Peter Rizun's Lightning Critique: FUD ... - What Bitcoin Did
Peter Rizun's Lightning Critique: FUD ... - What Bitcoin Did
Eine Schwalbe macht noch keinen Sommer. Oder doch ...
[Exclusive Bitcoin Blockchain Breakdown] Correcting the ...
Bitcoin Testnet Mining CryptoCoins Info Club
[Exclusive Bitcoin Blockchain Breakdown] Correcting the ...
Peter R. Rizun:"Given Lightning's design and BTC's fees, it's inevitable that regular users will use custodial wallets. Bitcoin was designed for regular users to easily use non-custodial SPV wallets, which unfortunately are no longer fashionable..."
Peter R. Rizun: "The average user can be their own bank and verify their own transactions with a SPV wallet, that requires no more data than a SMS text message package for a dumb phone in Nepal. This will always be true regardless of how big blocks get. See Section 8 of the bitcoin white paper."
Let's have a show of hands - Who supports the IFP (dev-tax)?
Or, more importantly, who is against it? It seems to me that almost the entire community is against this major change but it would be good if this is made clear in one place. It seems also that most of the people against this are well-known OG bitcoiners. If you are against the current proposal as outlined by BitcoinABC HERE please make a top-level comment below (i.e. not a reply to another comment) stating:
If you run a BCH business, piece of infrastructure or project please add:
- from [INSERT PROJECT NAME]
I will add all names to a list below. It is important to know this as this is what BCH is potentially set to lose should this go through. My hope is that if miners can see how much of the ecosystem is against this then they will reconsider.
We must become organised to stop a corruption of the BCH protocol
Yesterday BitcoinABC released version 0.21 of their client. In this release a consensus rule is included that requires all BCH miners to pay5% of their block subsidyand5% of the fees they receive to a set of up to 4 BCH addresses. These addresses are controlled by:
This significant change in the protocol is to be activated using a BIP9 method. It will activate when at least 66% of 2016 blocks are produced by miners running their new release. There is no end date for the tax once it has been activated, so it will go on indefinitely unless manually removed with another hardfork. This is occurring in the context of an almost unanimous opposition by the BCH ecosystem of businesses, miners, projects and users. This is something that they are fully aware of and have decided to ignore and push ahead anyway. While it is of course true that the community needs to make sure there is sufficient funding for the projects within the BCH ecosystem that deserve it, and that the funding is provided voluntarily, there are currently numerous efforts under way to create software that makes this as simple as possible. For example, Flipstarter, U-DID, , and pool Donations. There is also a significant amount of will in the community to provide funding if sensible and concrete proposals are put forward. This change is not only a fundamental change to the properties of Bitcoin as described in the original whitepaper, but has the high likelihood of causing a major split if the entire ecosystem does not work towards stopping it from happening. Many of us are now organising an effort to oppose this fundamental change. We need as much of the ecosystem as possible to put their effort into stopping this if you don't want this to happen, so please join us at:
First, I want to say that I believe that Bitcoin (BTC) will moon and that lambo will rain, for several reasons that I won’t explain here and now. So please don't shit on me or down vote this post without explaining yourself properly. I'm saying this because the crypto community is full of young and emotional person insulting each other all the time without being able to explain their view clearly. I’m just sharing my story and my opinion, if I say something wrong, please let me know. No need to be emotional. My story: I’m French (Forgive my English), a software engineer, working from home, previously in the banking industry, big noob in blockchain code related. I have been supporting bitcoin for a couple of times now, unfortunately I discovered it a bit late, promoting it to people around me as the peer to peer cash system and hoping that it will give us our financial freedom. During this bear market and after losing a big part of my coins, I finally took the time to get a better understanding of each coin I’m holding and I quickly realised that Bitcoin Cash wasn’t a scam, that Bitcoin BTC is purely a speculative asset, the playground of professional traders, used to rekt noobs and that Lightning network will end as custodial wallets because no one will take the time/risk for opening/closing/securing a channel, especially poor people (few billions). There is no benefit for the average user in maintaining a LN node. I believe it will be more interesting to mine Bitcoin rather than maintaining a LN node. So basically, I lost faith in the promise made by the Lightning Network which made me focusing on why Bitcoin Cash is the answer to a decentralized peer-to peer electronic cash system. I can confess that in the past I used to believe that second layer solution was the solution for everything, but I changed my mind. To make it simple, BCH allows to make instant payment for very cheap whereas BTC can’t and won’t. For each crypto project, I look at those different points: 1. Length of the chain BTC and BCH are sharing the longest chain, it has been working well without any issues since now 10 years. No other project has such a good track record. This make me feel confident that the chance that this will continue to work as well for years or decades. 2. Community behind it A good community for me is when you see technical people, risking their reputation/identity by posting videos, writing stuff and talking in public events about the project they support. Based on that, I believe the BCH community is the biggest of all. By technical people I mean someone talking using technical approach to back their opinion rather than beliefs based on emotions. Usually in the crypto space, those people are developers but it’s not always the case. I made a small list of technical people supporting BCH: -Peter R. Rizun: Chief Scientist, Bitcoin Unlimited. -Vitalik Butterin (he often showed his support regarding BCH but didn’t produce any content) -Jonald Fyookball: Electron Cash Developer -Jonathan Toomim: Bitcoin cash developer who made interesting proof regarding scaling onchain) -George Hotz: no need to present this awesome crazy dude! -Amaury Séchet: Bitcoin Cash Developer and French! 😊 -Rick Falkvinge: Founder of the swedish pirate party, watch his youtube channel. -Gabriel Cardona (Bitcoin cash developer) -Justin Bons : Founder & CIO of Cyber Capital -Dr. Mark B. Lundeberg: Developer researcher And there is a lot more, but those people are people that I personally trust for their work they shared and that I like following. Recently we had the Bitcoin cash city conference, another event full of people supporting BCH, that kind of thing doesn’t happen with other crypto. So many brilliant people supporting BCH, how could it be possible that all those guys are supporting a scam or a shitcoin. As well, there is often meetups and conferences all over the world. The developer community is not centralized, there is multiple teams (BitcoinABC, Bitcoin Unlimited, BCHD, Bcash, Bitcoin Verde…) independent of each other arguing sometimes about technical and political stuff, this ensure that developments and important decisions are not centralized. I find this very healthy. If a fork occurs, it’s not a problem, it will simply double your coin and allows two different ways of thinking to grow and compete. This won’t happen in Bitcoin (BTC) anymore, the way of thinking is centralized for BTC, they all share the same view: the segwit workaround + small block + layer 2 = (moon + lambo) in 18 months. Regarding CSW, I don’t believe in this guy for now but maybe I’m wrong, maybe this guy is wrongly understood but based on all the things I know about him, he seems too complicated to be someone honest. Honesty comes with simplicity. Finally, regarding Roger Ver: He is hated a lot and I still don't understand why, I feel sorry for him, I really tried my best to hate him like the crowd, but I couldn’t find any reasons. Many people are saying that he is lying and scamming people but none of them are technically able to explain why. It's really a crazy story and I understand why some people call him "Bitcoin Jesus". I personally think he is doing a great job and I thank him. 3. The current and future adoption BCH is used by reel people and reel shops (check the bitcoin cash map), there are transactions on the network to buy and sell real things that exist in the real world. Can you believe this? Maybe the only blockchain having that. Please let me know if you know another blockchain which is today serving the real world. The Bitcoin cash wallet app is easy and exciting to use. Same for the app for merchant. This can be used by my old mum! The BCH roadmap shows that more features will be added to simplify and enhance the user experience. I can’t find other blockchain having that level of user friendliness. Recently Roger Ver announced HTC mobile phone with a BCH wallet preinstalled. I read as well that Burger King is accepting BCH, but I haven’t verified if this was legit or not. 4. Existing features and roadmap -Multiple wallets built on all platform. -Bitcoin Cash point of sales: this app is the app that merchant should use to accept Bitcoin, as well very easy to use and takes 5min to install. -Cash shuffle with Cash fusion allowing to transact anonymously, making BCH competing with privacy focused coins such like Zcash, Monero, Dash. I heard this function will be implemented as well on mobile devices. -SLP token: The simplicity of creating a token and sending dividends make BCH a bit competing with all smart blockchain. Anyone can create a token, raise funds and send dividends easily and it works! Will Bitcoin Cash evolve to a smart economy? -memo.cash: A social network stored on the blockchain, fixing the problem of censorship we have on reddit for example. I recently discovered it, it’s awesome to know that you can write whatever you want, and nobody will be able to delete it and this forever. It’s really an awesome experience. I invite you to test it. For example, yesterday I had fun creating, sending token and being tipped in BCH or in any token by random people, it really shows the potential of BCH. I think I made around 50 on chain transactions in less than one hour with less than 10 cents. -Stable coins: We can build stable coin on BCH; this is something very important as well. Regarding the roadmap: It’s well described on bitcoincash.org and looks promising, but no update since the last 5 months. Not sure if it’s normal. 