based on quadratic scaling. To do so, the developers limited the number of SigOps each transaction or block. This prevents attacks but does not solve the original issue, the quadratic scaling - other than SegWit, which fixes it for SegWit transactions. So, at the core, Wright's argument is not completely wrong, but questionable.

But the alleged Satoshi takes this detail to jump to the big issues. At this point, he proves a thrilling, demagogic talent.

He asked, how many SigOps each second he can do. He looked around and answered the question; 500,000 each second. "That's scale. And yes, that's a $20,000 machine. Quite frankly, I don't care about Raspberry pies. If you had been in Bitcoin since 2009, and you can't afford a $20,000 node to help this network - piss off. And I will say that one again: if you will not do this, if you will not help the network, and if you will not take this thing that is given to you, financial freedom, financial independence, and help people, by spending a little money on a decent network - fuck off!”

At this moment, wild applause erupted. Bitcoin can afford to scale. Stop thinking so little.

“You’re all getting it wrong. Node count is shit. It has zero relevance.”

All this is just a piece of this turbulent talk. Wright jumped through the topics; Moore’s Law (is our friend), transaction fees as flood controls (like envisioned by Satoshi in the original release), the velocity of money (which scales the price), Sidechains (which undermine Bitcoin’s security model). Wright explains that Bitcoin is Turing Complete because it’s script system has two stacks (which is, at least, an interesting argument), and then he claimed to have run a self-evolving code in Bitcoin, which has been killed by high fees.

Shortly later, he presented one of these intriguing thoughts which maybe are typical for him. He explains, that all the models, with which the network is analyzed are wrong. It is not about nodes, but about connections!:

“It is the connectivity between the graph that matters. So, you’re all getting it wrong. Very simple. You do node count. Node count is shit. It has zero relevance… Bitcoin, the actual model; dense. There is a distance of 1.32. Small World. It is bigger than a small world model. It is not a mash. You send one transaction, in two 2.3 seconds, once it hits the network, 99.8 percent of the hash power has your transactions, it can need five seconds to reach every Raspberry, but that doesn't matter…”

Why is this important? First, it is an interesting idea to think of a network not in nodes but edges. Second, it touches the block size debate - and here it’s all about it - at several points. It eliminates worries that the network might lag when blocks grow too big since a small world network is capable of managing high capacities without lagging. Then it weights into the long-standing debate, who is the king - nodes or miners - and how do you measure the importance. Wright’s approach dwarfs all those ideas that pump up SegWit or BIP148 by calling on node counts.

But that is not all. Wright uses this perspective to take shots against the Lightning Network:

“This is what people think it is, this is what lightning is, a mesh, with lots of little hops, central nodes, etcetera, ... the mathematics behind Sybil attacks, any network with a distance of more than three hops can be attacked. That’s mathematically proven. Lightning can have 18 hops, not eight, 18… Bitcoin has a distance under three.”

Is he onto something? It is hard to say. Mathematically, he might be right. But also you have to take into perspective, that Lightning requires funds to open a connection - which is a channel - so it is not possible to spam it with pseudo nodes. Also, you can’t easily fake data, like in other networks, since you need to sign any transaction and any channel. So this argument, again, is not completely perfect.

A Mining Pool that Does Not Accept SegWit Transactions

Also, Wright bashed SegWit. One of the alleged advantages of SegWit is that you can better prune Signatures without harming the integrity of the transaction. But, Wright argues, why would you? Merchants need to keep the signatures, as they are a needed part of the documentation. “What’s the purpose of making something deletable, you don’t want to delete,” he asked. But also, you can add; why should merchants document the signatures of people they don’t do business with?

SegWit, Wright goes on, needs 400 percent of capacity to reach the same effect as a block size increase. Presented without context, this is nothing but a lie and the lowest point in Wright's presentation. At best, it indicated that he does not understand SegWit. But he should.

Nevertheless, Wright announced to fight SegWit actively. He promised to soon launch a mining pool, with at least 20 percent of the network’s hash rate, which will not confirm SegWit transactions. So SegWit transactions will be slower than legacy transactions.

Also, Wright announced to release a Bitcoin framework with nChain. This eliminates the block size limit but introduces a flood control with fees. Additionally, nChain’s framework promises to build the infrastructure for shares addresses and new payment stream for merchants.

But right now, not a single line of code of nChain is available.

So, what now? Is he Satoshi? Or a Con man?

There is one thing, you can say for sure about Wright's talk; it was excellent entertainment, tailored for everybody who finds themselves deep in the block size debate. Big cinema. Very dense, but always to the point and surprisingly twisted.

On the bottom of the arguments, at the floor of facts, Wright sometimes appears to be fuzzy or wrong. That’s why some experts say he is a trickster or a con man, someone, who fools people with superficial technical knowledge into believing that he knows much more than he really does.

At the end of the day, it is not important. Both sides of the story, Wright as a crazy Satoshi with strange habits, or Wright as a con man playing Satoshi, are fascinating. The man does something big and genius. And all this does not change that some of the things he said, are just true.