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Update and Few Thoughts, a (Well-Typed) transcript: Liza&Charles the marketeers, Voltaire kick-off, PrisM and Ebb-and-Flow to fuck ETH2.0 Gasper, the (back)log of a man and a falcon, lots of companies, September Goguen time, Basho, 2021 Titans, Basho, Hydra and much more thoughts and prayers
Hi everybody this is Charles Hoskinson broadcasting live from warm sunny Colorado. I'm trying a new streaming service and it allows me to annotate a few things and simulcast to both periscope and youtube. Let's see how this works. I also get to put a little caption. I think for the future, I'm just for a while going to put: "I will never give away ada". So, when people repost my videos for giveaway scams they at least have that. First off, a thank you, a community member named Daryl had decided to carve a log and give his artistic impression of my twitter profile picture of me and the falcon so that always means a lot when I get these gifts from fans and also I just wanted to, on the back of the Catalyst presentation, express my profound gratitude and excitement to the community. You know it's really really cool to see how much progress has been made in such a short period of time. It was only yesterday when we were saying "when Shelley"? Now Shelley's out and it's evolving rapidly. Voltaire is now starting to evolve rapidly and we're real close to Goguen. At the end of this month we'll be able to talk around some of the realities of Goguen and some of the ideas we have and give some dates for certain things and give you a sense of where that project is at. The good news is that we have gained an enormous amount of progress and knowledge about what we need to do and how to get that done and basically people are just executing and it's a much smaller task than getting us to Shelley. With Byron to Shelley we literally had to build a completely new cryptocurrency from the ground up. We had to have new ledger rules, new update system, we had to invent a way of transitioning from one system to another system and there's hundreds of other little innovations along the way: new network stack and so forth. Byron cosmetically looks like Shelley but under the hood it's completely different and the Shelley design was built with a lot of the things that we needed for Goguen in mind. For example, we built Shelley with the idea of extended UTXO and we built Shelley understanding what the realities were for the smart contract model and that's one of the advantages you get when you do this type of bespoke engineering. There's two consequences to that, one, the integration is significantly easier, and two, the integration is significantly faster. We won't look at that same complexity there. The product update at the end of the month... We'll really start discussing around some of these things as well as talk about partners and talk about how the development ecosystem is going to evolve. There are a lot of threads throughout all three organizations that are happening simultaneously. Emurgo, they're really thinking deeply about DeFi and they've invited us to collaborate with them on things like stablecoins for example but we're also looking at oracles (oracle pools), DEX and these other things and because there are already people in market who have made mistakes, learned lessons, it gives us the benefit of hindsight. It means we can be much faster to market and we can build much more competitive things in market and the Cardano community gets first access to these next generation DeFi applications without a lot of the problems of the prior generations and that's super beneficial to us. You know, the other side of it, is that Voltaire is going to have a systemic influence not just on community funding but also the overall evolution and direction of the platform. The longer it exists the more pervasive it will become. Probably first applied towards the Cardano foundation roadmap but later on it will definitely have a lot of influence and say over every element aspect of the system including the launch dApps and these other things. Basically, long term, the types of problems that Cardano solves so that's incredibly appealing to me and very exciting to me because it's like I have this giant community brain with the best and brightest of all of you working with us to get us where we need to go. You know, another thing that was super encouraging, it's a small thing, but it shows us that we're definitely in the right direction was that we recently got a demo from Pramod (Viswanath) and his team out of university of Illinois on a protocol they create called PrisM which is a super fast proof-of-work protocol and they wrote this beautiful paper and they wrote code along with it that showed that PrisM is a ten thousand times faster than Nakamoto consensus. If you take the bitcoin proof-of-work protocol, you strip it out, you put PrisM in, you can run the entire bitcoin system 10000 times faster. They have these beautiful benchmarks to show that. Even in bad network conditions. (I'm) promoting this team, they're, they're real researchers, and they're real engineers, they use a lot of cool HPC concepts like springboarding and other things like that to accommodate that. Then I asked him in the presentation, I said well, how much faster if you replay the Ethereum chain? He says, well, that it takes a big performance hit, could be only maybe a hundred times because that model is not as easy to optimize and shard with standard computer science concepts. In fact in some cases there are limitations there that really can't be overcome. It turns out that we're more on that UTXO side than we are on the account side. As a coincidence or intent of the design of extended UTXO we're gonna have a lot easier time getting much higher performance where and when it's necessary. I also approved this week a scaling up of the Basho project. In particular, to build a hydra prototype team. The science has gotten to a point where we can make a really competitive push in that particular direction. What does that mean? It means that in just a few short months we can de-risk technological approaches that long-term will give us a lot of fruit where and when the community decides that they need infrastructure like hydra. Now, here's the beautiful thing about hydra. If you watch my whiteboard back in September of 2017 when Cardano first hit market with Byron I talked about this concept of looking at scalability with a very simple test which is as you get more people in the system it stays at the same performance or it gets faster. We all experience systems that do this, for example, bittorrent, more people downloading something you tend to be able to get it faster and we all experience the converse which is, the system gets slower when you get more people. What does this mean? It means that hydra is an actual approach towards true scalability in the system and it's a lot easier to do than sharding even though we have a beautiful approach to get the sharding on the ledger side if we truly desire to go down that way. There's beautiful ideas that we are definitely in deep discussions about. That's a very complex thing. There was recently a paper ("Ebb-and-Flow Protocols: A Resolution of the Availability-Finality Dilemma") out of Stanford that showed that the Gasper protocol as proposed for ETH2.0 does have some security concerns and it's going to be the burden on the shoulders of the Ethereum 2.0 developers and Vitalik to address those concerns from those Stanford professors. Whenever you have these very complex protocols they have so many different ways they can break and things can go wrong so it's much more appealing when you don't have to embrace complexity to achieve the same. The elegance of hydra is that stake pool operators are very natural parties to put hydra channels on and every time we add one we get much more performance out of that and the system as it gets more valuable. The k factor increases which means you get more stake pull operators, which means you get more hydra channels, so with growth we get appreciation, with appreciation we get more decentralization, with more decentralization we get more performance. In essence, this spiritually speaking, is really what we meant when we said scalability. That the system will always grow to meet its particular needs and we have a very elegant way of moving in that direction that doesn't require us to embrace very sophisticated techniques. It's not to say that these techniques don't have a place and purpose but it says that the urgency of implementing these is gone and we then have the luxury to pick the best science when it's ready instead of rushing it to market to resolve a crisis of high fees. We'll never have that crisis so there's a beauty to Cardano that is missing, I in my view, from many cryptocurrencies and blockchains in the marketplace and we're now seeing that beauty shine through. Not only through our community who are so passionate and amazing but in the science and the engineering itself and how easy it is for us to navigate the concepts. How easy it is for us to add more things, to take some things away, to clean some things up here and there and our ability to move through. I never imagined when in 2015 I signed up to go in on this crazy ride and try to build a world financial operating system we would have made as much progress as we made today. We've written more than 75 research papers as an organization many of which are directly applicable to Cardano. We've got great partners who work with Nasa and Boeing and Pfizer, massive companies, that have 10 years of history and millions of users to come in and help us grow better. We've worked with incredible organizations, major universities like university of Wyoming, university of Edinburgh, Tokyo, tech professors all across the world. We've worked with incredible engineering firms like VacuumLabs and AtixLabs and Twig and Well-Typed, runtime verification, QuviQ and dozens of others along the years and despite the fact that at times there's been delays and friction throughout this entire journey we've mostly been aligned and we keep learning and growing. It gives me so much hope that our best days are ahead of us and an almost fanatical belief that success is inevitable in a certain respect. You see because we always find a way to be here tomorrow and we always find a way to make tomorrow a better day than today and as long as that's the trend you're monotonically increasing towards a better tomorrow, you're always going to have that outcome, you're always going to be in a position where Cardano shines bright. Towards the end of the month we'll have a lot more to say about the development side and that'll be a beginning just like Voltaire is the beginning and then suddenly you now notice the beautiful parallelism of the roadmap. Shelley continues to evolve, partial delegation is coming, in fact, I signed the contract with vacuumlabs to bring that to Ledger (and Trezor). The Daedalus team is hard at work to make that feature apparent for everyone as is the Yoroi team. You see that, with now Voltaire, and soon was Goguen, and these are not endpoints, rather they're just beginnings and they're never over. We can always make staking better, more diverse, more merit-based and entertain different control models, have better delegation mechanics, have better user experience. The same for smart contracts, that's an endless river and along the way what we've discovered is it's easy for us to work with great minds and great people. For example with testing of smart contracts I would love to diversify that conversation above and beyond what we can come up with and bring in some firms who have done this for a long time to basically take that part with us shoulder to shoulder and build beautiful frameworks to assist us. For example, runtime verification is doing this with, the EVM with a beautiful project called Firefly to replace Truffle. I believe that we can achieve similar ends with Plutus smart contracts. When you ask yourself what makes a system competitive in the cryptocurrency space? In my view there are four dimensions and you have to have a good story for all four of those dimensions. You need security and correctness. A lot of people don't prioritize that but when they get that wrong it hurts retail people, it hurts everyday people, billions of dollars have been lost due to the incompetence and ineptitude of junior developers making very bad mistakes and oftentimes those developers faced no consequences. The people who lost money were innocent people who believed in cryptocurrencies and wanted to be part of the movement but didn't protect themselves adequately. That's a really sad thing and it's unethical to continue pushing a model that that is the standard or the likely outcome rather than a rare edge case. You have to as a platform, a third generation platformn invest heavily in giving the developers proper tools to ensure security and correctness. We've seen a whole industry there's been great innovations out of Quantstamp and ConsenSys and dozens of other firms in the space including runtime verification who have really made major leaps in the last few years of trying to improve that story. What's unique to Cardano is that we based our foundations on languages that were designed right the first time and there's over 35 years of history for the approach that we're following in the Haskell side that allows us to build high assurance systems and our developers in the ecosystem to build high assurance systems. We didn't reinvent the wheel, we found the best wheel and we're giving it to you. I think we're going to be dominant in that respect as we enter 2021. Second, you look at things like ease of maintenance, ease of deployment, the life cycle of the software upgrades to the software and as we've demonstrated with things like the hard fork combinator and the fact that Voltaire is not just a governance layer for ada and Cardano but will eventually be reusable for any dApp deployed on our system. You have very natural tooling that's going to allow people to upgrade their smart contracts, their dApps and enable governance for their users at an incredibly low cost and not have to reinvent the governance wheel each and every application. This is another unique property to our system and it can be reused for the dApps that you deploy on your system as I've mentioned before. Performance is a significant concern and this was often corrupted by marketers especially ICO marketers who really wanted to differentiate (and) say: "our protocol tested on a single server in someone's basement is 500000 transactions per second" and somehow that translates to real life performance and that's antithetical to anyone who's ever to study distributed systems and understands the reality of these systems and where they go and what they do and in terms of performance. I think we have the most logical approach. You know, we have 10 years of history with bitcoin, it's a massive system, we've learned a huge amount and there's a lot of papers written about, a lot of practical projects and bitcoin is about to step into the world of smart contracts. We congratulate them on getting Schnorr sigs in and the success of Taproot. That means entering 2021, 2022, we are going to start seeing legitimate dApps DeFi projects, real applications, instead of choosing Ethereum or Algorand, EOS, Cardano, choosing bitcoin and they're adding a lot to that conversation. I think that ultimately that model has a lot of promise which is why we built a better one. There are still significant limitations with what bitcoin can accomplish from settlement time to the verbosity of contracts that can be written. The extended UTXO model was designed to be the fastest accounting and most charitable accounting model ever, on and off chain, and hydra was designed to allow you to flex between those two systems seamlessly. When you look at the foundations of where we're at and how we can extend this from domain specific languages, for domain experts, such as Marlowe to financial experts, and the DSLs that will come later, for others, like lawyers and supply chain experts in medical databases and so forth and how easy it is to write and deploy these. Plutus being beautiful glue code for both on and off chain communications. I think we have an incredibly competitive offering for performance and when hydra comes, simply put, there'll be no one faster. If we need to shard, we're going to do that and definitely better than anybody else because we know where our security model sits and there won't be surprise Stanford papers to blindside us that require immediate addressing. In terms of operating costs, this is the last component, in my view, and that's basically how much does it cost you the developer to run your application? There are really two dimensions, one is predictability and the other is amount. It's not just good enough to say: it's a penny per transaction today. You need to know that after you spend millions of dollars and months or years of effort building something and deploying something that you're not going to wake up tomorrow and now it's five dollars to do what used to cost a penny. You need that cost to be as low as possible and as predictable as possible and again the way that we architectured our system and as we turn things on towards the end of this year and as we enter into the next year we believe we have a great approach to achieve low operating cost. One person asks why Cardano? Well because we have great security and correctness in the development experience and tools with 35 years of legacy that were built right the first time and don't put the burdens of mistakes on your customers. They ask why Cardano and we say: well the chain itself is going to give you great solutions with identity value transformation and governance itself and as a consequence when you talk about upgrading your applications having a relationship with your customers of your applications and you talk about the ease of maintenance of those applications. There's going to be a good story there and we have beautiful frameworks like Voltaire that allow that story to evolve and we keep adding partners and who have decades of experience to get us along. We won't stop until it's much better. They asked why Cardano? We said because at the moment we're 10 times faster today than Ethereum today and that's all we really need for this year and next year to be honest and in the future we can be as fast as we need to be because we're truly scalable. As the system gets more decentralized the system improves performance and where