5. Security SHA256 based algorithm are I believe the most secure, I don’t think we need to add more regarding this. Maybe someone can help me to find some downside regarding security, often some people talk about the potential 51% attack that could occurs on BCH but I couldn’t manage to have my own opinion regarding this. Regarding the double spending attack because of the zero confirmation, I have asked many people to explain to me how this could potentially be a problem for a real merchant. I think that small and insignificant amount doesn’t need instant confirmation but if you sell a lambo then of course you should wait for at least 5 confirmations. To summarize I would even consider that zero conf is more advantageous than Lightning Network if you take everything into consideration. Worth case scenario if your restaurant is victim of a double spending attack a few times, you will just increase the confirmation level and prevent your customer from living your place. I think that it’s easier to print fake fiat money and try to pay with it rather than trying a double spending attack. But again, I might have misunderstood something or maybe there is more sophisticated exploits that I haven’t thought of. 6. Price 21 million coins, no inflation, the price currently around 300usd, a boiling community. The potential gains could be as good as BTC and even more. Maybe it’s the so waited coin that you will never convert back to that shit fiat. Certainly, one of the best coins to invest in now. 7. Electricity and efficiency Since the cost of electricity is the same whatever the size of the block, it means that BCH is more environment friendly than BTC for the same amount of transaction or we can say that it’s "wasting" less energy. Maybe if LN works one day this will change. My Conclusion: Bitcoin is technically the worst coin; all others existing coins are better technically. But Bitcoin survives because of the network effect, illustrated by its biggest hash rate, making BTC the most secure blockchain. As well because of promises made by the Lightning Network. Bitcoin is the gold of crypto currencies. Bitcoin like Gold have both almost no utility. In a traditional market, gold drop when economy goes well and goes up when investors need to find a refuge. BTC is the drop zone for fresh meat. Most of the BTC holders cannot think clearly regarding the BTC/BCH debate, they become completely irrational. This kind of behaviour leads to ruin, especially in trading/investment.With low fees, instant transaction, smart contracts, big community, user friendly apps, stable coin and a lot more to come, Bitcoin Cash has clearly a good future. I hope that someone will find my post useful. Cheers.
Miner donations will not be implemented. I will vote No in the hashrate vote.
Jiang Zhuoer, the founder of Leibite mining pool, said in a Weibo post. It was him who first proposed the plan, and it was also him who stood up and said that he would vote against it. The taste is only known to the BCH community who has been sawing for more than a month. Planned preform All this has to start from January 22. On this day, Jiang Zhuoer also published the article "Infrastructure Funding Plan (IFP) for Bitcoin Cash" on Weibo and medium at the same time. In his opinion, the current BCH has a problem of developer operating funds, only A few companies donate to developers, and the other members are hitchhikers, which can be called a tragedy of the commons. In fact, it is not just BCH. Many early projects without 1CO lack a continuous source of funds. BTC and LTC also rely on the sustainable funding of companies and individuals to donate to developers. Regarding this, Jiang Zhuoer added at the subsequent AMA held by Reddit that a few companies continued to donate, and these companies' right to speak would increase, which might affect the development in the future, which is also a major hidden danger. So based on the consideration of stable development funds, he said that several major mining pools on BCH (BTC.TOP, Antpool, BTC.com, ViaBTC, Bitcoin.com) will implement a new donation plan that will reward BCH for block explosions. 12.5% was donated to a specially established fund to support BCH infrastructure, which aims to provide sufficient funds for BCH developers. Blocks that are unwilling to participate in this donation plan will be isolated. According to its disclosure, the donation will last 6 months and the estimated amount is about 6 million US dollars. A Hong Kong company has been set up to accept and distribute funds. At the end of the article, Jiang Zhuoer, Wu Jihan, Yang Haibo and Roger Ver were stated to be supporters of this plan. The response was extremely intense After the news came out, BCH communities at home and abroad had a heated discussion. There are mixed voices in China. Some people think that this is a great benefit to the BCH currency price. Some people think that this is a miner sacrificing part of their own interests to support infrastructure construction. It is a manifestation of the spirit of the community, but some people allege that this is a pumping behavior ... these are evident in the comments below Jiang Zhuo's blog post. The foreign community, which has gathered most of the BCH developers and core personnel, is even more dramatic. On January 23, the day after the BCH miner donation plan was issued, Amaury Séchet (@deadalnix), the chief developer of the ABC team of BCH, posted a post on read.cash , which is the platform for the donation plan. He said this plan It has been brewing for a long time. The operation of the team needs financial support, clarifying that this is not the so-called "compulsory miner tax". What's more notable is that he thinks that there is no problem as long as the endowment fund can be transparent, and even Mao has recommended himself that he and Jonald Fyookball, the chief developer of Electron Cash, a light wallet developed by BCH, are qualified to control the fund. Later, the Jonald Fyookball he mentioned also posted on read.cash , which also said that it would be beneficial to the team and miners. I have tried many measures on development funds before, but none of them worked. One will be a short six-month trial and will be upgraded in the next BCH agreement. However, the core people in the community took the lead to speak out in support of this, but it could not stop the tide of opposition afterwards. In order to fight for the miners' donation, the moderators of read.cash also created a special "Debate section"  for the community to express their opinions. On January 26, Peter Rizun, chief scientist of the Bitcoin Unlimited (BU) team, posted a post on it , explaining in detail the operation of funds in this scheme. (It is necessary to add here that the BCH network is composed of two major clients, ABC and BU, which together account for more than 95% of the 1,510 public nodes in the BCH network.) According to his article, the 12.5% block reward BCH tokens will be sent directly to the new company in Hong Kong, and the developer's operating funds will come from the funds obtained by the new company from selling these BCH tokens on the exchange. After the mining revenue decreases, the hash rate of the network will drop by about the same percentage. Since BCH accounts for about 3% of the SHA256 hash rate, and other conditions remain unchanged, the total income of SHA256 miners will fall by ~ 0.4%. The following figure graphically shows the flow of these donated tokens: In fact, the mining The merchant lost only a small part of its profits. The group of investors who ultimately bought the BCH tokens out of the Hong Kong company. In the text, Peter Rizun pointed out that this is simply the developer service tax of BCH, and corruption will arise. In addition, the Bitcoin protocol has been eleven years so far. At present, what BCH needs to do is how to make the protocol more stable. The role of developer should gradually fade away, and the continuous growth of users is the core. Peter Rizun even stated at the end of the article that the monopolistic miners are still trying to adopt such a plan, and the greed is obvious and disgusting, and the BU team will probably not accept this donation plan. On the same day, BCH developer Imaginary Username posted that he believes that the development team's funds can come directly from capital investment, sponsorship, shareholder contributions and voluntary payments by miners, rather than forcing miners to pay. c After this, a BCH crowdfunding plan named Flipstarter.cash was announced online , and proposed other fundraising schemes other than donations from miners, and emphasized that this would be a new proposal based on voluntary. In general, opponents of these donation programs acknowledge that developers need revenue and infrastructure needs to be maintained, but also said that if the final plan is passed, those who do not support this plan will be lonely and violate the blockchain. spirit. Whether the taxation in disguise causes corruption, whether it will be carried out for a long time, or whether it violates the spirit of blockchain decentralization is the focus of debate. Things are still fermenting. Subsequently, Bitcoin.com also began to counter water, thinking that there is no consensus on this plan at present, and the development team needs to be clear about their use of funds. Bitcoin.com will also adopt a more prudent attitude and will not risk the risk of chain forks To support this decision. Regenerate In the face of various oppositions, Jiang Zhuoer released a new donation plan on February 1 , stating that the issue of donation ratio is in fact questionable, and reiterated that this plan will be democratic and encourage miners to perform computing power. Vote for your opinion. This plan will only be implemented if more than two-thirds of the computing power vote in favor of the donation. On February 16, Jiang Zhuoer updated the donation plan again, which reduced the original 12.5% to 5%. However, the release of the new version did not solve the doubts in the community. In response, digital currency commentator WhalePanda tweeted that the miner's tax rate is very funny, and any block that is not donated will be blocked. This is actually a totalitarian totalitarian regime, accompanied by a 51% attack threat. On the same day on the 16th, Roger ver, the founder of the Bitcoin.com wallet, posted a YouTube video . He believed that the donation ratio was 12.5% or 5% a bit random, and said "probably because of communication problems". His donation plan supporters have his name, but in fact he and Bitcoin.com do not support the plan. In fact, aside from the question of donation ratio, it is worth considering whether this so-called hashrate voting has practical significance. According to data from BTC.com, the five mining pools of the four supporters mentioned by Jiang Zhuoer have a total BCH computing power of more than 51%, reaching 54.5%, occupying a considerable say, and it is difficult for other miners to have a real speech right. Despite the opposition of the plan, it was still proceeding methodically. On February 18, according to an official BitcoinABC tweet, the ABC team has added the code for the donation plan to the ABC version 0.21.0 client. At the same time, TobiasRuck and Antony Zegers of the ABC team, and the BCHD team have stated their support for the donation plan at this node. On the one hand, there is no consensus, and on the other hand, donations need to be opened. This self-talking attitude caused strong dissatisfaction in the community. On February 19th, Freetrader, one of the earliest developers in the BCH ecosystem, created a full node called BCH Node (BCHN) , This version will remove the donation plan, express protest, and then release the PGP signatures of the BCHN project supporters. The supporters gathered, including Alexander Levin Jr, CEO of Asicseer.com, Pokkst of Crescent Cash wallet, Tipbitcoin cash, bitcoincashj , Tubing host Collin Enstad and others. Fragmentation and unification To this point, the community split into two camps, led by the ABC team and Electron Cash wallet, BCHD, etc. to support the donation plan, and BU, BCHN, etc. formed an opposition. In fact, various disputes have already raised concerns from the domestic and foreign communities that BCH may fork again. Fragmentation, strife ... This softened Jiang Zhuoer's attitude in LongBit's online live broadcast, saying that at least basic community consensus must be reached before donations can begin. Subsequently, at the second meeting of the BCH developers, Séchet of the ABC team who initially stood up to support this plan also said loosely that there are currently differences, and miners will not ignore these opinions and go their own ways. If the community becomes better, Alternatives can also be implemented. The concessions of the Séchets became a sign of gradual strife in foreign communities. Regarding the end of the entire donation plan, it ended with a post by Jiang Zhuoer's Weibo. In the article "Talking about the differences and recent market trends of BTC, BCH, and BSV" on March 5, Jiang Zhuoer said that due to a lot of opposition from the community, especially from major BCH supporters like Roger, the donations of miners will not be implemented. . The dispute, which lasted more than a month, finally ended with the termination of the donation plan. In fact, the donation plan was updated many times, and the donation share easily changed without letting us see the basis for its formulation, as Roger ver said "somewhat randomly". And "voluntary and democratic" computing power voting, if someone finally voted No in the computing power vote can influence the result, which will also lead to thinking about computing power dictatorship.
This FAQ and information thread serves to inform both new and existing users about common Bitcoin topics that readers coming to this Bitcoin subreddit may have. This is a living and breathing document, which will change over time. If you have suggestions on how to change it, please comment below or message the mods. What is /btc? The /btc reddit community was originally created as a community to discuss bitcoin. It quickly gained momentum in August 2015 when the bitcoin block size debate heightened. On the legacy /bitcoin subreddit it was discovered that moderators were heavily censoring discussions that were not inline with their own opinions. Once realized, the subreddit subscribers began to openly question the censorship which led to thousands of redditors being banned from the /bitcoin subreddit. A large number of redditors switched to other subreddits such as /bitcoin_uncensored and /btc. For a run-down on the history of censorship, please read A (brief and incomplete) history of censorship in /bitcoin by John Blocke and /Bitcoin Censorship, Revisted by John Blocke. As yet another example, /bitcoin censored 5,683 posts and comments just in the month of September 2017 alone. This shows the sheer magnitude of censorship that is happening, which continues to this day. Read a synopsis of /bitcoin to get the full story and a complete understanding of why people are so upset with /bitcoin's censorship. Further reading can be found here and here with a giant collection of information regarding these topics. Why is censorship bad for Bitcoin? As demonstrated above, censorship has become prevalent in almost all of the major Bitcoin communication channels. The impacts of censorship in Bitcoin are very real. "Censorship can really hinder a society if it is bad enough. Because media is such a large part of people’s lives today and it is the source of basically all information, if the information is not being given in full or truthfully then the society is left uneducated [...] Censorship is probably the number one way to lower people’s right to freedom of speech." By censoring certain topics and specific words, people in these Bitcoin communication channels are literally being brain washed into thinking a certain way, molding the reader in a way that they desire; this has a lasting impact especially on users who are new to Bitcoin. Censoring in Bitcoin is the direct opposite of what the spirit of Bitcoin is, and should be condemned anytime it occurs. Also, it's important to think critically and independently, and have an open mind. Why do some groups attempt to discredit /btc? This subreddit has become a place to discuss everything Bitcoin-related and even other cryptocurrencies at times when the topics are relevant to the overall ecosystem. Since this subreddit is one of the few places on Reddit where users will not be censored for their opinions and people are allowed to speak freely, truth is often said here without the fear of reprisal from moderators in the form of bans and censorship. Because of this freedom, people and groups who don't want you to hear the truth with do almost anything they can to try to stop you from speaking the truth and try to manipulate readers here. You can see many cited examples of cases where special interest groups have gone out of their way to attack this subreddit and attempt to disrupt and discredit it. See the examples here. What is the goal of /btc? This subreddit is a diverse community dedicated to the success of bitcoin. /btc honors the spirit and nature of Bitcoin being a place for open and free discussion about Bitcoin without the interference of moderators. Subscribers at anytime can look at and review the public moderator logs. This subreddit does have rules as mandated by reddit that we must follow plus a couple of rules of our own. Make sure to read the /btc wiki for more information and resources about this subreddit which includes information such as the benefits of Bitcoin, how to get started with Bitcoin, and more. What is Bitcoin? Bitcoin is a digital currency, also called a virtual currency, which can be transacted for a low-cost nearly instantly from anywhere in the world. Bitcoin also powers the blockchain, which is a public immutable and decentralized global ledger. Unlike traditional currencies such as dollars, bitcoins are issued and managed without the need for any central authority whatsoever. There is no government, company, or bank in charge of Bitcoin. As such, it is more resistant to wild inflation and corrupt banks. With Bitcoin, you can be your own bank. Read the Bitcoin whitepaper to further understand the schematics of how Bitcoin works. What is Bitcoin Cash? Bitcoin Cash (ticker symbol: BCH) is an updated version of Bitcoin which solves the scaling problems that have been plaguing Bitcoin Core (ticker symbol: BTC) for years. Bitcoin (BCH) is just a continuation of the Bitcoin project that allows for bigger blocks which will give way to more growth and adoption. You can read more about Bitcoin on BitcoinCash.org or read What is Bitcoin Cash for additional details. How do I buy Bitcoin? You can buy Bitcoin on an exchange or with a brokerage. If you're looking to buy, you can buy Bitcoin with your credit card to get started quickly and safely. There are several others places to buy Bitcoin too; please check the sidebar under brokers, exchanges, and trading for other go-to service providers to begin buying and trading Bitcoin. Make sure to do your homework first before choosing an exchange to ensure you are choosing the right one for you. How do I store my Bitcoin securely? After the initial step of buying your first Bitcoin, you will need a Bitcoin wallet to secure your Bitcoin. Knowing which Bitcoin wallet to choose is the second most important step in becoming a Bitcoin user. Since you are investing funds into Bitcoin, choosing the right Bitcoin wallet for you is a critical step that shouldn’t be taken lightly. Use this guide to help you choose the right wallet for you. Check the sidebar under Bitcoin wallets to get started and find a wallet that you can store your Bitcoin in. Why is my transaction taking so long to process? Bitcoin transactions typically confirm in ~10 minutes. A confirmation means that the Bitcoin transaction has been verified by the network through the process known as mining. Once a transaction is confirmed, it cannot be reversed or double spent. Transactions are included in blocks. If you have sent out a Bitcoin transaction and it’s delayed, chances are the transaction fee you used wasn’t enough to out-compete others causing it to be backlogged. The transaction won’t confirm until it clears the backlog. This typically occurs when using the Bitcoin Core (BTC) blockchain due to poor central planning. If you are using Bitcoin (BCH), you shouldn't encounter these problems as the block limits have been raised to accommodate