and when we need to shard we can do that. We'll have the luxury of time to do it right, the Cardano way, and when people ask why Cardano? Because the reality is, it's very cheap to do things on our platform and the way we're building things. That's going to continue being the case and we have the governance mechanisms to allow the community to readjust fees and parameters so that it can continue being affordable for users. Everything in the system will eventually be customizable and parameterizable: from block size, to transaction fees and the community will be in a good position to dynamically allocate these things where and when needed so that we can enjoy as an ecosystem predictability in our cost. In the coming weeks and months, especially in my company, we're going to invest a lot of time and effort into comparison marketing and product marketing. When I see people say, oh well, you've launched proof of stake, a lot of other people have done. I don't think those people fully appreciate the magnitude of what we actually accomplished as an ecosystem and the quality of the protocols that are in distribution. That's not their fault, it's our fault, because we didn't take the time in simplistic terms, not scientific papers and deep code and formal specifications, but rather everyday language, to really show why we're different. I admit that that's a product failing and that needs to be corrected so we hired a great marketing director, named Liza (Horowitz?) and she is going to work full time with me and others in the ecosystem, a great team of people, every single day to get out there and explain what we have done is novel, unique, competitive and special to our industry. Everything from Ouroboros and contrast to major other protocols from the EOSes and Algorands and the Tezos of the world. Why we're different, trade-offs we chose over them, to our network stack, to the extended UTXO model, to Plutus, to Marlowe and we're going to keep hammering away at that until we get it right and everybody acknowledges and sees what has been accomplished. I've spent five years of my life, good years of my life, and missed a lot to get this project where it needs to go. All of our employees have invested huge sums of their personal lives, their time, their brand, their careers, in trying to make this the really most magical and special cryptocurrency and blockchain infrastructure around. No one ever signed up in this company or the other companies working on Cardano to work on a mediocre protocol. That's just another blockchain, they signed up to change the world, they signed up to build a system that legitimately can look at you in the face and say: one day we have the potential to have a billion users! That's what they signed up for and they showed up to play. They built technology that evolves in that direction with some certainty and great foundations and we have an obligation to market in a way that can show the world why, succinctly, with clarity. Understandably, this has been a failing in the past but you know what? You can always be better tomorrow that monotonically increasing make it better and that's what we're going to do. We recognized it and we're going to invest in it and with Voltaire if we can't do it. You the community can do it and we'll work with you. If you can do a better job and the funding will be there to get that done. In addition to this, we think about 2021 and we ask where does the future take us? I've thought a lot about this you know I've thought a lot about how do we get the next five years as we close out 2020 and here's the reality: we're not going to leave as a company until we have smart contracts and multi-asset and Voltaire has evolved to a point where the community can comfortably make decisions about the future of the protocol and that the staking experience has solidified and it's stable. I don't care if this costs me millions or tens of millions of dollars out of my own pocket to make happen. I'm going to do that because that's my commitment to you, the community and every product update will keep pushing our way there. We'll continue to get more transparent, we'll continue to get more aggressive and hire more and parallelize more. Aware when we can, to deliver that experience so that Cardano gets where it needs to go. Then when we ask about where do we go next? The reality is that the science as an industry, the engineering as an industry has given a menu of incredibly unique attractive and sexy things that we can pursue. What we're going to do is work with the community and the very same tools that are turning on today, the Voltaire tools, the cardano.ideascale.com tools and we're going to propose a consortium and we're going to bring the best and brightest together and give a vision of where we can take the system in another five years. With the benefit of hindsight, massively improved processes, better estimation capabilities and the fact that we're not starting with two people at IOG. We're starting with 250 people and the best scientific division in our industry and the legacy of almost, nearly by the end of this year, 100 scientific papers. That's us, you know what, there's dozens of companies throughout the history who have worked on Cardano. It's about time to scale them up too and get client diversity. So come next year when the protocol has evolved to the point where it's ready for it, we'll have that conversation with you the community and that's going to be a beautiful conversation. At the conclusion of it, there's going to be certainty of how we're going to evolve over the next five years to get ourselves beyond the cryptocurrency space. I'm very tired of these conversations we have about: are you going to go to (coindesk's) consensus or not? Or who's going to be the big winner? What about Libra or what about this particular regulation and this crypto unicorn and this thing? You know I've been in the space a long time and I've noticed that people keep saying the same things year after year in the same venues. Yes, the crowd sizes get larger and the amount of value at risk gets larger but I haven't seen a lot of progress in the places where I feel it is absolutely necessary for this technology to be permanent in the developing world. We need to see economic identity. People often ask what is the mission for Cardano? For us IOG, you look at economic identity and you take a look at a roadmap. For it, you scale up and down, and each and every step along the way, from open data, to self-sovereign identity, to financial inclusion. You can keep going down: to decentralized lending, decentralized insurance, decentralized banking. Each and every step along the way to economic identity. When you admit a blockchain tells you that, there's a collection of applications and infrastructure that you need to build. My life's work is to get to a point where we have the technology to do that. The infrastructure to do that, with principles, and so we'll keep evolving Cardano and we'll keep evolving the space as a whole and the science as a whole until I can wake up and say: each box and that road to economic identity, for all people not just one group, we have a solution for that. I'm going to put those applications on Cardano and success for me is not about us being king of the crypto hill and having a higher market cap than bitcoin or being entrepreneur of the year coindesk's most influential person. It's meaningless noise, success for me is reflecting back at the things that we have accomplished together and recognizing that millions if not billions now live in a system where they all matter, they all have a voice, they all have an equal footing. The Jeff Bezos of the world have the very same experience as the person born in Rwanda and we're not done until that's the case. It's a long road, it's a hard road, but you know what? We're making progress, we have great people in Africa, we have great people in eastern Europe, we have great people in southeast Asia and great partners all along the way. Great people, Latin America, great people in south America, great people here in the United States. When we talk about economic identity there are millions, if not tens of millions of Americans who don't have it. Same for Canadians, hundreds of thousands, who don't have it. Developed western cultures, it's the greatest blind spot of policy and as we enter into a depression as a result of coronavirus, add millions if not tens of millions more onto that list. Generations are being disenfranchised by this legacy system and we as an ecosystem, we as an entire community are offering a different way forward. Not hyper centralizationn not social credit but a way forward where you own your own money, your own identity, your own data. You're not a victim of surveillance capitalism, you're not a victim of civil asset forfeiture. When you say the wrong things, you get shut out of society. Each and every human being matters and I'm optimistic to believe that when you remind people that they matter they're gonna rise to the occasion. That is the point of my company. In the things that we do each and every day, that's our mission to give the platforms to the world so that those who don't have economic identity can get it and they can keep it and no one can take it from them and they can enjoy an ever increasing growth of standard of living wealth and prosperity. However you want to measure that this is my goal post, I couldn't care less about the cryptocurrency space. It was a great place to start but the space needs to be reminded why it exists. Bitcoin was given a mandate on the back of the 2008 financial crisis to do something different. It was not given a mandate to go be a new settlement layer for central banks or a new way for the old guard to make more money and banks get bigger and for those who are in control to preserve their power. The whole point of doing something so crazy as to buy a coin that doesn't even exist in real life, that's just a bunch of numbers in the cloud, the whole point of that was so that we as a society could do something different than the way that we'd been doing things before. So, each and every member of the cryptocurrency space needs to remind everyone else from time to time why we're here and where did we come from and where are we going to go. The beauty of Cardano is we have already achieved for the most part a decentralized brain and that momentum is pushing harder than ever. More and more scientists are waking up, more and more institutions are waking up, getting us there. The code we have, the right approach and I think we have a great competitive offering for 2021 as we go and battle the titans and that's going to be a lot of fun but we know who we are and where we're going and we're in the right places. It's so incredibly encouraging to see the stake pool operators not just be from California or Texas or New York or Canada. To see a lot of stake pool operators from the place that need the most, help everybody does matter and it means a lot to me for the people who are there but it means a lot to everybody to say that we have created an equal platform. It makes the participation of all of us so much more meaningful. We're not just talking to each other, we're talking to the world and by working together on this platform we're lifting the world up and giving people hope. That's the point, there's a lot more to do, we didn't get everything done. You never do you aspire, you work hard, you set a moon, shot and sometimes you can just get to orbit with the first go but you know what? When you build the next rocket you can go to Mars. Thank you all for being with me, thank you all for being part of this. Today was a damn good day with the announcement of Voltaire. Go to cardano.ideascale.com. You can participate in that, so end of September is going to be a good day too. There's a lot of good days to come, in between a lot of hard days, doing tasks sometimes entirely forgettable but always necessary to keep the revolution going and the movement going. I cannot wait for 2021, our best days are ahead of us, because of you. You all take care now . Source: https://www.youtube.com/watch?v=BFa9zL_Dl_w Other things mentioned: https://cardano.ideascale.com/ https://www.atixlabs.com/blockchain https://www.well-typed.com/ https://www.vacuumlabs.com/ https://medium.com/interdax/what-is-taproot-and-how-will-it-benefit-bitcoin-5c8944eed8da https://medium.com/interdax/how-will-schnorr-signatures-benefit-bitcoin-b4482cf85d40 https://quantstamp.com/ https://bloxian.com/bloxian-platforms/ (TWIG) https://runtimeverification.com/firefly/ https://www.trufflesuite.com/ https://experts.illinois.edu/en/publications/prism-deconstructing-the-blockchain-to-approach-physical-limits (PrisM and not our Prism https://atalaprism.io/) Ebb-and-Flow Protocols: A Resolution of the Availability-Finality Dilemma (aka Gasper and ETH2.0 fucker) https://arxiv.org/abs/2009.04987 http://www.quviq.com/products/ https://en.wikipedia.org/wiki/Schnorr_signature
CashShuffle is a privacy tool that automatically mixes (or "shuffles") your Bitcoin Cash with other CashShuffle users, making it harder to spy on you with blockchain analysis. There have already been 57,099 shuffles, making 267,268 BCH more private =) Shuffle veterans, spin up your Electron Cash wallets! If your whole wallet is already shuffled, go to the Coins tab (which you can make visible in the "View" menu), select the coins you'd like to shuffle today, right click, and then click "re-shuffle". (In addition to helping out with "liquidity" for Shuffle Saturday, this gives you an even larger "anonymity set". If you're new, though, you don't have to worry about this "re-shuffle" step for now!) CashFusion early adopters, consider closing 4.1.0 and opening up 4.0.15 for the day :-) New to privacy on Bitcoin Cash? No problem, getting set up is EASY. Just download the Electron Cash desktop wallet. It's got CashShuffle built in! Set up your wallet (and be sure to write down your recovery phrase on a physical piece of paper, especially if you are going to hold significant amounts of coin in the wallet), then activate CashShuffle by clicking the deck of cards icon in the lower right (which kind of looks like a shoe =P). Once it's activated, it will start shuffling your coins. Shuffles happen as their own, separate transactions, and only cost you the transactions fees (less than a penny). Electron Cash will, by default, prevent you from spending coins that haven't been shuffled yet, so it may take a little while to have enough shuffled for regular use. (It actually tends to happen pretty quickly; there are just some randomly slower times so you can't always count on it. What you CAN always count on... is Shuffle Saturday.) Learn more at https://cashshuffle.com/ Or learn about how CashShuffle works "under the hood" with this explainer video: https://www.youtube.com/watch?v=8g0Levpj1I4 Happy shuffling!
CashShuffle is a privacy tool that automatically mixes (or "shuffles") your Bitcoin Cash with other CashShuffle users, making it harder to spy on you with blockchain analysis. There have already been 56,322 shuffles, making 265,224 BCH more private =) Shuffle veterans, spin up your Electron Cash wallets! If your whole wallet is already shuffled, go to the Coins tab (which you can make visible in the "View" menu), select the coins you'd like to shuffle today, right click, and then click "re-shuffle". (In addition to helping out with "liquidity" for Shuffle Saturday, this gives you an even larger "anonymity set". If you're new, though, you don't have to worry about this "re-shuffle" step for now!) CashFusion early adopters, consider closing 4.1.0 and opening up 4.0.15 for the day ;-) New to privacy on Bitcoin Cash? No problem, getting set up is EASY. Just download the Electron Cash desktop wallet. It's got CashShuffle built in! Set up your wallet (and be sure to write down your recovery phrase on a physical piece of paper, especially if you are going to hold significant amounts of coin in the wallet), then activate CashShuffle by clicking the deck of cards icon in the lower right (which kind of looks like a shoe =P). Once it's activated, it will start shuffling your coins. Shuffles happen as their own, separate transactions, and only cost you the transactions fees (less than a penny). Electron Cash will, by default, prevent you from spending coins that haven't been shuffled yet, so it may take a little while to have enough shuffled for regular use. (It actually tends to happen pretty quickly; there are just some randomly slower times so you can't always count on it. What you CAN always count on... is Shuffle Saturday.) Learn more at https://cashshuffle.com/ Or learn about how CashShuffle works "under the hood" with this explainer video: https://www.youtube.com/watch?v=8g0Levpj1I4 Happy shuffling!
CashShuffle is a privacy tool that automatically mixes (or "shuffles") your Bitcoin Cash with other CashShuffle users, making it harder to spy on you with blockchain analysis. There have already been 55,009 shuffles, making 256,319 BCH more private =) Shuffle veterans, spin up your Electron Cash wallets! If your whole wallet is already shuffled, go to the Coins tab (which you can make visible in the "View" menu), select the coins you'd like to shuffle today, right click, and then click "re-shuffle". (In addition to helping out with "liquidity" for Shuffle Saturday, this gives you an even larger "anonymity set".) CashFusion early adopters, consider closing 4.1.0 and opening up 4.0.15 for the day ;-) New to privacy on Bitcoin Cash? No problem, getting set up is EASY. Just download the Electron Cash desktop wallet. It's got CashShuffle built in! Set up your wallet (and be sure to write down your recovery phrase on a physical piece of paper, especially if you are going to hold significant amounts of coin in the wallet), then activate CashShuffle by clicking the deck of cards icon in the lower right (which kind of looks like a shoe =P). Once it's activated, it will start shuffling your coins. Shuffles happen as their own, separate transactions, and only cost you the transactions fees (less than a penny). Electron Cash will, by default, prevent you from spending coins that haven't been shuffled yet, so it may take a little while to have enough shuffled for regular use. (It actually tends to happen pretty quickly; there are just some randomly slower times so you can't always count on it. What you CAN always count on... is Shuffle Saturday.) Learn more at https://cashshuffle.com/ Or learn about how CashShuffle works "under the hood" with this explainer video: https://www.youtube.com/watch?v=8g0Levpj1I4 Happy shuffling!