a massive amount of volume freeing up space and lowering transaction costs. Why does my transaction cost so much, I thought Bitcoin was supposed to be cheap? As described above, transaction fees have spiked on the Bitcoin Core (BTC) blockchain mainly due to a limit on transaction space. This has created what is called a fee market, which has primarily been a premature artificially induced price increase on transaction fees due to the limited amount of block space available (supply vs. demand). The original plan was for fees to help secure the network when the block reward decreased and eventually stopped, but the plan was not to reach that point until some time in the future, around the year 2140. This original plan was restored with Bitcoin (BCH) where fees are typically less than a single penny per transaction. What is the block size limit? The original Bitcoin client didn’t have a block size cap, however was limited to 32MB due to the Bitcoin protocol message size constraint. However, in July 2010 Bitcoin’s creator Satoshi Nakamoto introduced a temporary 1MB limit as an anti-DDoS measure. The temporary measure from Satoshi Nakamoto was made clear three months later when Satoshi said the block size limit can be increased again by phasing it in when it’s needed (when the demand arises). When introducing Bitcoin on the cryptography mailing list in 2008, Satoshi said that scaling to Visa levels “would probably not seem like a big deal.” What is the block size debate all about anyways? The block size debate boils down to different sets of users who are trying to come to consensus on the best way to scale Bitcoin for growth and success. Scaling Bitcoin has actually been a topic of discussion since Bitcoin was first released in 2008; for example you can read how Satoshi Nakamoto was asked about scaling here and how he thought at the time it would be addressed. Fortunately Bitcoin has seen tremendous growth and by the year 2013, scaling Bitcoin had became a hot topic. For a run down on the history of scaling and how we got to where we are today, see the Block size limit debate history lesson post. What is a hard fork? A hard fork is when a block is broadcast under a new and different set of protocol rules which is accepted by nodes that have upgraded to support the new protocol. In this case, Bitcoin diverges from a single blockchain to two separate blockchains (a majority chain and a minority chain). What is a soft fork? A soft fork is when a block is broadcast under a new and different set of protocol rules, but the difference is that nodes don’t realize the rules have changed, and continue to accept blocks created by the newer nodes. Some argue that soft forks are bad because they trick old-unupdated nodes into believing transactions are valid, when they may not actually be valid. This can also be defined as coercion, as explained by Vitalik Buterin. Doesn't it hurt decentralization if we increase the block size? Some argue that by lifting the limit on transaction space, that the cost of validating transactions on individual nodes will increase to the point where people will not be able to run nodes individually, giving way to centralization. This is a false dilemma because at this time there is no proven metric to quantify decentralization; although it has been shown that the current level of decentralization will remain with or without a block size increase. It's a logical fallacy to believe that decentralization only exists when you have people all over the world running full nodes. The reality is that only people with the income to sustain running a full node (even at 1MB) will be doing it. So whether it's 1MB, 2MB, or 32MB, the costs of doing business is negligible for the people who can already do it. If the block size limit is removed, this will also allow for more users worldwide to use and transact introducing the likelihood of having more individual node operators. Decentralization is not a metric, it's a tool or direction. This is a good video describing the direction of how decentralization should look. Additionally, the effects of increasing the block capacity beyond 1MB has been studied with results showing that up to 4MB is safe and will not hurt decentralization (Cornell paper, PDF). Other papers also show that no block size limit is safe (Peter Rizun, PDF). Lastly, through an informal survey among all top Bitcoin miners, many agreed that a block size increase between 2-4MB is acceptable. What now? Bitcoin is a fluid ever changing system. If you want to keep up with Bitcoin, we suggest that you subscribe to /btc and stay in the loop here, as well as other places to get a healthy dose of perspective from different sources. Also, check the sidebar for additional resources. Have more questions? Submit a post and ask your peers for help!
WARNING: If you try to use the Lightning Network you are at extremely HIGH RISK of losing funds and is not recommended or safe to do at this time or for the foreseeable future (274 points, 168 comments)
The guy who won this week's MillionaireMakers drawing has received ~$55 in BCH and ~$30 in BTC. It will cost him less than $0.01 to move the BCH, but $6.16 (20%) in fees to move the BTC. (164 points, 100 comments)
Do you think Bitcoin needs to increase the block size? You're in luck! It already did: Bitcoin BCH. Avoid the upcoming controversial BTC block size debate by trading your broken Bitcoin BTC for upgraded Bitcoin BCH now. (209 points, 194 comments)
Master list of evidence regarding Bitcoin's hijacking and takeover by Blockstream (185 points, 113 comments)
PSA: BTC not working so great? Bitcoin upgraded in 2017. The upgraded Bitcoin is called BCH. There's still time to upgrade! (185 points, 192 comments)
This sub is the only sub in all of Reddit that allows truly uncensored discussion of BTC. If it turns out that most of that uncensored discussion is negative, DON'T BLAME US. (143 points, 205 comments)
211 points: fireduck's comment in John Mcafee on the run from IRS Tax Evasion charges, running 2020 Presidential Campaign from Venezuela in Exile
203 points: WalterRothbard's comment in I am a Bitcoin supporter and developer, and I'm starting to think that Bitcoin Cash could be better, but I have some concerns, is anyone willing to discuss them?
163 points: YourBodyIsBCHn's comment in I made this account specifically to tip in nsfw/gonewild subreddits
161 points: BeijingBitcoins's comment in Last night's BCH & BTC meetups in Tokyo were both at the same restaurant (Two Dogs). We joined forces for this group photo!
156 points: hawks5999's comment in You can’t make this stuff up. This is how BTC supporters actually think. From bitcoin: “What you can do to make BTC better: check twice if you really need to use it!” 🤦🏻♂️
155 points: lowstrife's comment in Steve Wozniak Sold His Bitcoin at Its Peak $20,000 Valuation
151 points: kdawgud's comment in The government is taking away basic freedoms we each deserve
147 points: m4ktub1st's comment in BCH suffered a 51% attack by colluding miners to re-org the chain in order to reverse transactions - why is nobody talking about this? Dangerous precident
147 points: todu's comment in Why I'm not a fan of the SV community: My recent bill for defending their frivolous lawsuit against open source software developers.
I was wondering on a more technical side what is wrong with segwit. I know there are competing ideas on scaling this way or that will be better. Leaving most of that behind if we can, why should I not say move my bitcoin into segwit addresses? Is there a real risk beyond opinions on what is the best scaling for bitcoin?
For those that don't know, SPV wallets are a type of wallet for Bitcoin Cash (and other Bitcoin-like cryptocurrencies) that are quite special. They're special, because they interact directly with the Bitcoin Cash p2p network. By this I mean: they talk with Bitcoin Cash full nodes (like Bitcoin ABC & Bitcoin Unlimited). The Copay, Bitpay, Coinomi & Bitcoin.com wallets all rely on a central server. This creates an additional requirement for trust and it also means that if the central server is down, you're going to have trouble spending your BCH. There are advantages to central-server type wallets and the Bitcoin.com wallet in particular is very nice, but those are some quite big draw backs. You also have to consider how central-server wallets will make money in the future; it's expensive maintaining that software and infrastructure. There are slightly more decentralized wallets like Electron Cash which don't have the disadvantages mentioned above, but these rely on special software being installed on remote systems. A proper SPV wallet only needs the Bitcoin Cash p2p network. An SPV wallet only needs to send, receive & process a small amount of data (relative to a full node). So they are lightweight, reliable and decentralized. Edit: I deleted those parts above based on feedback from Peter Rizun in this awesome comment he made.
SPV Wallet Options
Sadly, I don't think there are many SPV wallet options out there for BCH right now and the ones that exist have problems that make them unsuitable for many users.
https://brd.com/ This is for Android & iOS only and the developers appear to give slightly more love to the iOS version. This is a very nice wallet with a strong focus on ease of use. However it has at least the following drawbacks:
It's simple to the point of arguably being too simple. For instance, it took many users many years to persuade them to add the ability to manually specify tx fee amounts. They eventually added it but with limited control.
Last I checked it doesn't support the Bitpay BIP-70 payment protocol on the BCH network. This is a major issue as many places expect it. There's an open issue for the Android wallet to add support here.
No desktop version.
Chris Pacia's "Bitcoin Cash Wallet" (that name!)
https://github.com/cpacia/BitcoinCash-Wallet This is still in development and the GUI is still experimental. I'm hoping Chris will keep it going so eventually it could become a staple BCH SPV wallet that is in wide use. It will be especially nice, if he adds some privacy improvements.
https://electroncash.org/ Very powerful wallet. It's probably not suitable to people who aren't technically savy and who are new to crypto currency. For those people BRD is probably a better option. This software currently relies on special server software being installed on remote systems. IE it can't just connect to the usual Bitcoin Cash p2p network, it also needs to connect to special Electron Cash servers.
If any of you know of any other Bitcoin Cash SPV wallets, I'd love it if you shared them under this post. Edit: added Electron Cash to the list of SPV wallets based on feedback from jonald and Peter.
Holy shit! Greg Maxwell and Peter Todd both just ADMITTED and AGREED that NO solution has been implemented for the "SegWit validationless mining" attack vector, discovered by Peter Todd in 2015, exposed again by Peter Rizun in his recent video, and exposed again by Bitcrust dev Tomas van der Wansem.
UPDATE - Below is an ELI5 (based on a comment below by u/cryptorebel, and another comment below by u/H0dl) of this silent-but-deadly, ledger-corrupting novel attack vector which will inevitably happen on the Bitcoin SegWit fork (but which can never happen on the Bitcoin Cash fork - because Bitcoin Cash does not use SegWit for this very reason, because all the smart people already know that SegWit is not Bitcoin): ELI5:
Basically miners can be incentivized to mine without validating all of the data. Currently this problem already happens without SegWit, but there exists a Nash Equilibrium (from game theory), where the incentives make sure that this problem does not get out of hand - because currently if the percentage of "validationless miners" gets too high, then (in the system as it is now), validationless mining becomes unprofitable, and easy to attack. But SegWit would significantly change these incentives. SEPARATING THE SEGWIT DATA FROM THE BLOCKCHAIN ENLARGES THE PROBLEM, RESULTING IN a change to the Nash Equilibrium and AN UNSTABLE AND LESS SECURE SYSTEM where miners are encouraged to do validationless mining at higher rates. For example, if 20% of smaller struggling miners are incentivized to perform validationless mining, an attacking miner with as little as 31% hash could suddenly also "go validationless" (because 20% + 31% = 51%), forking the network back to pre-SegWit-as-a-soft-fork and stealing "Anyone-Can-Spend" transactions, causing mass confusion and havoc. In fact, as Peter Rizun pointed out below: WITH SEGWIT THERE WOULD NOT EVEN BE ANY PROOF THAT THE THEFT HAD ACTUALLY OCCURRED. Meanwhile, with Satoshi's original Bitcoin (now renamed Bitcoin Cash to distinguish it from Core's "enhanced" version of Bitcoin incorporating SegWit), proof of the theft would at least exist in the blockchain. This highlights Peter Rizun's main assertion that SEGWIT BITCOIN HAS A MUCH WEAKER "SECURITY MODEL" THAN SATOSHI'S ORIGINAL BITCOIN - a scathing condemnation of SegWit which Blockstream CTO Greg Maxwell is apparently unable to rebut. Greg Maxwell made some inaccurate statements trying to claim that this kind of attack would never happen - arguing that because Compact Blocks are smaller than SegWit blocks (30kb vs 750kb), this would disincentivize such an attack. But Peter Todd pointed out that DISINCENTIVIZING NON-MALICIOUS MINERS from doing this is not the same thing as PREVENTING MALICIOUS MINERS from doing this - because the difference between 30kb vs 750kb would obviously not prevent a malicious miner from performing this attack. Other people have also pointed out that by discarding the fundamental definition of a "bitcoin" from Satoshi's whitepaper ("We define an electronic coin as a chain of digital signatures"), SegWit would open the door to various new failure modes and attack vectors, by encouraging miners to "avoid downloading the signature data". This could lead to what Peter Todd calls the "nightmare scenario" where "mining could continue indefinitely on an invalid chain" - and people wouldn't even notice (because so many SegWit miners were no longer actually downloading and validating signatures).
Background This debate is all happening as Bitcoin is about to fork into two separate, diverging continuations (or "spinoffs") of the existing ledger or blockchain, as of August 1, 2017, 12:20 UTC.
"BITCOIN" (ticker: BTC): This is an "enhanced" version of Bitcoin, heavily modified by Greg Maxwell and Core to add support for SegWit, and which is also expected to support 2 MB "max blocksize" in 3 months, versus
"BITCOIN CASH" (ticker: BCC, or BCH): This is essentially Satoshi's original Bitcoin, now temporarily renamed Bitcoin Cash for disambiguation purposes. It includes a minimal tweak to immediately support 8 MB "max blocksize" for faster transactions and lower fees. Most importantly, Bitcoin Cash expressly prohibits support for SegWit - in order to protect against the failures and attacks enabled by SegWit's discarding of signature data.
All Bitcoin investors will automatically hold all their coins, duplicated onto both forks (Bitcoin-SegWit and Bitcoin Cash). However, in order to be sure you have all your coins automatically duplicated onto both forks, you must personally be in possession of your private keys before the August 1 fork. The only way you can gain possession of your private keys is by moving all your coins from any online exchanges or wallets, to a local wallet under your control - and you must do this before August 1, 2017, in order to guarantee your coins will be automatically duplicated onto both forks. Some online exchanges and wallets (most notably, the biggest exchange in the US, Coinbase) have announced they will refuse to give people their coins on the Bitcoin Cash fork after August 1 - already leading to a mass exodus of coins from those online wallets and exchanges. DETAILS: Below is the recent exchange between Greg Maxwell and Peter Todd, where they're arguing about whether the "SegWit validationless mining" attack vector discovered by Peter Todd in 2015 has or has not been solved yet - and where Peter Todd makes the bombshell revelation that it has not been solved: https://np.reddit.com/btc/comments/6qdp90/peter_todd_warning_on_segwit_validationless/dkwvyim/?context=3 https://archive.fo/zVP35 u/nullc:
Hmm? 1) Your first link doesn't resolve the problem at all - compact blocks do not work in adversarial scenarios, particularly for issues like this one. 2) Your second link - my "follow up post" - is just a minor add-on to the original post, noting that validationless mining can continue to be allowed. Calling it me "saying I thought things would be okay" is a mis-characterization of that email. [...] ydtm's scenarios are realistic...
You have the right answer: we know how to block it, and if abuse happens there would be trivial political will to deploy the countermeasure (and perhaps before, but considering the fact that the same miners that have been most aggressive in holding segwit up are the same ones that still visibly engage in spy mining, it may have to wait).
SegWit coins have a different definition than bitcoins, which gives them different properties.
Unlike with bitcoins, [with SegWit coins] miners can update their UTXO sets without witnessing the previous owners' digital signatures.
The previous owners' digital signatures have significantly less value to a miner for SegWit coins than for bitcoins - because miners do no require them [the digital signatures] in order to claim fees [when mining SegWit bitcoins].
Although a stable Nash equilibrium exists where all miners witness the previous owners for bitcoins, one [such a Nash equilibrium] does not exist for SegWit coins.
SegWit coins have a weaker security model than bitcoins.
Here's the blog post by Bitcrust dev Tomas van der Wansem where he describes the same flaw with SegWit - "a simple yet disastrous side effect caused by SegWit fixing malleability in an incorrect manner": The dangerously shifted incentives of SegWit https://bitcrust.org/blog-incentive-shift-segwit
SegWit transactions will be less secure than non-SegWit transactions If the flippening occurs for the 20% smallest (e.g. most bandwidth restricted) miners, a 31% miner could start stealing SegWit transactions! We cannot mess with the delicate incentive structures that hold Bitcoin together.
Finally, below are four recent posts from me, where I've been attempting to alert people about the serious dangers of the "SegWit validationless mining" attack vector - and the dangers, in general, of SegWit "allowing miners to avoid downloading signature data". So SegWit would actually destroy the very essence of what defines a bitcoin - because, recall that in the whitepaper, Satoshi defined a "bitcoin" as a "chain of digital signatures". Note that the "SegWit validationless mining" attack vector could only happen on the Core's radical, irresponsible Bitcoin SegWit fork. This attack is totally impossible on the original version of Bitcoin (now called "Bitcoin Cash") - because Bitcoin Cash does not support Core's dangerous, messy SegWit hack. Note: Many of the people attempting to rebut my claims in the three posts below were totally confused: they apparently thought this attack is about non-mining nodes (what they call "full nodes") failing to validate transactions. But actually (as Peter Todd clearly described in his original warning, and as Peter Rizun and Bitcrust dev Tomas van der Wansem also described in their warnings), this attack vector involves mining nodes mining transactions without ever validating or even downloading the signatures.
Just read these two sentences and you'll understand why a SegWit Coin is not a Bitcoin: Satoshi: "We define an electronic coin as a chain of digital signatures." // Core: "Segregating the signature data allows nodes to avoid downloading it in the first place, saving resources."