CashShuffle is a privacy tool that automatically mixes (or "shuffles") your Bitcoin Cash with other CashShuffle users, making it harder to spy on you with blockchain analysis. There have already been 54,507 shuffles, making 254,378 BCH more private =) Shuffle veterans, spin up your Electron Cash wallets! If your whole wallet is shuffled, go to the Coins tab (which you can make visible in the "View" menu), select the coins you'd like to shuffle today, right click, and then flick "re-shuffle". (This gives you an even larger "anonymity set".) CashFusion early adopters, consider closing 4.1.0 and opening up 4.0.15 for the day ;-) New to privacy on Bitcoin Cash? No problem, getting set up is EASY. Just download the Electron Cash desktop wallet. It's got CashShuffle built in! Set up your wallet (and be sure to write down your recovery phrase on a physical piece of paper, especially if you are going to hold significant amounts of coin in the wallet), then activate CashShuffle by clicking the deck of cards icon in the lower right (which kind of looks like a shoe =P). Once it's activated, it will start shuffling your coins. Shuffles happen as their own, separate transactions, and only cost you the transactions fees (less than a penny). Electron Cash will, by default, prevent you from spending coins that haven't been shuffled yet, so it may take a little while to have enough shuffled for regular use. (It actually tends to happen pretty quickly; there are just some randomly slower times so you can't always count on it. What you CAN always count on... is Shuffle Saturday.) Learn more at https://cashshuffle.com/ Or learn about how CashShuffle works "under the hood" with this explainer video: https://www.youtube.com/watch?v=8g0Levpj1I4 Happy shuffling!
I often saw some Bitcoiners counter the altcoin shillers with the following argument: "Bitcoin is the first so it has the network effect, so your altcoin will always worth less" This is not totally wrong but I think this argument is bad. Using it implies implicitly that you admit that Bitcoin is technically less capable than altcoins with their higher transaction rate, fast blocks, instant confirmation, without fees and smart contract support.... And this is WRONG ! Bitcoin price is higher, because Bitcoin is already TECHNICALLY BETTER than any other altcoin and not because of network effect. In 2017, Bitcoin dominance was lower, some altcoin reaches almost the same level than Bitcoin. So network effect is not what prevents an altcoin to take the lead but it is the fact that almost all altcoin that pretend to be better than Bitcoin are technically flawed. Why ? They use bigger blocks, DAGs (Directed Acyclic Graphs, like used in IOTA or Nano) or wtf they created to disturbe you and make you believe they are better than the good old Bitcoin blockchain. But they have at least one of these two weak points: validation time oand bandwidth. If they use biggefaster blocks, validation time of block is higher and so block propagation is slower. Less nodes can operate as they may not be able to validate blocks fast enough to keep up with the tip of the chain. You end up like Ethereum that has less and less full verification nodes leading to centralization of the network. If they use DAGs, they achieve consensus through a "proof-of-stake" vote and always at the cost of bandwidth (quadratic cost in number of node, linear in transaction rate). DAGs are often presented as "each node has its own ledger" but the reality is that the only global ledger you should trust is the complete DAG of the ledgers of each node. Only servers with a shitload of download bandwidth can maintain it as debunked here and here. To not look (in fact be) centralized, some DAG altcoins doesn't, opening the door to history rewrite by buying account that owned a big stake before and still use a lot of bandwidth to reach consensus. Bitcoin just add 80 bytes of proof-of-work data on a block of 1-2MB to achieve it and protect from history rewrite, almost zero cost for the network (that's why we pay fees to miners who carry the cost). You only have those problems when it reaches a critical level of usage and only then we can see how much those limits where ignored. Until now, very few altcoins reached the limit (maybe Ethereum, and IOTA shows us it is centralized already by stopping the network) Bitcoin has the highest price because Bitcoin is technically the only possible decentralized king (and a centralized cryptocurrency worths nothing). Yes maybe 1MB limit was too conservativ, yes fees are higher, yes 10 minutes is slow. But if everyone wants their coffee payment to be settled onchain, 1MB or 8MB or 32MB each 10 minutes, minutes or secondes will never be enough while it is a big difference for the network health. You only need the blockchain for settlement, for payment you have Lightning Network that can already destroy PayPal's transaction rate. So next time you feel convinced by an altcoin that pretend to be better than Bitcoin while being decentralized by design, evaluate the requirement to be a fully validating node and what the overhead of bandwidth needed to achieve consensus. The chances are high that they didn't take care of one of these two issues and end up centralized or broken. You don't need the network effect argument.
CashShuffle is a privacy tool that automatically mixes (or "shuffles") your Bitcoin Cash with other CashShuffle users, making it harder to spy on you with blockchain analysis. There have already been 55,820 shuffles, making 260,138 BCH more private =) Shuffle veterans, spin up your Electron Cash wallets! If your whole wallet is already shuffled, go to the Coins tab (which you can make visible in the "View" menu), select the coins you'd like to shuffle today, right click, and then click "re-shuffle". (In addition to helping out with "liquidity" for Shuffle Saturday, this gives you an even larger "anonymity set".) CashFusion early adopters, consider closing 4.1.0 and opening up 4.0.15 for the day ;-) New to privacy on Bitcoin Cash? No problem, getting set up is EASY. Just download the Electron Cash desktop wallet. It's got CashShuffle built in! Set up your wallet (and be sure to write down your recovery phrase on a physical piece of paper, especially if you are going to hold significant amounts of coin in the wallet), then activate CashShuffle by clicking the deck of cards icon in the lower right (which kind of looks like a shoe =P). Once it's activated, it will start shuffling your coins. Shuffles happen as their own, separate transactions, and only cost you the transactions fees (less than a penny). Electron Cash will, by default, prevent you from spending coins that haven't been shuffled yet, so it may take a little while to have enough shuffled for regular use. (It actually tends to happen pretty quickly; there are just some randomly slower times so you can't always count on it. What you CAN always count on... is Shuffle Saturday.) Learn more at https://cashshuffle.com/ Or learn about how CashShuffle works "under the hood" with this explainer video: https://www.youtube.com/watch?v=8g0Levpj1I4 Happy shuffling!
Multicurrency Wallet DEXs will be the standard of the 2020s. The present status quo is an absolute joke.
Before I begin, I'd like to ask you a question. Why are so many of the most established people in crypto among the most closed-minded when it comes to talking about new ideas? Why is the crypto space more concerned with what a clown from Australia is lying about or petty figurehead drama than the hard work and effort of the good and lesser-known among them? Let's talk about altcoins for a minute. It'd be a very tough job to count every single alt that's come in on a hypetrain and died in obscurity. If I were to guess that 95% of them failed, I wouldn't be surprised to hear that it was a conservative estimate and that the number is even higher. Indeed, it would be much easier to count the exceptions to the rule. To name a few - ETH, LTC, XMR, and (quite amusingly) DOGE. Should the stubbornly high failure rate of alts justify writing them all off as garbage? Businesses have an incredibly high failure rate too. It would be foolish - outright silly, even - to say that the grocery store is a fraud and a scam because the aqua-saxophone jazzercise laundromat failed to live up to it's expectations. Maybe not, because this is exactly the way the crypto space is right now. That line of thinking is the de facto standard in the cryptocurrency space right now - "guilty (of being a shitcoin) until proven innocent (by some central authority figure or big exchange who can validate it for us so we don't have to do it ourselves)". To be fair, there was an aggressive torrent of these "goofy laundromats" in 2017 and people are either hungover or shell-shocked from all the broken pipedreams and costly fiction. You'd think that the titans of this industry, particularly those who care more about the cypherpunk essence of Bitcoin than how rich they can get off of it, would be more receptive to the legitimate projects that are working in obscurity to harden the crypto space and it's infrastructure. Unfortunately, that does not seem to be the case. All too many seem to think that everything that needed to be built has already been built. Considering that all the Bitcoin titans are somewhat newly-minted, the irony is remarkable. No one used to take Bitcoin seriously. The further back in time you go, the more it took lonely effort and independent research to truly grasp its ideas. This is still the case today. Most have heard of it but have no idea what it is or why it's important. Many who are fervently in PMs or traditional investments like stocks and bonds continue to deride it, even though it will go down as the best performing asset of the 2010s by far. Others are a little more aggressive and, despite a lack of knowledge, call it anything from a scam to "rat poison squared". Like anything else, it's foolish to make bold claims atop little to no education. You'd think that treatment would make Bitcoin maximalists do some reflecting. Instead, a sizable number of them decided to emulate the ones who beat up on Bitcoin when it was small and irrelevant. "All you need is Bitcoin. Everything else is trash. I know what I'm talking about because I bought the top of the 2013 bubble and I'm probably immune to future dumps for life". Now let's talk about where cryptocurrency infrastructure falls short. Bitcoin still retains the same cypherpunk essence that it's always had. The same can be said for Bitcoin wallets. They're secure. They allow for anonymous transactions. They run on an immutable blockchain. There is no central authority between a key-holder and their funds. Enter the exchanges. In a way, they were a necessary evil. Without them, adoption would be severely throttled. With them, Bitcoin is compromised. For many, the privacy and anonymity that BTC is supposed to offers has been tossed out. It was the only way it could be retrofitted into a tightly-controlled system that demands KYC. While this has helped to spread adoption, Bitcoin has become more and more traceable. Quite ironically, many of these same exchanges that adopted KYC policies to "ensure accountability from their customers" had no trouble exit scamming. They come and go. The old one gets hacked, or it exit scams, or proves itself to be corrupt and suspicious. A new one comes. This time it will be different. Then the cycle repeats itself. Mt. Gox. Bitfinex. Polo. Bittrex. Binance. They all had their time in the Sun. These exchanges are in many ways the antithesis of the cypherpunk manifesto - vulnerable honeypots directly controlled by a centralized figurehead. Unsurprisingly, they cause a lot of unneeded trouble and give Bitcoin a ton of bad publicity. Example:
Me: "What do you think of Bitcoin?" Co-worker: "Didn't that thing get hacked last week?" Me: "Bitcoin didn't, but a place where it was exchanged was." Co-worker: "I don't trust it. It's only a matter of time til they find out how to type in some numbers to make more show up on a screen blah blah blah."
You've all likely met someone like this and brushed them off as closed-mined, but they're exactly the type of person this industry needs to convince to further adoption. It will be next to impossible to do so with the way things are right now. In order for Bitcoin to survive, it needs exchanges that are built to the same code that it was. The solution, therefore, is to "port" the cypherpunk essence of Bitcoin to the exchanges. Immutability. Anonymity. Privacy. No central authority of figurehead. With all that said, let's talk about DEXs. I started a thread on here a few months back when Binance announced that they were giving Americans the boot. I got a ton of answers. It shows that, among the hardcore at least, there is a desire to go in a new direction. Loopring, IDEX, and Bisq were among the more popular choices. It's a step in the right direction. However, these DEXs are still rather inaccessible - especially to outsiders. Performance wise, they're on the slower side of things. Due to these setbacks, they suffer from low volume. This is where some recent developments in multicurrency wallets with embedded DEXs from lesser-known projects will come out of obscurity and catch everyone by surprise. Among them - I'd like to mention Stakenet Wallet and KMD's Atomic DEX. Both of them, now seemingly weeks away from launch, will allow for atomic swaps between a wide variety of coins directly from a private wallet. Stakenet goes a step further by offering atomic swaps running atop Lightning Network. Why does this matter? These two platforms will be to exchanges what the inception of Bitcoin was to currency. Finally, after almost 9 years, Bitcoin not only has an exchange that truly honors its essence, but it's starting to see healthy competition between them. To elaborate further on why this is very important.. No KYC. No accounts. No sending Bitcoin to an exchange and waiting around for it to show up. No downloading multiple wallets. No exchange figureheads. No withdrawal freezes. In Stakenet's case, the decentralized MN network that runs it's DEX will also act as a massive LN payment processor (routing, watchtowers) that provides a ton of liquidity for it while allowing Bitcoin to scale. "Lightning swaps" will provide every LN-based coin the ability to be instantly swapped to purchase anything in BTC. Stakenet will also feature a DEX aggregator that will pool together the orderbooks of numerous DEXs into one easily-accessible spot, boosting traffic to the many DEXs that are harder to reach and furthering their adoption along. Simply download a wallet like you would any other app and you're ready to get started. It's so much easier and more convenient. I don't see how or why CEXs and all their ilk (figurehead drama, geoblocking, exchange hacks, wash trading, currency manipulation, exit scams, etc) could remain relevant in the environment to come. Regulation will not save us. Decentralization will. As long as one person learned something from this, it was all worth it. I welcome the opinions of everyone in this space.