Peter Todd warning on "SegWit Validationless Mining": "The nightmare scenario: Highly optimised mining with SegWit will create blocks that do no validation at all. Mining could continue indefinitely on an invalid chain, producing blocks that appear totally normal and contain apparently valid txns."
BITCRUST 2017-07-03: "The dangerously shifted incentives of SegWit: Peter Rizun pointed out a flaw in SegWit (discussed by Peter Todd) that makes it unacceptably dangerous. A txn spending a SegWit output will be less safe than a txn spending a non-SegWit output, and therefore will be less valuable."
SegWit would make it HARDER FOR YOU TO PROVE YOU OWN YOUR BITCOINS. SegWit deletes the "chain of (cryptographic) signatures" - like MERS (Mortgage Electronic Registration Systems) deleted the "chain of (legal) title" for Mortgage-Backed Securities (MBS) in the foreclosure fraud / robo-signing fiasco
Hi everyone, I wanted to talk a little bit about the new Neutrino SPV wallet that was released on the Google Play store a few days ago. This wallet is still in early beta, but I wanted to give my feedback on the UX and hopefully others can give their own ideas regarding the app so the developers can make this as user friendly and intuitive as possible. I do want to say I understand this app is still being developed and many features may not be complete/finalized. Also, I am not a UX/UI designer. I am just a user that wants to see Bitcoin Cash be used easily by people everywhere. For those of you who don't know, Neutrino is a new style of SPV wallets that offer superior privacy verses other SPV wallets such as Electron-Cash. From the app's description on the Play store;
Neutrino is the most technologically advanced cryptocurrency wallet to date. Whereas all other wallets leak information about your transactions to third parties, Neutrino uses a new technique called client-side filtering to obfuscate your transaction downloads to better preserve your privacy. It also uses Simplified Payment Verification (SPV) which provides strong cryptographic proof that your transactions are including in the blockchain. This further eliminates trust in third parties. Finally it connects directly to the Bitcoin Cash network rather than relying on third party servers making it much more robust than your typical wallet.
The first issue I ran into while using this wallet was the Tor option within the settings. The app allows you to pull up the first page, but swiping into the next page will crash the app.
For the drop down menu, I think the buttons should be rearranged so that send and receive are the top two options. On top of this, the app might benefit from tool tips that pop up when you expand the menu.
I think the QR code scanner should be removed from the pop up menu. The app already allows you to scan a QR code from the "send" screen, I think that extra button is unnecessary. Also, the QR scan option within the send screen is much more intuitive. IMO, it makes more sense to scan the QR when prompted for address rather than scan the QR code first.
Move the setting buttons from the drop down menu to one of the top corners of the screen. I think that the drop menu should be reserved for actions that the user is performing very often such as sending payments or copying your receive address.
I think that the app should not force users to write down their seeds upon creating a wallet. However, it should be recommended when you create your wallet. If the user opts out of writing down their seed, there should be a banner at the top with something along the lines of "Your Wallet is Not backed up, your funds are at risk!"
Default network fee was set to like 100 sat/byte when I downloaded the wallet. It should ship with 1 or 2 sat/byte fees.
Replace "BCH Please" with something like "No transactions yet." The app seems very barren upon first start up, this might confuse new users.
If you have any ideas of your own or critiques of my ideas, leave a comment down below! Remember, the goal is to build a wallet that can be used by everyone everywhere, safely.
Timeline of the CSW-CoinGeek attack on Bitcoin Cash.
Back in March 2018, Rick Falkvinge warned that the BCH community had learned nothing from the Blockstream takeover of Bitcoin, and warned that the BCH community needed to identify toxic sociopaths (like CSW) early on.
Basically, CSW / nChain / Calvin / CoinGeek want to create a hardfork (Bitcoin SV), and insist that everyone follow it as BCH, and they'll launch double spend attacks against anyone in the BCH community who doesn't comply. In August 2018, there was a meeting of the BCH miners, to try to resolve differences. There were about 50 people in attendance, and everyone was professional & cordial, except CSW. During someone else's presentation, CSW cried "Lies and Bullshit!", and walked out. Overall, CSW ended up missing 95% of the conference, and nothing was resolved.
Brian Armstrong: Coinbase didn't sign the industry letter because I think the intention behind it is wrong. On the surface it is a communication about how exchanges would handle the hard fork, and a request to BU for replay attack protection. But my concern was that it was actually a thinly veiled attempt to keep the BTC moniker pegged to core software. I think a number of people who put their name on it didn't realize this. A couple thoughts: Certainly it makes sense to list forked assets separately on exchanges, especially during periods of uncertainty. But it doesn't make sense to say BTC can only be modified by one development team. If there is overwhelming support from miners and users around any new version of the software (regardless of who wrote it), then I think that will be called Bitcoin (or BTC). The replay attacks are a real concern. We spent some time talking with Peter Rizun from BU last week and he/they seem very open to hearing ideas on replay attack protection and coming up with solutions, which was great to see. It is not as trivial for them to add as I originally thought, because it seems adding replay protection would break SPV clients (which includes a number of mobile wallets). We as a community could probably use more brainstorming on how to solve this generally (for any hard fork). I'll make a separate post on that. I think regardless of what was stated in the letter (and people's personal views), pretty much every exchange would list whatever version got the overwhelming majority of miner and user support as BTC. I also think miners know this. A number of exchanges (GDAX, Poloniex, Gemini) didn't sign the letter, or later clarified their position on it (ShapeShift, Kraken), so I think there are a variety of opinions out there. I think creating public industry letters that people sign is a bad idea. They haven't been very effective in the past, they are "design by committee", people inevitably say their views were not accurately represented after the fact, and they tend to create more drama. I'd rather see private communication happen to move the industry forward (preferably on the phone, or in person - written communication is too easy to misinterpret people's tone). Or to have each exchange state their own opinion. My goal is to have Coinbase be neutral in this debate. I think SegWit, BU, or other solutions could all be made to work in bitcoin. We're here to provide whatever our customers want as best we can across all digital currencies, and work with the wider community to make forward progress.
Quick update from Bitcoin Unlimited Slack, by Peter Rizun: @jake and I just presented at Coinbase. I think it all went really well and that we won over a lot of people. Some initial thoughts:
Exchanges/wallets like Coinbase will absolutely support the larger block chain regardless of their ideology because they have a fiduciary duty to preserve the assets of their customers.
If a minority chain survives, they will support this chain too, and allow things to play out naturally. In this event, it is very likely in my opinion that they would be referred to as something neutral like BTC-u and BTC-c.
Coinbase would rather the minority chain quickly die, to avoid the complexity that would come with two chains. Initially, I thought there was a "moral" argument against killing the weaker chain, but I'm beginning to change my mind. (Regardless, I think 99% chance the weaker chain dies from natural causes anyways).
Coinbase's biggest concern is "replay risk." We need to work with them to come up with a plan to deal with this risk.
Although I explained to them that the future is one with lots of "genetic diversity" with respect to node software, there is still concern with the quality of our process in terms of our production releases. Two ideas were: (a) an audit of the BU code by an expert third-party, (b) the use of "fuzzing tests" to subject our code to a wide range of random inputs to look for problems.
A lot of people at Coinbase want to see the ecosystem develop second-layer solutions (e.g., payment channels, LN, etc). We need to be clear that we support permissionless innovation in this area and if that means creating a new non-malleable transaction format in the future, that we will support that.
Censorship works. A lot of people were blind to what BU was about (some thought we were against second layers, some thought there was no block size limit in BU, some thought we put the miners in complete control, some thought we wanted to replace Core as the "one true Bitcoin," etc.)
Lightning Network Will Likely Fail Due To Several Possible Reasons
ECONOMIC CASE IS ABSENT FOR MANY TRANSACTIONS The median Bitcoin (BTC) fee is $14.41 currently. This has gone parabolic in the past few days. So, let’s use a number before this parabolic rise, which was $3.80. Using this number, opening and closing a Lightning Network (LN) channel means that you will pay $7.60 in fees. Most likely, the fee will be much higher for two reasons:
BTC fees have been trending higher all year and will be higher by the time LN is ready
When you are in the shoe store or restaurant, you will likely pay a higher fee so that you are not waiting there for one or more hours for confirmation.
Let’s say hypothetically that Visa or Paypal charges $1 per transaction. This means that Alice and Carol would need to do 8 or more LN transactions, otherwise it would be cheaper to use Visa or Paypal. But it gets worse. Visa doesn’t charge the customer. To you, Visa and Cash are free. You would have no economic incentive to use BTC and LN. Also, Visa does not charge $1 per transaction. They charge 3%, which is 60 cents on a $20 widget. Let’s say that merchants discount their widgets by 60 cents for non-Visa purchases, to pass the savings onto the customer. Nevertheless, no one is going to use BTC and LN to buy the widget unless 2 things happen:
they buy more than 13 widgets from the same store ($7.60 divided by 60 cents)
they know ahead of time that they will do this with that same store
This means that if you’re traveling, or want to tip content producers on the internet, you will likely not use BTC and LN. If you and your spouse want to try out a new restaurant, you will not use BTC and LN. If you buy shoes, you will not use BTC and LN. ROAD BLOCKS FROM INSUFFICIENT FUNDS Some argue that you do not need to open a channel to everyone, if there’s a route to that merchant. This article explains that if LN is a like a distributed mesh network, then another problem exists:
"third party needs to possess the necessary capital to process the transaction. If Alice and Bob do not have an open channel, and Alice wants to send Bob .5 BTC, they'll both need to be connected to a third party (or a series of 3rd parties). Say if Charles (the third party) only possesses .4 BTC in his respective payment channels with the other users, the transaction will not be able to go through that route. The longer the route, the more likely that a third party does not possess the requisite amount of BTC, thereby making it a useless connection.”
CENTRALIZATION According to this visualization of LN on testnet, LN will be centralized around major hubs. It might be even more centralized than this visualization if the following are true:
Users will want to connect to large hubs to minimize the number of times they need to open/close channels, which incur fees
LN’s security and usability relies on 100% uptime of relaying parties
Only large hubs with a lot of liquidity will be able to make money
Hubs or intermediary nodes will need to be licensed as money transmitters, centralizing LN to exchanges and banks as large hubs
“…applicability of the regulations … to persons creating, obtaining, distributing, exchanging, accepting, or transmitting virtual currencies.” “…an administrator or exchanger is an MSB under FinCEN's regulations, specifically, a money transmitter…” "An administrator or exchanger that (1) accepts and transmits a convertible virtual currency or (2) buys or sells convertible virtual currency for any reason is a money transmitter under FinCEN's regulations…” "FinCEN's regulations define the term "money transmitter" as a person that provides money transmission services, or any other person engaged in the transfer of funds. The term "money transmission services" means "the acceptance of currency, funds, or other value that substitutes for currency from one person and the transmission of currency, funds, or other value that substitutes for currency to another location or person by any means.”” "The definition of a money transmitter does not differentiate between real currencies and convertible virtual currencies.”
"An “informal value transfer system” refers to any system, mechanism, or network of people that receives money for the purpose of making the funds or an equivalent value payable to a third party in another geographic location, whether or not in the same form.” “…IVTS… must comply with all BSA registration, recordkeeping, reporting and AML program requirements. “Money transmitting” occurs when funds are transferred on behalf of the public by any and all means including, but not limited to, transfers within the United States or to locations abroad…regulations require all money transmitting businesses…to register with FinCEN."
Mike Caldwell used to accept and mail bitcoins. Customers sent him bitcoins and he mailed physical bitcoins back or to a designated recipient. There is no exchange from one type of currency to another. FinCEN told him that he needed to be licensed as money transmitter, after which Caldwell stopped mailing out bitcoins. ARGUMENTS AGAINST NEED FOR LICENSING Some have argued that LN does not transfer BTC until the channel is closed on the blockchain. This is not a defence, since channels will close on the blockchain. Some have argued that LN nodes do not take ownership of funds. Is this really true? Is this argument based on a technicality or hoping for a loophole? It seems intuitive that a good prosecutor can easily defeat this argument. Even if this loophole exists, can we count on the government to never close this loophole? So, will LN hubs and intermediary nodes need to be licensed as money transmitters? If so, then Bob, who is the intermediary between Alice and Carol, will need a license. But Bob won’t have the money nor qualifications. Money transmitters need to pay $25,000 to $1 million, maintain capital levels and are subject to KYC/AML regulations1. In which case, LN will have mainly large hubs, run by financial firms, such as banks and exchanges. Will the banks want this? Likely. Will they lobby the government to get it? Likely. Some may be wondering about miners. FinCEN has declared that miners are not money transmitters: https://coincenter.org/entry/aml-kyc-tokens :
"Subsequent administrative rulings clarified several remaining ambiguities: miners are not money transmitters…"
FinCEN Declares Bitcoin Miners, Investors Aren't Money Transmitters Some argue that LN nodes will go through Tor and be anonymous. For this to work, will all of the nodes connecting to it, need to run Tor? If so, then how likely will this happen and will all of these people need to run Tor on every device (laptop, phone and tablet)? Furthermore, everyone of these people will be need to be sufficiently tech savvy to download, install and set up Tor. Will the common person be able to do this? Also, will law-abiding nodes, such as retailers or banks, risk their own livelihood by connecting to an illegal node? What is the likelihood of this? Some argue that unlicensed LN hubs can run in foreign countries. Not true. According to FinCEN: "“Money transmitting” occurs when funds are…transfers within the United States or to locations abroad…” Also, foreign companies are not immune from the laws of other countries which have extradition agreements. The U.S. government has sued European banks over the LIBOR scandal. The U.S. government has charged foreign banks for money laundering and two of those banks pleaded guilty. Furthermore, most countries have similar laws. It is no coincidence that European exchanges comply with KYC/AML. Will licensed, regulated LN hubs connect to LN nodes behind Tor or in foreign countries? Unlikely. Will Amazon or eBay connect to LN nodes behind Tor or in foreign countries? Unlikely. If you want to buy from Amazon, you’ll likely need to register yourself at a licensed, regulated LN hub, which means you’ll need to provide your identification photo. Say goodbye to a censorship-resistant, trust-less and permission-less coin. For a preview of what LN will probably look like, look at Coinbase or other large exchanges. It’s a centralized, regulated and censored hub. Coinbase allows users to send to each other off-chain. Coinbase provides user data to the IRS and disallows users from certain countries to sell BTC. You need to trust that no rogue employee in the exchange will steal your funds, or that a bank will not confiscate your funds as banks did in Cyprus. What if the government provides a list of users, who are late with their tax returns, to Coinbase and tells Coinbase to block those users from making transactions? You need Coinbase’s permission. This would be the antithesis of why Satoshi created Bitcoin. NEED TO REPORT TO IRS The IRS has a definition for “third party settlement organization” and these need to report transactions to the IRS. Though we do not know for sure yet, it can be argued that LN hubs satisfies this definition. If this is the case, who will be willing to be LN hubs, other than banks and exchanges? To read about the discussion, go to: Lightning Hubs Will Need To Report To IRS COMPLEXITY All cryptocurrencies are complicated for the common person. You may be tech savvy enough to find a secure wallet and use cryptocurrencies, but the masses are not as tech savvy as you. LN adds a very complicated and convoluted layer to cryptocurrencies. It is bound to have bugs for years to come and it’s complicated to use. This article provides a good explanation of the complexity. Just from the screenshot of the app, the user now needs to learn additional terms and commands: “On Chain” “In Channels” “In Limbo” “Your Channel” “Create Channel” “CID” “OPENING” “PENDING-OPEN” “Available to Receive” “PENDING-FORCE-CLOSE” There are also other things to learn, such as how funds need to be allocated to channels and time locks. Compare this to using your current wallet. Recently, LN became even more complicated and convoluted. It needs a 3rd layer as well: Scaling Bitcoin Might Require A Whole 'Nother Layer How many additional steps does a user need to learn? ALL COINS PLANNING OFF-CHAIN SCALING ARE AT RISK Bitcoin Segwit, Litecoin, Vertcoin and possibly others (including Bitcoin Cash) are planning to implement LN or layer 2 scaling. Ethereum is planning to use Raiden Network, which is very similar to LN. If the above is true about LN, then the scaling roadmap for these coins is questionable at best, nullified at worst. BLOCKSTREAM'S GAME PLAN IS ON TRACK Blockstream employs several of the lead Bitcoin Core developers. Blockstream has said repeatedly that they want high fees. Quotes and source links can be found here. Why is Blockstream so adamant on small blocks, high fees and off-chain scaling? Small blocks, high fees and slow confirmations create demand for off-chain solutions, such as Liquid. Blockstream sells Liquid to exchanges to move Bitcoin quickly on a side-chain. LN will create liquidity hubs, such as exchanges, which will generate traffic and fees for exchanges. With this, exchanges will have a higher need for Liquid. This will be the main way that Blockstream will generate revenue for its investors, who invested $76 million. Otherwise, they can go bankrupt and die. One of Blockstream’s investors/owners is AXA. AXA’s CEO and Chairman until 2016 was also the Chairman of Bilderberg Group. The Bilderberg Group is run by bankers and politicians (former prime ministers and nation leaders). According to GlobalResearch, Bilderberg Group wants “a One World Government (World Company) with a single, global marketplace…and financially regulated by one ‘World (Central) Bank’ using one global currency.” LN helps Bilderberg Group get one step closer to its goal. Luke-Jr is one of the lead BTC developers in Core/Blockstream. Regulation of BTC is in-line with his beliefs. He is a big believer in the government, as he believes that the government should tax you and the “State has authority from God”. In fact, he has other radical beliefs as well:
it is moral for the government to execute criminals and heretics (non-believers)
According to this video, Luke-Jr was the only person to have ever carried out a 51% attack, to destroy a coin that he did not like.