A better anti-reorg algorithm using first-seen times to punish secret/dishonest mining
Bitcoin currently allows a malicious miner with at least 51% of the network hashrate to arbitrarily rewrite blockchain history. This means that transactions are reversible if they belong to a miner with a hashrate majority, and such transactions are subject to double-spend attempts. Bitcoin SV's miners have repeatedly threatened to perform this attack against exchanges using BCH by mining a secret, hidden chain which they only publish after they have withdrawn funds in a different currency from the exchange. It would be nice if we could prevent these secret mining re-org attacks. Yesterday, I came up with a new algorithm for making secret re-org attacks very expensive and difficult to pull off. This new algorithm is designed to avoid the permanent chainsplit vulnerabilities of ABC 0.18.5 while being more effective at punishing malicious behavior. The key to the new algorithm is to punish exactly the behavior that indicates malice. First, publishing a block after another block at the same height has arrived on the network suggests malice or poor performance, and the likelihood of malice increases as the delay increases. A good algorithm would penalize blocks in proportion to how much later they were published after the competing block. Second, building upon a block that was intentionally delayed is also a sign of malice. Therefore, a good algorithm would discount the work done by blocks based not only on their own delays, but the delays that were seen earlier in that chain as well. Since the actions at the start of the fork are more culpable (as they generate the split), we want to weight those blocks more heavily than later blocks. I wrote up an algorithm that implements these features. When comparing two chains, you look at the PoW done since the fork block, and divide that PoW by a penalty score. The penalty score for each chain is calculated as the sum of the penalty scores for each block. Each block's penalty score is equal to the apparent time delay of that block relative to its sibling or cousin, divided by 120 seconds, and further divided by the square of that block's height from the fork. This algorithm has some desirable properties:
It provides smooth performance. There are no corners or sharp changes in its incentive structure or penalty curve.
It converges over very long time scales. Eventually, if one chain has more hashrate than the other and that is sustained indefinitely, the chain with the most hashrate will win by causing the chain penalty score for the slower (less-PoW) chain to grow.
The long-term convergence means that variation in observed times early in the fork will not cause permanent chainsplits.
Long-term convergence means that nodes can follow the standard most-PoW rule during initial block download and get the same results unless an attack is underway, in which case the node will only temporarily disagree.
Over intermediate time scales (e.g. hours to weeks), the penalty given to secret-mining deep-reorg chains is very large and difficult to overcome even with a significant hashrate advantage. The penalty increases the longer the attack chain is kept secret. This makes attack attempts ineffective unless they are published within about 20 minutes of the attack starting.
Single-block orphan race behavior is identical to existing behavior unless one of the blocks has a delay of at least 120 seconds, in which case that chain would require a total of 3 blocks to win (or more) instead of just 2.
As the algorithm strongly punishes hidden chains, finalization becomes much safer as long as you prevent finalization from happening while there are known competitive alternate chains. However, this algorithm is still effective without finalization.
I wrote up this algorithm into a Python sim yesterday and have been playing around with it since. It seems to perform quite well. For example, if the attacker has 1.5x as much hashrate as the defenders (who had 100% of the hashrate before the fork), mine in secret for 20 minutes before publishing, and if finalization is enabled after 10 blocks when there's at least a 2x score advantage, then the attacker gets an orphan rate of 49.3% on their blocks and is only able to cause a >= 10 block reorg in 5.2% of cases, and none of those happen blindly, as the opposing chain shows up when most transactions have about 2 confirmations. If the attacker waits 1 hour before publishing, the attack is even less effective: 94% of their blocks are orphaned, 95.6% of their attempts fail, 94.3% of the attacks end with defenders successfully finalizing, and only 0.6% of attack attempts result in a >= 10 block reorg. The code for my algorithm and simulator can be found on my antiReorgSim Github repository. If you guys have time, I'd appreciate some review and feedback. To run it:
git clone https://github.com/jtoomim/antiReorgSim.git cd antiReorgSim python reorgsim.py # use pypy if you have it, as it's 30x faster
Thanks! Special thanks to Jonald Fyookball and Mark Lundeberg for reviewing early versions of the code and the ideas. I believe Jonald is working on a Medium post based on some of these concepts. Keep an eye out for it. Edit: I'm working on an interactive HTML visualization using Dash/Python! Here's a screenshot from a preliminary version in which convergence (or attacker victory, if you prefer) happens after 88.4 hours. In this scenario, the attacker wins because of the rule in Note 5. Edit 2: An alpha website version of the simulator is up! The code is all server-side for the simulation, so it might get overloaded if too many people hit it at the same time, but it might be fine. Feel free to play around with it! Note 1: This time delay is calculated by finding the best competing chain's last block with less work than this one and the first block with more work than this one and interpolating the time-first-seen between the two. The time at which the block was fully downloaded and verified is used as time-first-seen, not the time at which the header was received nor the block header's timestamp. Note 2: An empirical constant, intended to be similar to worst-case block propagation times. Note 3: A semi-empirical constant; this balances the effect of early blocks against late blocks. The motivation for squaring is that late blocks gain an advantage for two multiplicative reasons: First, there are more late blocks than early blocks. Second, the time deltas for late blocks are larger. Both of these factors are linear versus time, so canceling them out can be done by dividing by height squared. This way, the first block has about as much weight as the next 4 blocks; the first two blocks have as much weight as the next 9 blocks; and the first (n) blocks have about as much weight as the next (n+1)2 blocks. Any early advantage can be overcome eventually by a hashrate majority, so over very long time scales (e.g. hours to weeks), this rule is equivalent to the simple Satoshi most-PoW rule, as long as the hashrate on each chain is constant. However, over intermediate time scales, the advantage to the first seen blocks is large enough that the hashrate will likely not remain constant, and hashrate will likely switch over to whichever chain has the best score and looks the most honest. Note 4: The calculation doesn't actually use height, as that would be vulnerable to DAA manipulation. Instead, the calculation uses pseudoheight, which uses the PoW done and the fork block's difficulty to calculate what the height would be if all blocks had the fork block's difficulty. Note 5: If one chain has less PoW than the other, the shorter chain's penalty is calculated as if enough blocks had been mined at the last minute to make them equal in PoW, but these fictional blocks do not contribute to the actual PoW of that chain.
As a reminder, the reason to support SegWit is because it is clearly the best blocksize limit increase proposal, based on technical merit, not because of who proposed it. SegWit is the fastest and least disruptive onchain capacity increase proposed
SegWit will result in an effective onchain capacity increase of c110%, current Bitcoin fees are skyrocketing and a capacity increase is now desperately needed. The methodology used to increase capacity is literally increasing the amount of data per block, so that it is higher than the current 1MB limit. Contrary to some of the misinformation going around, SegWit does not increase capacity by improving efficiency, the only way capacity improves is by increasing the blocksize.
SegWit is a faster onchain capacity increase than all other blocksize limit increase proposals. Some may argue that SegWit is slower than a “simple hardfork to 2MB blocks”, but this assumes a faster user upgrade to the “simple 2MB hardfork” client than for the SegWit client, this is a spurious comparison. On a like for like basis (for any given level of user upgrades), SegWit is a faster and larger capacity increase than a "simple hardfork to 2MB".
SegWit can provide individual users an almost instant 80% fee reduction, after activation, even if no other wallets upgrade. After SegWit activates, a single user can upgrade to SegWit and their wallet will automatically segregate the witness in their own transactions, no matter what other users do, this will result in 80% lower fees, assuming all else remains equal. This almost instant benefit, is far superior to any other capacity increase proposal.
With SegWit, upgraded wallets and non upgraded wallets can seamlessly transact with each other, unlike almost all other blocksize limit increase proposals
If 51% of miners support SegWit, we will avoid a chainsplit and the creation of a new coin, unlike almost all other blocksize limit increase proposals.
Third party transaction malleability fixes
Unfortunately due to a bug in Bitcoin, when users send a transaction, anyone on the network can change the transaction ID, which could be the transaction that ends up getting confirmed in the blockchain. This means that if a user receives a Bitcoin transaction, it is often not reliable or safe to forward these funds on to somebody else, before the incoming transaction receives a confirmation. This is a huge problem for the user experience and sometimes results in users waiting around for confirmations, which can take longer nowadays due to full blocks. SegWit fixes this bug, allowing users to send transactions without exposing themselves to this risk. Additional advantages of this fix is that it makes implementing wallet software far easier and makes implementing payment channel technologies like the Lighting Network easier.
Fixing the quadratic scaling of sighash operations bug, making a further bocksize limit increase both safer and more likley
Unfortunately, due to another bug in Bitcoin, as transactions gets larger, the amount of hashing required to verify the signatures increases in a quadratic way. For example doubling the size of a transaction can increase the verification time by a factor of 4. SegWit fixes this bug by allowing users to create transactions with linear scaling of sighash operations. Many people in the community oppose a “simple hardfork to 2MB” on the grounds that this could open up an attack vector, where a would be attacker could exploit this bug and produce hard to validate blocks. Fixing this bug therefore makes a further blocksize limit increase after SegWit both safer and more likely.
Signing of input values, making Bitcoin easier for hardware devices
SegWit allows users to create transactions where the input value is hashed. This means hardware wallets can spend a transaction without needing a copy of all the input transactions and needing to hash these inputs. This makes hardware wallets much easier to develop and it makes it easier to use Bitcoin on smaller embedded devices
Not requiring wallets to download the signature data to check the transaction hash
After SegWit, wallets will no longer need to check the signature data to check the transaction hash. This means light wallets can avoid downloading more of the signature data. This improves the scalability of the network and makes further blocksize limit increases safer.
Introducing script versioning makes upgrades to increase onchain capacity even further far easier
SegWit adds a version number for scripts, this means new opcodes that would have required a hardfork, can now be added by changing the script version. For example more efficient signature schemes like Schnorr signatures can be added, which would further increase onchain capacity.
https://preview.redd.it/1lagrcjnc9o31.png?width=1074&format=png&auto=webp&s=3136db9ca685dc17477d307df722e5b73ba80030 Spock Network is a decentralized storage platform. In the early stage, Spock Network mainly stores Proof of Capacity (POC) consensus data to effectively utilize the most suitable decentralization technology to encourage miners providing hard disk space. Recently, Spock has been growing rapidly and getting listed on four famous exchanges including CoinEx. On Sept. 19, CoinEx will launch Accelerator for Spock, allowing users to subscribe SPOK with 0.0075 USD. Besides, in order to help our users to dig more about Spock, we have invited the open source code contributor of Spock, Titian Xie, to throw an AMA among our community. Below is the recap of the AMA and enjoy your reading!
Q1: How will Spock solve the existing problems in blockchain?
A: Spock is a decentralized storage application network. Judged from the current development of blockchain technology, PoC is the only choice for a decentralized incentive mechanism in a distributed network composed of a large amount of hard disk space and bandwidth. On one hand, this solves the problem of excessive power consumption in the current mining industry, and on the other hand, it solves the problem of fair competition among a large number of existing hard-disk mining machines. At the same time, on that basis, Spock also supports Solidity smart contracts, which makes the entire ecosystem more prosperous.
Q2: Could you please say something about the team?
A: The core members of our team are all early users on Bitcointalk forum and developers of Burst. They are very familiar with the technology development trend and the details of the bottom of the blockchain technology. Even I with such a R&D background could only throw myself down at their feet in admiration. Their ideals are also very pure, that is, to make Spock a community coin like Bitcoin and Litecoin.
Q3: Community building has just started. What will you do to build the social media that remain active and continuously focus on Spock?
A: Spock is a decentralized application platform. The community also relies on spontaneous word of mouth. Since Spock was put on the test net and later on the main net, many miners and holders have spontaneously joined in to become owners, and maintained and promoted the community. The upcoming Solidity smart contracts can be carried out by polling among the holders, and members of the community will vote through the smart contract to determine the project function expansion and community governance.
Q4: Spock is a decentralized storage application platform, so what advantages does it have compared with the traditional centralized storage platform?
A: Traditional centralized storage platforms generally adopt cloud storage. Most of the data is stored on a few cloud platforms, which leads to serious centralization problems arising from data accumulation. There are also problems including higher cost, slower transfer rate, and poorer data security. The decentralized storage application platform encrypts and distributes data through a distributed network, meaning that no party, other than the data holder, could get access to the data, thus ensuring security. And one of the key issues is that the open decentralized platform can do better in protecting private data. As with the case of the assets of the digital assets of Huobi, the private key represents the ownership of the assets, and, on the decentralized storage platform, it can represent the disposition and access rights of the data.
Q5: Spock adopts the consensus mechanism of PoC. What advantages and disadvantages does PoC have compared with PoW and PoS?
A: In terms of resource usage, PoC is just between PoW and PoS, unlike PoW which consumes a lot of power, or PoS that almost costs nothing. Besides, since the core mechanism of PoC is similar to storing the “hashrate” of PoW on the hard disk, it also makes it possible for the mining equipment to mine in different projects at the same time, provided that several different projects use the same data structure.
Q6: We noticed that Spock also introduced the PoS mechanism on the basis of PoC. What is the consideration?
A: With the POS mechanism added in SPOCK, when a miner package a block, if its address balance satisfies the condition, he or she get get all the proceeds; otherwise, the proceeds will be reduced, and those that fail to meet the conditions will be destroyed. So in my opinion, developers introduce POS mechanisms to create a more equitable and sustainable ecosystem.
Q7: What will the team do to attract more developers to join the Spock ecosystem?
A: Spock is the first public link that supports the Solidity Smart Contract and has been put on the main net. It allows developers to port the DApp on the Ethernet to the network at a very low cost, while developers can design the mining and pledge mechanisms for the tokens of PoC distributed on this network.
Q8: What is the form of Spock mining? What are the conditions for miner application?
A: In SPOCK, mining is carried out through the storage device. First, you write the result of the hash calculation to the device, and reduce the huge hash calculation required in PoW algorithm by retrieving the data in the hard disk. Only a small amount of hash calculation will be required in execution stage. You can mine as long as you have storage equipment and meet the hashrate conditions. Ordinary miners just need an ordinary computer with a hard disk and access to the internet, then they need to go through hard drive mapping, download the wallet, install nodes and so on before mining.
Q9: I am a Windows phone user. How do I download a SPOK wallet?
A: At present there is only the Android version. Versions of other platforms are subject to the official arrangement.
Q10: Miners don’t know how much hashrate they have or how much they could pledge.
Q13: What are the advantages compared with Lambda or such? The larger the hard disk, the higher the hashrate?
A: My suggestion is to experience the mining process on both official sites so you may understand the differences between them.
Q14: Can we use the Raspberry Pi to mine at home?
A: Yes, theoretically. Yet the weak computing power of Raspberry Pi itself may affect efficiency in hard drive mapping. This is the end of the sharing. See you next time! If you have any suggestions, please submit a Ticket here: https://support.coinex.com/hc/en-us/requests/new
Elastos - Why it Fundamentally Matters, A Practical Analysis
This post is my humble attempt to convince you why Elastos is solving such a large problem with the internet today and hopefully providing a practical lens through which to understand what the implications are. Rong Chen speaks often about the need to create a new internet for us to truly have a digital economy akin to our physical economy but it is not easy to conceptually grasp what that means, why it matters, nor how Elastos is the solution to this. Hopefully this will be useful. Enjoy! WHY WE NEED SCARCITY IN A DIGITAL ECONOMY Today, I don’t own any of my digital assets. If I want to purchase music, a game, a film, a digital collectible, I can’t buy it, I can only lease it into perpetuity. If I want to listen to music I stream it from Spotify, if I want to download this I can, but I can’t resell it, I don’t really own it. As such my purchase has no resale value and thus is not a store of value. For all intents and purposes my ‘asset’ is worthless after I ‘buy’ it and it cannot be traded into fiat. This is not how the physical economy works and is not how it can continue to work if we want to transition to a truly digital / smart economy. WHAT IS NEEDED FOR SCARCITY TO EXIST IN A DIGITAL ECONOMY Two things: 1. Immutable ownership records 2. Security of data file transfer Most people in the blockchain space only consider point 1 here. The typical train of thought is “if I can secure ownership data on a blockchain then boom, digital economy created, problem solved”. This is not true. If we were to consider Bitcoin in the context of a replacement for currency, it actually serves two functions not one. First it registers who owns what (immutable ownership records), and second it provides security for that data as transactions occur so any ‘money’ I send you cannot be copied (security of data file transfer, in this case preventing the double transactions problem). However taking the example of a song, or let’s say a Pokemon in the game Pokemon Go, or any other digital item that could be considered an ‘asset’ but where the data is far more complex, and the distinction between these two problems becomes extremely relevant. Let’s hypothetically say I’m a game developer and make a game equivalent to Pokemon Go. I then decide I’m going to allow my users to trade their Pokemon with each other. Why would I do this? To increase user engagement and time spent in my game, which would allow me to continually sell other in-app purchases (e.g. Pokeballs etc). However what will my users demand of the functionality to buy and sell Pokemon to each other for fiat? Clear ownership of their Pokemon, and the knowledge that no-one can steal/copy them. The Pokemon are just code, the blockchain can keep track of who technically owns which Pokemon but as I send you the Pokemon what happens if someone intercepts the data transfer and copies the code? Well even though ownership of the code is still secured on the blockchain, someone has still stolen the Pokemon and can at the very least use it if not re-sell it. The same concept could apply to a song or any other asset. You still have a form of the double transaction problem, it has another name: piracy. HOW CAN WE ACHIEVE BOTH IMMUTABLE OWNERSHIP AND SECURITY OF DATA FILE TRANSFER? There are a few options as to what could be done to solve this issue: Option 1: Don’t use the blockchain at all, continue to use existing centralized services – aka ‘The World We Live In’
This is the world we live in now. It’s relatively secure (until the centralized service used is hacked and your data/assets stolen from the cloud), but you don’t own your asset, the centralized service does, you just lease it (see Why We Need Scarcity in a Digital Economy above). In our Pokemon example this would just be relying on the developer both to keep a record of who owns what (which they could change) and managing transfer of these Pokemon assets (which could be hacked). You may say ‘oh but I trust the centralized service with this’, ok, but what happens if they go bankrupt? What happens to your assets then when they’re locked away in some central server?
Option 2: Use a centralized service for data storage and file transfer which uses a proprietary blockchain for ownership – aka ‘The Private Blockchain’
This is essentially no different to Option 1 except your ownership of assets is tracked with a blockchain, but this blockchain is centralized and so it’s just another database that the developer in our example has full control over to change. You still don’t really own your Pokemon and they could still be hacked/copied/stolen
Option 3: Use a centralized service for data storage and file transfer which uses a decentralized public blockchain for ownership – aka ‘Amazing if Possible, but Not Feasible’
This would be amazing, if it worked. You could secure ownership records of your assets on a public blockchain (Ethereum, NEO etc) away from the control of a private company who could change them, but the data would sit comfortably in a centralized cloud with greater security that what you can achieve yourself on your personal computer. However the problem is that a) it’s not that secure (iCloud hacks for example), and b) the companies that offer centralized services have zero incentive to facilitate this. Centralized clouds are only incentivized to store your data and assets for you is they can make money off it, and they do that by not giving you ownership of that data/assets and allowing you to lease it back for a fee (again see Why We Need Scarcity in a Digital Economy) above
Option 4: Use your computer for data storage, the internet directly for file transfer and a decentralized public blockchain for ownership – ‘Nice in Theory, Many Security Problems’
This is similar to the argument under ‘What is Needed for Scarcity to Exist in a Digital Economy’ above. Ownership is secured by a public blockchain (Ethereum, NEO etc), but files are stored on your computer and you attempt to send assets through the internet to someone else. You technically have ownership of your assets in totality and no-one else if handling / storing the data for you. However, if you wish to sell/transfer your Pokemon the security of this method is extremely low as you’re passing information directly through the internet (see Kevin Zhang’s video here on why: https://www.youtube.com/watch?v=foHkP19Vp8U). This results in the risk of piracy and thus your Pokemon becoming worthless as there is a risk of it being copied every time you want to sell/transfer it
Option 5: Use a public blockchain for data storage, file transfer and ownership – aka ‘CryptoKitties’
This would be amazing as well, if it worked. This solves both the ownership and data security problems. This is essentially taking the concept of Bitcoin and extrapolating it to put huge quanta of data on-chain. While in theory this could work, in practice CryptoKitties has shown it does not. Rong Chen speaks to this often, the overarching point is if I wanted to put a whole game or complex digital asset on the blockchain, achieving consensus on this would take forever, ledger sizes would balloon and every incremental transaction would make consensus even slower. At some point every consensus node would have the problem of an ever increasing ledger file size which only the largest supercomputers in the world would have the storage and processing speed to handle. This would lead to centralization of nodes / the blockchain and eventually ledger file sizes would get so large that even those supercomputers wouldn’t be able to handle it. Off-chain scaling solutions (Plasma for Ethereum, Trinity for NEO etc) may fix this issue for simple and non-fungible data such as payments, but not for complex data with different attributes such as games or content.
Option 6: Use a decentralized service for data storage and file transfer which uses a decentralized public blockchain for ownership – aka ‘The Holy Grail’
The holy grail. What if immutable ownership and security of data file transfer could be separated while still maintaining their core functions? This is Elastos.
A ledger for decentralized IDs, this will keep track of who you (or your computer) are so that ownership of assets can be tracked back to you
Merged mining with Bitcoin secures the blockchain with the massive hashpower of the Bitcoin network
This blockchain will not handle significant amount of data or transactions as it is not designed to. Scaling is not relevant here as only IDs and basic transactions are stored
DApps, for example a hypothetical Pokemon game, could create a sidechain to track Pokemon transactions and transfer of asset ownership relevant to their app
Chain rules are set by the app according to their transaction throughput needs
Actual transfer of Pokemon code/data when they are bought and sold does not occur through this though, only the record of ownership and payment are stored on-chain
This is Elastos’ P2P network for file transfer. It allows end-to-end transfer of data (e.g. a Pokemon) from one person to another and has nothing to do with the blockchain
Works far better than direct transfer of information through the internet as information put through the internet is routed, can be intercepted as is not end-to-end
Elastos Virtual Machines and Run-Time
This essentially replaces the need for a Cloud to store data to facilitate two people sharing information/files with each other, i.e. it removes the centralized service middleman. Rather than your files being uploaded or your Pokemon being hosted on a Cloud service, the data stays on your computer. If you want to share your data with someone else, you don’t push it through the unsecure internet, instead you run the Elastos Run-Time and your computer becomes a virtual machine, or one node, on a decentralized private network of computers (other users) with each computer providing its own processing capacity. File transfer between these computers can occur with the aid of the Elastos Carrier. Essentially you have a P2P intranet with end-to-end communication between computers.
Are you seeing the matrix yet?.. If not, consider the Pokemon game case. The developer of the game opens up functionality to allow users to buy and sell Pokemon to each other for fiat. Again, why would a developer do this? If the developer gives up ownership of Pokemon to users, it doesn’t make any money off them directly. The developer would do this to benefit indirectly not directly. Adding this functionality would increase engagement and time spent in the game, which it could use to sell users other in-app purchases (Pokeballs etc). However this doesn’t mean the developer is incentivized to incur the additional cost necessary to support that ecosystem with centralized servers hosting all this data etc for secure Pokemon transfer. Ideally the developer could pass this responsibility off to someone else (hint hint the users themselves). Furthermore Pokemon users would want to know their Pokemon are actually theirs and not controlled by a central developer who could take them away at a whim or would disappear if it went bankrupt (back to ownership and security of data to maintain store of value again). Further, they’d want to be able to trade them without slow transaction speeds or crashed networks (CryptoKitties problem). These objectives between both developer and users together rule out Options 1-5 above. So the developer is left with Option 6, i.e. Elastos: Give users a decentralized ID through the Elastos Mainchain, build a DApp on a sidechain that allows for the Pokemon trading transactions throughput needed, but leverage the Elastos Carrier and Run-Time to host file storage transfer in a secure way that costs the developer nothing and which the users maintain themselves in a decentralized way using their own computing power. Everyone wins.
Chances are, you’ve heard about the buzzing prices of cryptocurrencies like Bitcoin but probably know jack about anything else of it. Understanding how Bitcoin and Blockchain technology works can be a bit intimidating and overwhelming for new users into the Crypto-space. But hey, I’m no expert either and I just dabble in it to know enough not to miss out. As someone who aspires to become a digital nomad and travel the world, you may want to consider looking to start now. And here I can show you how easy it is to start with zero knowledge of Bitcoin, Blockchain, and cryptocurrency. If you know how to download an app to your smartphone or tablet. Then you are ready to earn cryptocurrency. You use your smartphone for pretty much everything from communicating, paying bills, watching videos on YouTube all day, looking for restaurants and etc. So why not also use it to make you money every single day and doesn’t cost you anything more but to just download an app? The tides are ever-changing, and to survive, you must sail with the wind. Not against it. Don’t leave free money on the table and read on. Pi Network (Minepi.com) is getting increasingly popular every day and is perhaps one of the fastest-growing networks in the Cryptocurrency world as of 2019. It’s no wonder you would want to get as many members under you as quickly as possible. Mining for Pi Coin cryptocurrency takes almost no effort but to simply make a single tap on the lightning symbol once a day. After that, you can continue to use your phone as normal or shut the screen off. The Pi coin is continuously mined for the next 24 hours in the background of your device without using massive amounts of energy unlike mining for Bitcoin. As the Pi Network continues to grow with 1000’s of new miners signing up every day, the mining rate will be halved accordingly, which means it’ll be harder and slower to get Pi coins. So, it’s quite obvious to be one of those people to get a really early start on this popular rising cryptocurrency. But why am I sharing my secrets? Aren’t you afraid of the competition? No, not really. Because for 1, I am a believer in Pi vision so I want to help it grow by helping you grow. Plus, even if this information is out there, I doubt that everyone who reads this will actually put in the effort to actually grow (please prove me wrong). Please read on and learn the secret! 24h a day 7d a week 168h a week 4 weeks a month 672h a month If the PI coin is listed on markets and the price is at $0,05 you have passive income from $336. If you mine passive 1 PI a hour. Its only one click on your mobile a day.
What Is Pi Network?
Pi Network is a small connected group of people within a security circle stitched along with other smaller security circles to create a “trust graph” that will help users know who to trust and transact with. The security circle is used to validate one’s identity to allow seamlessly and trusted transactions in the Pi cryptocurrency marketplace. This is to secure trust in the network that no fraudulent activities can take place.
The Core Team Members
Dr. Nicolas Kokkalis – Head of Technology Stanford Ph.D. and instructor of Stanford’s first decentralized applications class; combining distributed systems and human-computer interactions to bring cryptocurrency to everyday people. Dr. Chengdiao Fan – Head of Product Stanford Ph.D. in Computational Anthropology harnessing social computing to unlock human potential on a global scale. Vincent McPhillip – Head of Community Yale and Stanford-trained social movement builder on a mission to democratize how society defines, creates, and distributes wealth.
Their Mission is to build a cryptocurrency and smart contracts platform secured and operated by everyday people like us, but with simplicity.
Their vision is to make Cryptomining and spending as easy as “Pie”, making it the world’s most inclusive peer-to-peer marketplace that is fueled by Pi.
· The network has about 70k daily active members mining every day on the Pi Network app and is growing incredibly fast. Once they reach the first threshold of 100k users, they will HALVE the mining rate. That’s right, so mining speed for you will become lesser and lesser as more users join the network. However, if you join today and become a (PI)oneer and help steer the Pi network into the right general direction. You’ll get a larger piece of the PI(E) and grow it into massive savings until it hits the exchange market. · They are going to release an update during Q4 2019 that will enable users to send their Pi coins to any other user on the network. This will be the beginning of seeing the true value of the coin. Personally, for me, I’m all in for the what if factor, especially when all it took was to download a single app. · You don’t have to spend any extra money to mine so long as you have a smartphone or a tablet.
· Invitation Into The Pi Network
· Currently, Pi network is in beta and to join the network is through an invitation code only by someone who is already a member. You can join under my name and be added into my security circle.
What Can You Do with Your Pi Coins?
In the future:
Pioneers can wager Pi to engage the attention of other members of the network, by sharing content (e.g., text, images, videos) or asking questions
Trade Pi coins with other members
Use Pi to purchase goods in the Pi marketplace
Use Pi for advertisement
Exchange Pi for ETH or BTC which can be exchanged into fiat money
Much more as the network grows to mass adoption
As they are in beta now, you get to mine Pi coins at higher rates since there are fewer users on the network. Like Bitcoin for example; mining Bitcoin 10 years ago you would be able to get a few Bitcoin every hour or so. Now, you’ll get somewhere around 0.000001 BTC per hour since there are millions of miners now (mining rate differs for everyone depending on their rig). Think of Pi like in the early stages of Bitcoin when nobody really knew or understood what its technology is really all about. Imagine if you knew then what you know now. Wouldn’t you mine it like crazy? It goes exactly the same for Pi coin.
What is Skywire? Where does it fit in with Skycoin?
Skycoin is a blockchain application platform. We have multiple coins in the platform (Metallicoin, mdl.life, solarbankers.com, etc). We let people launch their own blockchain applications (including coins). There are two parts to Skywire. The first part is the Skywire node. The second part is the hardware. Skywire is one of the first applications we are launching on the Skycoin platform. It is one of our flagship applications that has been in development for several years. Skywire is basically a decentralized ISP on blockchain. It is like Tor, but you are paid to run it. You forward packets for your neighbors and you receive coins You pay coins to other people for forwarding your packets. So it is like Tor but on blockchain and you are paid for running the network. Also, while Tor is slow, Skywire was designed to be faster than the current internet, instead of slower. Skywire is a test application for monetizing excess bandwidth. Eventually the software defined networking technology behind Skywire, will allow us to build physical networks (actual mesh nets) that can begin to replace centralized ISPs. However, the current Skywire prototype is still running over the existing internet, but later we will start building out our own hardware. Skywire is a solution for protecting people’s privacy and is also a solution to net neutrality. If Skycoin can can decentralize the ISPs with blockchain, then we wont have to beg the FCC to protect our rights. Skywire is just a prototype of a larger system. Eventually we will allow people to sell bandwidth, computational resources and storage. On the hardware side, the Skywire Miner is a like a personal cloud, for blockchain applications. It has eight computers in it and you plug it in and you can run your blockchain applications on it. You can even earn coins by renting out capacities to other users on the network.
How would your everyday, average Joe user access the Skywire network? Let's say from their phone…
We designed Skywire and Skycoin to be as usable as possible. We think you should not have to be a software developer to use blockchain applications. Skywire is designed to be “zeroconf”, with zero configuration. You just plug in your node and it works. Its plug and play. Eventually you will be able to buy a Skywire Miner and delegate control of the hardware to a “pool”, who will configure it for you and do all the work, optimize the settings and the pool will just take a small fee for the service and owner of the hardware will receive the rest of the coins their miners are earning. You will just plug in the Skyminer and start earning coins. It will be plug and play. Most users will not know their traffic is being carried over Skywire. Just like they do not know if they are using TCP or UDP. They will just connect their computer to the network with wifi or an ethernet cable and it will work exactly like the internet does now.
Are you completely anonymous on Skywire, or do you need to add a VPN and go through Tor for extra protection?
Skywire is designed, to protect users privacy much better than the existing internet. Each node only knows the previous hop and the next hop for any packet. The contents of the packet are encrypted (like HTTPS), so no one can spy on the data. Since Skywire is designed to be faster than the existing internet, you give up a little privacy for the speed. Tor makes packets harder to trace by reshuffling them and slowing them done. While Skywire is designed for pure speed and performance.
Will Skywire users be able to access traditional internet resources like Google and Facebook over Skywire?
Yes. Most users will not even know they are using Skywire at all. It will be completely invisible to them. Skywire has two modes of operation. One mode looks like the normal internet to the user and the other mode is for special applications designed to run completely inside of the Skywire network. Skywire native apps will have increased privacy, speed and performance, but all existing internet apps will still work on the new network.
How difficult will it be for a traditional e-service to port their products and services to Skywire / Skycoin? Are there plans in place to facilitate those transitions as companies find the exceeding value in joining the free distributed internet?
We are going to make it very easy. Existing companies run their whole internal networks on MPLS and Skywire is almost identical to MPLS, so they wont have to make any changes in most cases.
What is the routing protocol? How are the routes found?
Skywire is source routed. This means that you choose the route your data takes. You can chose routes that offer higher privacy, more bandwidth (for video downloads) or lower latency (for gaming). Skywire puts control of the data back to the user.
I have also understand that the protocols underlying in skywire will be/already are pretty different from the Internet protocols. Taking into account the years of research applied to the current Internet and the several strategies for routing it doesn't seem an easy task to rebuild everything and make it work. Where can be found the information about the routing strategies used in skywire?
The routing strategies are user defined. There is no best routing strategy that is optimal for every user or application. Instead we allow people to choose their routes and policies, based upon the application, time of day, available bandwidth, reliability and other factors. This is actually the way the original internet worked. However, it was scrapped because of the RAM limitations of early computers which only had 4 KB of memory. So the internet was built upon stateless routing protocols because of the limitations of the available computers at the time, not because the networking protocols were the best or highest performance. Today even a cell phone has 4 GB of ram and 1 million times the memory of a computer in the 1980s, so there is no reason to accept these limitations anymore. Our implementation is simpler and faster because we are stripping away the layers of junk that have accumulated. The internet was actually built up piecemeal, without any coherence, coordination or planning. The internet today is a mishmash of different ad-hoc protocols that have been duct taped together over decades, without any real design. Skywire is an re-envisioning of the internet, if it was built today knowing what we know now. This means simplifying the protocols and improving the performance.
How will the routing work if someone from Europe wants to access a video from a node in Australia (for example)? How do the nodes know the next hop if they cant read the origin or destiny of any packet?
If you have a route with N hops, then you contact each of the nodes on the route (through a messaging service) and set the route table on each route. Then when you drop a packet in the route, it gets forwarded automatically. You could have 60 or 120 hops between Australia and Europe and its fine. Each individual node only knows the previous hop and the next hop in the chain. That is all the node needs to know.
Could you estimate a timeline for when Skywire will operate independently from the current ISP infrastructure?
I think Skycoin is a very ambitious project and some parts could take ten or twenty years. Even if we started with a network of a few thousand nodes and we were growing the network over 1% per day, it will still take a decade or two to conquer the Earth. We are going to start with small scale prototypes (neighborhoods), then try cities. I think the first demonstration networks will be working this year.
How will bandwidth be priced in terms of coin hours and who determines this rate?
You could have 40 PHDs each do a thesis on this. The short answer is that an auction model has to be used (similar to Google’s Ad Words auction model) and the auction has to be designed in a way so that the bandwidth prices reach a stable equilibrium. There are parts of Skycoin that are completely open source and public, like the blockchain and consensus algorithm and Skywire. There are secrets like the auction model and pricing, that are designed to protect Skycoin from being forked and to prevent competitors from copying our work. We estimate that if a competitor was to start today, with 2 million dollars a year in R&D, that it would take them a minimum of eight years to develop a working bandwidth pricing model. And from experience in auction models for advertising networks, 80% of the competitors will fail to develop a working model at all. A working, fair, decentralized bandwidth pricing model that was competitive with what we have would take even longer. There are very few people (less than 4) on Earth who have the experience in mathematics, economics, game theory and cryptographic protocols to design the required auction and pricing models. One of Google’s secrets that allows them to dominate the internet advertising industry, is their auction model for ad pricing. That is what allows Google to pay the content producers the most money for their advertising inventory, while charging the advertising buyers the least. Google’s auction models for pricing AdSense inventory are even more secretive and important than Google’s search algorithm. This is one of the most important and secretive parts of Google’s business. Even companies like Facebook, with billion dollar war chests have been unable to replicate to close the algorithm gap in this area. Expertise in these algorithms and their auction and pricing models is one of the reasons that Google has been able to extract advertising premiums over Facebook. Even if a competitor raises a billion dollars and hires all the PHDs in the field and they had ten years to do research, I doubt they would be able to develop anything close to what we have now. The history of bandwidth markets is very interesting and Enron tried to do a trading desk for bandwidth and bandwidth futures and it completely failed. The mathematical stability and predictability of the pricing of bandwidth under adversarial conditions is one of the major problems. For instance, one of our “competitors” suggests that people will be paid coins if someone accesses their content. So why don’t you just put a website and then have 2000 bots go to it, to get free coins! How are they going to stop that. Or if they are pricing bandwidth, if the price is fixed and the price is too low, then people will not build capacity and bandwidth will be insufficient and the network will be slow. Or if the price is variable and adjusts with demands, what will stop someone from buying up the capacity for a link (“Cornering the Market”) to drive the price up 50x on links they control and extort money out of the other people on the network with a fake bandwidth shortage? The pricing algorithm has to be stable under adversarial conditions. It is a very difficult problem, harder than even consensus algorithm research. Even if a competitor had unlimited funding and unlimited time, it is unlikely that they would find a superior solution to what we have and that alone nearly guarantees that we are going to win this market. It gets even more difficult if you need price stability and you admit any type of bandwidth futures, that allow speculation on future prices. This is a kind of problem like Bitcoin consensus algorithm that can only be solved by an act of genius. We have a lot of experience in this area. It is hyper specialized and a very difficult area and is one of the areas that will give Skycoin a strong sustainable advantage.
Will there be a DNS for Skywire to register .sky domains?
Of course. We will definitely add some kind of DNS and name system eventually. Remembering and typing public keys is too difficult. We want to make it as easy as possible. We want people to be able to register aliases (like screen names) so that people can send coins to aliases instead of having to type in addresses every time. This will let people send 5 Skycoin to “@bobcat” instead of sending coins to “23TeSPPJVZ9HvXh6iYiKAaLNQroKg8yCdja”. This will be a revolution in usability.
When operating a Skyminer, will people in my surrounding area see it as a Wifi option on their devices?
You can configure it to expose a wifi access point. It depends on what you are trying to do.
While I plan on running a DIY miner regardless of the payout, will one of the first 6000 DIY miners built to the same spec as the official miner receive a worthwhile payout in Sky coin? What is the requirement for a DIY miner to get whitelisted (and earning Skycoin) on the Skywire testnet?
The reason we have white-listing on the testnet, is to stop too many nodes from joining the network at once. The network can only support so many nodes until we upgrade certain infrastructure (like the messaging/inter-process communication standard). Eventually, all DIY miners will be whitelisted, but there will probably be a queue.
The Sky team is developing antennas by their own instead of buying or using technology already developed, why is such an effort necessary?
You can of course, buy any commercial antenna or wifi system and use it for Skywire. We are developing our own custom antennas, to push performance limitations and experiment with advanced technology, like FPGAs (Field Programmable Arrays) and SDR (Software Defined Radio). Existing wifi has a huge latency (15 milliseconds per hop). We need to make several modification to get that down to 0.5 millisecond per hop. We have several custom PCB boards in development. We have a few secret hardware projects that will be announced when they are ready. For instance, the Skywire Miner was in development for two years before we publicly announced it. Some of our next hardware projects are focused on payments at the point of sale and improving usability, not just the meshnet.
So back in January Steve was asked a question in the skywire group: "Steve, I am not a tech savage, so how can I understand better the safety running a miner if people on the network do DeepWeb stuff? So i will receive and redirect data packets with crazy things and also there is around 128 GB of storage on my miner. How can i have peace of mind of that?" He replied with "If you don’t run an exit node to the open internet it won’t matter you can run relay nodes if you’re worried about it, or proxy specific content." This seems to goes counter to what you mentioned regarding end-to-end encryption with Skywire. Will some people only be relay nodes and some will be exit nodes as well?
I think the question is wrong. You only store content for public keys that you explicitly subscribe to. This means if you do not like particular content or do not want it on your hardware, then you can just blacklist those public keys or don’t subscribe to them. Data never goes on your machine unless you requested it. If you are holding data for a third party such as forwarding packets, it’s always going to be encrypted, so will look like random noise. There will never be anything in the data that causes legal liability. It will look the same as the output of a random number generator.
If using the skyminer, how much bandwidth will be necessary to run it at its best? And what about the router? It's true it has only 100mbits output? Is a 1gigbits connection necessary to reach toprates?
Hold on!!!! Let us get the software and test net running first, lol. We will know once we know what works for the testnet.
What will the price be for future Skynodes (formerly called Skyminers)?
We are working on ways of reducing the cost, such as by buying our own factory, doing custom PCB boards and using different materials. The cheapest Skywire Miner node will be about $30 for a single node miner. We will have a very cheap personal Skywire “hardware VPN” node also. The miners we are shipping now are for powering the network backbone and have 8 computers and are about $800 each. We sold people the miners for 1 BTC each so they can support development, but gave them a Skycoin bonus equal to about 1 BTC worth of Skycoin. Then that money, went to fund the cost for developing the newer hardware.
An attempt at a fully comprehensive look at how to scale bitcoin. Lets bring Bitcoin out of Beta!
WARNING THIS IS GOING TO BE A REALLY REALLY LONG POST BUT PLEASE READ IT ALL. SCALING BITCOIN IS A COMPLEX ISSUE! HOPEFULLY HAVING ALL THE INFO IN ONE PLACE SHOULD BE USEFUL
Like many people in the community I've spent the past month or so looking deeply into the bitcoin scaling debate. I feel there has never been a fully comprehensive thread on how bitcoin could scale. The closest I have seen is gavinandresen's medium posts back in the summer describing the problem and a solution, and pre-emptively answering supposed problems with the solution. While these posts got to the core of the issue and spawned the debate we have been having, they were quite general and could have used more data in support. This is my research and proposal to scale bitcoin and bring the community back together.
There seems to me to be five main fundamental forces at play in finding a balanced solution;
Node Distribution Bandwidth has a relationship to node count and therefore 'node distribution'. This is because if bandwidth becomes too high then fewer people will be able to run a node. To a lesser extent bandwidth also effects 'mining decentralisation' as miners/pool owners also need to be able to run a node. I would argue that the centralisation pressures in relation to bandwidth are negligible though in comparison to the centralisation pressure caused by the usefulness of larger pools in reducing variance. The cost of a faster internet connection is negligible in comparison to the turnover of the pools. It is important to note the distinction between bandwidth required to propagate blocks quickly and the bandwidth required to propagate transactions. The bandwidth required to simply propagate transactions is still low today. New node time (i.e. the time it takes to start up a new node) also has a relationship with node distribution. i.e. If it takes too long to start a new node then fewer people will be willing to take the time and resources to start a new node. Storage Space also has a relationship with node distribution. If the blockchain takes up too much space on a computer then less people will be willing to store the whole blockchain. Any suitable solution should look to not decrease node distribution significantly. Mining Decentralisation Broadcast time (the time it takes to upload a block to a peer) has a relationship with mining centralisation pressures. This is because increasing broadcast time increases the propagation time, which increases the orphan rate. If the orphan rate it too high then individual miners will tend towards larger pools. Validation time (the time it to validate a block) has a relationship with mining centralisation pressures. This is because increasing validation time increases the propagation time, which increases the orphan rate. If the orphan rate it too high then individual miners will tend towards larger pools. Any suitable solution should look to not increase mining centralisation significantly. Network Utility Network Utility is one that I find is often overlooked, is not well understood but is equally as important. The network utility force acts as a kind of disclaimer to the other two forces. It has a balancing effect. Increasing the network utility will likely increase user adoption (The more useful something is, the more people will want to use it) and therefore decreasing network utility will likely decrease user adoption. User adoption has a relationship with node count. i.e. the more people, companies and organisations know about and use bitcoin, the more people, companies and organisations that will run nodes. For example we could reduce block size down to 10KB, which would reduce broadcast time and validation time significantly. This would also therefore reduce mining centralisation pressures significantly. What is very important to realise though is that network utility would also be significantly be reduced (fewer people able to use bitcoin) and therefore so would node distribution. Conversely, if we increased the block size (not the limit) right now to 10GB, the network utility would be very high as bitcoin would be able to process a large number of transactions but node distribution would be low and mining centralisation pressures would be high due to the larger resource requirements. Any suitable solution should look to increase network utility as time increases. Time Time is an important force because of how technology improves over time. Technology improves over time in a semi-predicable fashion (often exponential). As we move through time, the cost of resources required to run the bitcoin network (if the resource requirements remained static) will decrease. This means that we are able to increase resource requirements proportional to technological improvements/cost reductions without any increase in costs to the network. Technological improvements are not perfectly predictable though so it could be advantageous to allow some buffer room for when technological improvements do not keep up with predictions. This buffer should not be applied at the expense of the balance between the other forces though (i.e. make the buffer too big and network utility will be significantly decreased).
Adoption Increasing adoption means more people using the bitcoin/blockchain network. The more people use bitcoin the more utility it has, and the more utility Bitcoin has the more people will want to use it (network effect). The more people use bitcoin, the more people there that have an incentive to protect bitcoin. Any suitable solution should look to increase adoption as time increases.
The Solution Proposed by some of the bitcoin developers - The Lightning Network
The Lightning Network (LN) is an attempt at scaling the number of transactions that can happen between parties by not publishing any transaction onto the blockchain unless it is absolutely necessary. This is achieved by having people pool bitcoin together in a "Channel" and then these people can transact instantly within that channel. If any shenanigans happen between any of the parties, the channel can be closed and the transactions will be settled on the blockchain. The second part of their plan is limit the block size to turn bitcoin into a settlement network. The original block size limit of 1MB was originally put in place by Satoshi as an anti-DOS measure. It was to make sure a bad actor could not propagate a very large block that would crash nodes and increase the size of the blockchain unnecessarily. Certain developers now want to use this 1MB limit in a different way to make sure that resource requirements will stay low, block space always remains full, fees increase significantly and people use the lightning network as their main way of transacting rather than the blockchain. They also say that keeping the resource requirements very low will make sure that bitcoin remains decentralised. Problems with The Lightning Network The LN works relatively well (in theory) when the cost and time to publish a set of transactions to the network are kept low. Unfortunately, when the cost and time to publish a set of transactions on the blockchain become high, the LN's utility is diminished. The trust you get from a transaction on the LN comes only from the trustless nature of having transactions published to the bitcoin network. What this means is that if a transaction cannot be published on the bitcoin network then the LN transaction is not secured at all. As transactions fees rise on the bitcoin blockchain the LN utility is diminished. Lets take an example:
Cost of publishing a transaction to the bitcoin network = $20
LN transaction between Bob and Alice = $20.
Transaction between Bob and Alice has problem therefore we want to publish it to the blockchain.
Amount of funds left after transaction is published to the blockchain = $20 - $20 = $0.
This is also not a binary situation. If for example in this scenario, the cost to publish the transaction to blockchain was $10 then still only 50% of the transaction would be secure. It is unlikely anyone really call this a secure transaction. Will a user make a non-secured/poorly secured transaction on the LN when they could make the same transaction via an altcoin or non-cryptocurrency transaction and have it well secured? It's unlikely. What is much more likely to happen is that transaction that are not secured by bitcoin because of the cost to publish to the blockchain will simply overflow into altcoins or will simply not happen on any cryptocurrency network. The reality is though, that we don't know exactly what will happen because there is no precedent for it. Another problem outside of security is convenience. With a highly oversaturated block space (very large backlog of transactions) it could take months to have a transaction published to the blockchain. During this time your funds will simply be stuck. If you want to buy a coffee with a shop you don't have a channel open with, instead of simply paying with bitcoin directly, you would have to wait months to open a channel by publishing a transaction to the bitcoin blockchain. I think your coffee might be a little cold by then (and mouldy). I suggest reading this excellent post HERE for other rather significant problems with the LN when people are forced to use it. The LN is currently not complete and due to its high complexity it will take some time to have industry wide implementation. If it is implemented on top of a bitcoin-as-a-settlement-network economy it will likely have very little utility. Uses of The LN The LN is actually an extremely useful layer-2 technology when it is used with it's strengths. When the bitcoin blockchain is fast and cheap to transact on, the LN is also extremely useful. One of the major uses for the LN is for trust-based transactions. If you are transacting often between a set of parties you can truly trust then using LN makes absolute sense since the trustless model of bitcoin is not necessary. Then once you require your funds to be unlocked again it will only take a short time and small cost to open them up to the full bitcoin network again. Another excellent use of LN would be for layer-3 apps. For example a casino app: Anyone can by into the casino channel and play using real bitcoins instantly in the knowledge that is anything nefarious happens you can instantly settle and unlock your funds. Another example would be a computer game where you can use real bitcoin in game, the only difference is that you connect to the game's LN channel and can transact instantly and cheaply. Then whenever you want to unlock your funds you can settle on the blockchain and use your bitcoins normally again. LN is hugely more powerful, the more powerful bitcoin is. The people making the LN need to stick with its strengths rather than sell it as an all-in-one solution to bitcoin's scaling problem. It is just one piece of the puzzle.
Improving Network Efficiency
The more efficient the network, the more we can do with what we already have. There are a number of possible efficiency improvements to the network and each of them has a slightly different effect. Pruning Pruning allows the stored blockchain size to be reduced significantly by not storing old data. This has the effect of lowering the resource requirements of running a node. a 40GB unpruned blockchain would be reduced in size to 550MB. (It is important to note that a pruned node has lower utility to the network) Thin Blocks Thin blocks uses the fact that most of the nodes in the network already have a list of almost all the same transactions ready to be put into the blockchain before a block is found. If all nodes use the same/similar policy for which transactions to include in a block then you only need to broadcast a small amount of information across the network for all nodes to know which transactions have been included (as opposed to broadcasting a list of all transactions included in the block). Thin Blocks have the advantage of reducing propagation which lowers the mining centralisation pressure due to orphaned blocks. libsecp256k1libsecp256k1 allows a more efficient way of validating transactions. This means that propagation time is reduced which lowers the mining centralisation pressure due to orphaned blocks. It also means reduced time to bootstrap the blockchain for a new node. Serialised Broadcast Currently block transmission to peers happens in parallel to all connected peers. Obviously for block propagation this is a poor choice in comparison to serial transmission to each peer one by one. Using parallel transmission means that the more peers you have, the slower the propagation, whereas serial transmission does not suffer this problem. The problem that serial transmission does suffer from though is variance. If the order that you send blocks to peers in is random, then it means sometimes you will send blocks to a peer who has a slow/fast connection and/or is able to validate slowly/quickly. This would mean the average propagation time would increase with serialised transmission but depending on your luck you would sometimes have faster propagation and sometimes have slower propagation. As this will lower propagation time it will also lower the mining centralisation pressure due to orphaned blocks. (This is just a concept at the moment but I don't see why it couldn't be implemented). Serialised Broadcast Sorting This is a fix for the variance that would occur due to serialised broadcast. This sorts the order that you broadcast a block to each peer into; fastest upload + validation speed first and slowest upload speed and validation speed last. This not only decreases the variance to zero but also allows blocks to propagation to happen much faster. This also has the effect of lowering the mining centralisation pressure due to orphaned blocks. (This is just a concept at the moment but I don't see why it couldn't be implemented). Here is a table below that shows roughly what the effects these solutions should have.
New Node Time
(The "multiplier" shows how many times higher the block size could be relative to the specific function.)
The Factors in Finding a Balanced Solution
At the beginning of this post I detailed a relatively simple framework for finding a solution by describing what the problem is. There seems to me to be five main fundamental forces at play in finding a balanced solution; 'node distribution', 'mining decentralisation', 'network utility', 'time' and 'adoption'. The optimal solution needs to find a balance between all of these forces taking into account a buffer to offset our inability to predict the future with absolute accuracy. To find a suitable buffer we need to assign a set of red line values which certain values should not pass if we want to make sure bitcoin continues to function as well as today (at a minimum). For example, percentage of orphans should stay below a certain value. These values can only be a best estimate due to the complexity of bitcoin economics, although I have tried to provide as sound reasoning as possible. Propagation time It seems a fair limit for this would be roughly what we have now. Bitcoin is still functioning now. Could mining be more decentralised? Yes, of course, but it seems bitcoin is working fine right now and therefore our currently propagation time for blocks is a fairly conservative limit to set. Currently 1MB blocks take around 15 seconds to propagate more than 50% of the network. 15 second propagation time is what I will be using as a limit in the solution to create a buffer. Orphan Rate This is obviously a value that is a function of propagation time so the same reasoning should be used. I will use a 3% limit on orphan rate in the solution to create a buffer. Non-Pruned Node Storage Cost For this I am choosing a limit of $200 in the near-term and $600 in the long-term. I have chosen these values based on what I think is a reasonable (maximum) for a business or enthusiast to pay to run a full node. As the number of transactions increases as more people use bitcoin the number of people willing to pay a higher price to run a node will also increase although the percentage of people will decrease. These are of course best guess values as there is no way of knowing exactly what percentage of users are willing to pay what. Pruned Node Storage Cost For this I am choosing a limit of $3 in the near-term (next 5 years) and $9 in the long-term (Next 25 years). I have chosen these values based on what I think is a reasonable (maximum) for normal bitcoin user to pay. In fact this cost will more likely be zero as almost all users have an amount of storage free on their computers. Percentage of Downstream Bandwidth Used This is a best guess at what I think people who run nodes would be willing to use to be connected to the bitcoin network directly. I believe using 10% (maximum) of a users downstream bandwidth is the limit of what is reasonable for a full node (pruned and non-pruned). Most users would continue to access the blockchain via SPV wallets though. Downstream is generally a much more valuable resource to a user than upstream due to the nature of the internet usage. Percentage of Upstream Bandwidth Used This is a best guess at what I think people who run nodes would be willing to use to be connected to the bitcoin network directly. I believe using 25% (maximum) of a users downstream bandwidth is the limit of what is reasonable for a full node (pruned and non-pruned). Most users would continue to access the blockchain via SPV wallets though. Upstream is generally a much less valuable resource to a user than downstream due to the nature of the internet usage. Time to Bootstrap a New Node My limit for this value is at 5 days using 50% of downstream bandwidth in the near-term and 30 days in the long-term. This seems like a reasonable number to me for someone who wants to start running a full node. Currently opening a new bank account takes at least week until everything is set up and you have received your cards, so it seems to me people would be willing to wait this long to become connected. Again, this is a best guess on what people would be willing to do to access the blockchain in the future. Most users requiring less security will be able to use an SPV wallet. It is important to note that we only need enough nodes to make sure the blockchain is distributed across many places with many backups of the full blockchain. It is likely that a few thousand is a minimum for this. Increasing this amount to hundreds of thousands or millions of full nodes is not necessarily that much of an advantage to node distribution but could be a significant disadvantage to mining centralisation. This is because the more nodes you have in the network, the longer it takes to propagate >50% of it. Storage Cost Price Reduction Over Time Storage cost follows a linear logarithmic trend. Costs of HDD reducing by 10 times every 5 years, although this has slowed over the past few years. This can be attributed to the flooding in South East Asia and the transition to SSD technology. SSD technology also follows the linear logarithmic trend of costs reducing 10 times every 5 years, or roughly decreasing 37% per year. Average Upload and Download Bandwidth Increases Over Time Average upload and download bandwidth increases in a linear logarithmic trend. Both upload and download bandwidth follow the same trend of doubling roughly every two years, or increasing 40% per year. Price I was hesitant to include this one here but I feel it is unavoidable. Contrary to what people say (often when the price is trending downwards) bitcoin price is an extremely important metric in the long-term. Depending on bitcoin's price, bitcoin's is useful to; enthusiasts->some users->small companies->large companies->nations->the world, in roughly that order. The higher bitcoin's price is the more liquid the market will be and the more difficult it will be to move the price, therefore increasing bitcoin's utility. Bitcoin's price in the long-term is linked to adoption, which seems to happen in waves, as can be seen in the price bubbles over the years. If we are planning/aiming for bitcoin to at least become a currency with equal value to one of the worlds major currencies then we need to plan for a market cap and price that reflect that. I personally think there are two useful targets we should use to reflect our aims. The first, lower target is for bitcoin to have a market cap the size of a major national currency. This would put the market cap at around 2.1 trillion dollars or $100,000 per bitcoin. The second higher target is for bitcoin to become the world's major reserve currency. This would give bitcoin a market cap of around 21 trillion dollars and a value of $1,000,000 per bitcoin. A final, and much more difficult target is likely to be bitcoin as the only currency across the world, but I am not sure exactly how this could work so for now I don't think this is worth considering.
As price increases, so does the subsidy reward given out to miners who find blocks. This reward is semi-dynamic in that it remains static (in btc terms) until 210,000 blocks are found and then the subsidy is then cut in half. This continues to happen until all 21,000,000 bitcoins have been mined. If the value of each bitcoin increases faster than the btc denominated subsidy decreases then the USD denominated reward will be averagely increasing. Historically the bitcoin price has increased significantly faster than subsidy decreases. The btc denominated subsidy halves roughly every 4 years but the price of bitcoin has historically increased roughly 50 fold in the same time.
Bitcoin adoption should happen in a roughly s-curve dynamic like every other technology adoption. This means exponential adoption until the market saturation starts and adoption slows, then the finally is the market becomes fully saturated and adoption slowly stops (i.e. bitcoin is fully adopted). If we assume the top of this adoption s-curve has one of the market caps above (i.e. bitcoin is successful) then we can use this assumption to see how we can transition from a subsidy paid network to a transaction fee paid network. Adoption Adoption is the most difficult metric to determine. In fact it is impossible to determine accurately now, let alone in the future. It is also the one of the most important factors. There is no point in building software that no one is going to use after all. Equally, there is no point in achieving a large amount of adoption if bitcoin offers none of the original value propositions. Clearly there is a balance to be had. Some amount of bitcoin's original value proposition is worth losing in favour of adoption, and some amount of adoption is worth losing to keep bitcoin's original value proposition. A suitable solution should find a good balance between the two. It is clear though that any solution must have increased adoption as a basic requirement, otherwise it is not a solution at all.
One major factor related to adoption that I rarely see mentioned, is stability and predictability. This is relevant to both end users and businesses. End users rely on stability and predictability so that they do not have to constantly check if something has changed. When a person goes to get money from a cash machine or spend money in a shop, their experience is almost identical every single time. It is highly dependable. They don't need to keep up-to-date on how cash machines or shops work to make sure they are not defrauded. They know exactly what is going to happen without having to expend any effort. The more deviation from the standard experience a user experiences and the more often a user experiences a deviation, the less likely a user is going to want to continue to use that service. Users require predictability extending into the past. Businesses who's bottom line is often dependent on reliable services also require stability and predictability. Businesses require predictability that extends into the future so that they can plan. A business is less likely to use a service for which they do not know they can depend on in the future (or they know they cannot depend on). For bitcoin to achieve mass adoption it needs a long-term predictable and stable plan for people to rely on.
This proposal is one based on determining a best fit balance of every factor and a large enough buffer to allows for our inability to perfectly predict the future. No one can predict the future with absolutely certainty but it does not mean we cannot make educated guesses and plan for it.
The first part of the proposal is to spend 2016 implementing all available efficiency improvements (i.e the ones detailed above) and making sure the move to a scaled bitcoin happens as smoothly as possible. It seems we should set a target of implementing all of the above improvements within the first 6 months of 2016. These improvements should be implemented in the first hardfork of its kind, with full community wide consensus. A hardfork with this much consensus is the perfect time to test and learn from the hardforking mechanism. Thanks to Seg Wit, this would give us an effective 2 fold capacity increase and set us on our path to scalability.
The second part of the proposal is to target the release of a second hardfork to happen at the end of 2016. Inline with all the above factors this would start with a real block size limit increase to 2MB (effectively increasing the throughput to 4x compared to today thanks to Seg Wit) and a doubling of the block size limit every two years thereafter (with linear scaling in between). The scaling would end with an 8GB block size limit in the year 2039.
How does the Proposal fit inside the Limits
Propagation time If trends for average upload and bandwidth continue then propagation time for a block to reach >50% of the nodes in the network should never go above 1s. This is significantly quickly than propagation times we currently see. In a worst case scenario we can we wrong in the negative direction (i.e. bandwidth does not increase as quickly as predicted) by 15% absolute and 37.5% relative (i.e. bandwidth improves at a rate of 25% per year rather than the predicted 40%) and we would still only ever see propagation times similar to today and it would take 20 years before this would happen. Orphan Rate Using our best guess predictions the orphan rate would never go over 0.2%. In a worst case scenario where we are wrong in our bandwidth prediction in the negative direction by 37.5% relative, orphan rate would never go above 2.3% and it would take over 20 years to happen. Non-Pruned Node Storage Cost Using our best guess predictions the cost of storage for a non-pruned full node would never exceed $40 with blocks consistently 50% full and would in fact decrease significantly after reaching the peak cost. If blocks were consistently 100% full (which is highly unlikely) then the maximum cost of an un-pruned full node would never exceed $90. In a worst case scenario where we are wrong in our bandwidth prediction in the negative direction by 37.5% relative and we are wrong in our storage cost prediction by 20% relative (storage cost decreases in cost by 25% per year instead of the predicted 37% per year), we would see a max cost to run a node with 50% full blocks of $100 by 2022 and $300 by 2039. If blocks are always 100% full then this max cost rises to $230 by 2022 and $650 in 2039. It is important to note that for storage costs to be as high as this, bitcoin will have to be enormously successful, meaning many many more people will be incentivised to run a full node (businesses etc.) Pruned Node Storage Cost Using our best guess predictions the cost of storage for a pruned full node would never exceed $0.60 with blocks consistently 50% full. If blocks were consistently 100% full (which is highly unlikely) then the max cost of an un-pruned full node would never exceed $1.30. In a worst case scenario where we are wrong in our bandwidth prediction in the negative direction by 37.5% relative and we are wrong in our storage cost prediction by 20% relative (storage cost decreases in cost by 25% per year instead of the predicted 37% per year), we would see a max cost to run a node with 50% full blocks of $1.40 by 2022 and $5 by 2039. If blocks are always 100% full then this max cost rises to $3.20 by 2022 and $10 in 2039. It is important to note that at this amount of storage the cost would be effectively zero since users almost always have a large amount of free storage space on computers they already own. Percentage of Downstream Bandwidth Used Using our best guess predictions running a full node will never use more than 0.3% of a users download bandwidth (on average). In a worst case scenario we can we wrong in the negative direction by 37.5% relative in our bandwidth predictions and we would still only ever see a max download bandwidth use of 4% (average). Percentage of Upstream Bandwidth Used Using our best guess predictions running a full node will never use more than 1.6% of a users download bandwidth (on average). In a worst case scenario we can we wrong in the negative direction by 37.5% relative in our bandwidth predictions and we would only ever see a max download bandwidth use of 24% (average) and this would take over 20 years to occur. Time to Bootstrap a New Node Using our best guess predictions bootstrapping a new node onto the network should never take more than just over a day using 50% bandwidth. In a worst case scenario we can we wrong in the negative direction by 37.5% relative in our bandwidth predictions and it would take one and 1/4 days to bootstrap the blockchain using 50% of the download bandwidth. By 2039 it would take 16 days to bootstrap the entire blockchain when using 50% bandwidth. I think it is important to note that by this point it is very possible the bootstrapping the blockchain could very well be done by simply buying an SSD with blockchain already bootstrapped. 16 days would be a lot of time to download software but it does not necessarily mean a decrease in centralisation. As you will see in the next section, if bitcoin has reached this level of adoption, there may well be many parties will to spend 16 days downloading the blockchain. What if Things Turn Out Worse than the Worse Case? While it is likely that future trends in the technology required to scale bitcoin will continue relatively similar to the past, it is possible that the predictions are completely and utterly wrong. This plan takes this into account though by making sure the buffer is large enough to give us time to adjust our course. Even if no technological/cost improvements (near zero likelihood) are made to bandwidth and storage in the future this proposal still gives us years to adjust course.
What Does This Mean for Bitcoin?
Significantly Increased Adoption For comparison, Paypal handles around 285 transactions per second (tps), VISA handles around 2000tps and the total global non-cash transactions are around 12,400tps. Currently bitcoin is capable of handling a maximum of around 3.5 transactions every second which are published to the blockchain roughly every 10 minutes. With Seg Wit implemented via a hardfork, bitcoin will be capable or around 7tps. With this proposal bitcoin will be capable of handling more transactions than Paypal (assuming Paypal experiences growth of around 7% per year) in the year 2027. Bitcoin will overtake VISA's transaction capability by the year 2035 and at the end of the growth cycle in 2039 it will be able to handle close to 50% of the total global non-cash transactions. When you add on top second layer protocols( like the LN), sidechains, altcoins and off-chain transactions, there should be more than enough capacity for the whole world and every possible conceivable use for digital value transfer. Transitioning from a Subsidy to a Transaction Fee Model Currently mining is mostly incentivised by the subsidy that is given by the network (currently 25btc per block). If bitcoin is to widely successful it is likely that price increases will continue to outweigh btc denominated subsidy decreases for some time. This means that currently it is likely to be impossible to try to force the network into matching a significant portion of the subsidy with fees. The amount of fees being paid to miners has averagely increased over time and look like they will continue to do so. It is likely that the optimal time for fees to start seriously replacing the subsidy is when bitcoin adoption starts to slow. Unless you take a pessimistic view of bitcoin (thinking bitcoin is as big as it ever will be), it is reasonable to assume this will not happen for some time. With this proposal, using an average fee of just $0.05, total transaction fees per day would be:
Year 2020 = $90,720
Year 2025 = $483,840.00
Year 2030 = $2,903,040.00
Year 2035 = $15,482,880.00
Year 2041 = $123,863,040.00 (full 8GB Blocks)
Miners currently earn a total of around $2 million dollars per day in revenue, significantly less than the $124 million dollars in transaction fee revenue possible using this proposal. That also doesn't include the subsidy which would still play some role until the year 2140. This transaction fee revenue would be a yearly revenue of $45 billion for miners when transaction fees are only $0.05 on average.
Proposal Data You can use these two spreadsheets (1 - 2 ) to see the various metrics at play over time. The first spreadsheet shows the data using the predicted trends and the second spreadsheet shows the data with the worst case trends.
It's very clear we are on the edge/midst of a community (and possibly a network) split. This is a very dangerous situation for bitcoin. A huge divide has appeared in the community and opinions are becoming more and more entrenched on both sides. If we cannot come together and find a way forward it will be bad for everyone except bitcoin's competition and enemies. While this proposal is born from an attempt at finding a balance based on as many relevant factors as possible, it also fortunately happens to fall in between the two sides of the debate. Hopefully the community can see this proposal as a way of making a compromise, releasing the entrenchment and finding a way forward to scale bitcoin. I have no doubt that if we can do this, bitcoin will have enormous success in the years to come.
$ du -hs .bitcoin/ 125G .bitcoin/ I am using ZFS. Turned off compression after I noticed that this is a unnecessary bottleneck. Not sure how much of the data is compressed. After blockchain was synced it takes little system resources and my computer is usable for other things (like browsing Reddit and watching CoinMarketCap compulsively). 1. Install Bitcoin-Qt Since version 0.9, Bitcoin-Qt was renamed to Bitcoin Core t o reduce confusion between Bitcoin-the-network and Bitcoin-the-software. Bitcoin Core is a full Bitcoin client. It is a thick client, meaning it requires the full blockchain (explained below) on local disk to operate and expose blockchain back to the network to help relay and verify transactions. Dude have you ever tried to download the blockchain it takes ages, at first it goes fast for 2 days then it slows down to 0,03% speed per hours (mean weeks/months to complete) its innacceptable that this takes so long. Nobody in the right mind will wait 1,5-2 Months to download it. I wanted to support the network with a full node since i see the danger of all people using only smartphone+light ... Bitcoin Cash raised the block size of the blocks, which are issued every 10 minutes, thus giving higher throughput per 10 minutes. An average transfer still takes on average about 5 minutes. However, a blockchain that includes larger blocks becomes frequently difficult to completely download and sync. People with a limited internet connection ... I'm trying to setup my own Bitcoin node on Ubuntu 16.04.1 LTS.. Right now, I've stuck with blockchain synchronization. I'm letting bitcoind to run every day for at least 10-12 hours while I work and it already takes three days to download 83% of the entire data.. I have very good Internet connection, it should take no more than two hours to download 80 GB of data, however, it's taking at least ...
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