So, having only large, regulated LN hubs is not a failure for Blockstream/Bilderberg. It’s a success. The title of this article should be changed to: "Lightning Will Fail Or Succeed, Depending On Whether You Are Satoshi Or Blockstream/Bilderberg". SIGNIFICANT ADVANCEMENTS WITH ON-CHAIN SCALING Meanwhile, some coins such as Ethereum and Bitcoin Cash are pushing ahead with on-chain scaling. Both are looking at Sharding. Visa handles 2,000 transactions per second on average. Blockstream said that on-chain scaling will not work. The development teams for Bitcoin Cash have shown significant on-chain scaling: 1 GB block running on testnet demonstrates over 10,000 transactions per second: "we are not going from 1MB to 1GB tomorrow — The purpose of going so high is to prove that it can be done — no second layer is necessary” "Preliminary Findings Demonstrate Over 10,000 Transactions Per Second" "Gigablock testnet initiative will likely be implemented first on Bitcoin Cash” Peter Rizun, Andrew Stone -- 1 GB Block Tests -- Scaling Bitcoin Stanford At 13:55 in this video, Rizun said that he thinks that Visa level can be achieved with a 4-core/16GB machine with better implementations (modifying the code to take advantage of parallelization.) Bitcoin Cash plans to fix malleability and enable layer 2 solutions: The Future of “Bitcoin Cash:” An Interview with Bitcoin ABC lead developer Amaury Séchet:
"fixing malleability and enabling Layer 2 solutions will happen”
However, it is questionable if layer 2 will work or is needed. GOING FORWARD The four year scaling debate and in-fighting is what caused small blockers (Blockstream) to fork Bitcoin by adding Segwit and big blockers to fork Bitcoin into Bitcoin Cash. Read: Bitcoin Divorce - Bitcoin [Legacy] vs Bitcoin Cash Explained It will be interesting to see how they scale going forward. Scaling will be instrumental in getting network effect and to be widely adopted as a currency. Whichever Coin Has The Most Network Effect Will Take All (Or Most) (BTC has little network effect, and it's shrinking.) The ability to scale will be key to the long term success of any coin.
Just read these two sentences and you'll understand why a SegWit Coin is not a Bitcoin: Satoshi: "We define an electronic coin as a chain of digital signatures." // Core: "Segregating the signature data allows nodes to avoid downloading it in the first place, saving resources."
Just read these two sentences and you'll understand why a SegWit Coin is not a Bitcoin: Satoshi: "We define an electronic coin as a chain of digital signatures." // Core: "Segregating the signature data allows nodes to avoid downloading it in the first place, saving resources." This isn't me making this argument. This is Core itself openly confessing that SegWit is not Bitcoin. Because Core itself admits that "SegWit allows avoiding downloading the signatures" - which is the total opposite of when Satoshi said that the signatures are what defines Bitcoin. So you can't have it both ways.
Either you download (and validate) the signatures and you have a Bitcoin as defined by Satoshi's whitepaper.
Or you use this totally different system invented by Core, which allows not downloading and not validating the signatures - so you have a SegWit Coin (but you do not have a Bitcoin).
So, the difference between Bitcoin and SegWit could not be more extreme. After all, the only reason Bitcoin is secure is because it's based on cryptographic signatures. That's the security that has made the value of a bitcoin go from less than 0.01 USD to over 2500 USD in 8 years. And that's the same security which Core's alt-coin called SegWit allows you to "avoid dowloading" (and avoid validating). This is Core's words - not mine. So SegWit is not Bitcoin. SegWit is an alt-coin. With less security than Bitcoin. The two definitions below define totally different coins - one more secure, one less secure:
"We define an electronic coin as a chain of digital signatures."
SegWit Coin is not Bitcoin. (Because - as Core open and proudly confesses - Segwit "allow nodes to avoid downloading" the signatures - which are the very definition of a coin.)
Bitcoin Cash is Bitcoin. (Because Bitcoin Cash changes absolutely nothing about Bitcoin transactions - it just allows including more of them in a block - and this is alsoexactly the way Satoshi designed Bitcoin.)
The only people who don't understand these simple facts are lemmings who have been brainwashed by reading the subreddit r\bitcoin - which deletes posts quoting their enemy Satoshi Nakamoto:
CENSORED (twice!) on r\bitcoin in 2016: "The existing Visa credit card network processes about 15 million Internet purchases per day worldwide. Bitcoin can already scale much larger than that with existing hardware for a fraction of the cost. It never really hits a scale ceiling." - Satoshi Nakomoto
You can either listen to Satoshi and use Bitcoin - now called Bitcoin Cash.
Or you can listen to Core and r\bitcoin and use SegWit coin - an alt-coin developed by Core, which (as they openly admit) "allows nodes to avoid downloading" - and avoid validating - the cryptographic signatures which are the only thing providing the security of Bitcoin.
I'm not the only one making these arguments. Peter Rizun and Peter Todd are also saying the same thing: that SegWit provides less security than Bitcoin - precisely because (as Core admits) SegWit "allows nodes to avoid downloading" the signature data. Those alarms sounded by Peter Rizun and Peter Todd were cited by a Bitcrust dev in an important article discussing the incorrectly designed incentives (and decreased security - and ultimately decreased value) of SegWit Coins versus plain old Bitcoins: The dangerously shifted incentives of SegWit https://bitcrust.org/blog-incentive-shift-segwit UPDATE: OK, lots of people have been attempting to write rebuttals here, talking about (SegWit) "full nodes" not validating blocks. But that's not the danger being discussed here. The danger is being discussed here is about (SegWit) miners not validating full blocks. So I think I need to quote this excerpt from Peter Todd's message - which is hard to find in the OP, because to get to it, first you have to click on the link to the article by the Bitcrust dev at the bottom of the OP, titled "The dangerously shifted incentives of SegWit". In his message, Peter Todd is making a very important warning about the dangers of "validationless mining" enabled by SegWit: https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2015-Decembe012103.html
Segregated witnesses and validationless mining With segregated witnesses the information required to update the UTXO set state is now separate from the information required to prove that the new state is valid. We can fully expect miners to take advantage of this to reduce latency and thus improve their profitability. We can expect block relaying with segregated witnesses to separate block propagation into four different parts, from fastest to propagate to slowest: 1) Stratum/getblocktemplate - status quo between semi-trusting miners 2) Block header - bare minimum information needed to build upon a block. Not much trust required as creating an invalid header is expensive. 3) Block w/o witness data - significant bandwidth savings, (~75%) and allows next miner to include transactions as normal. Again, not much trust required as creating an invalid header is expensive. 4) Witness data - proves that block is actually valid. The problem is [with SegWit] #4 is optional: the only case where not having the witness data matters is when an invalid block is created, which is a very rare event. It's also difficult to test in production, as creating invalid blocks is extremely expensive - it would be surprising if an anyone had ever deliberately created an invalid block meeting the current difficulty target in the past year or two. The nightmare scenario - never tested code never works The obvious implementation of highly optimised mining with segregated witnesses will have the main codepath that creates blocks do no validation at all; if the current ecosystem's validationless mining is any indication the actual code doing this will be proprietary codebases written on a budget with little testing, and lots of bugs. At best the codepaths that actually do validation will be rarely, if ever, tested in production. Secondly, as the UTXO set can be updated without the witness data, it would not be surprising if at least some of the wallet ecosystem skips witness validation. With that in mind, what happens in the event of a validation failure? Mining could continue indefinitely on an invalid chain, producing blocks that in isolation appear totally normal and contain apparently valid transactions.
Coinbase didn't sign this letter because I think the intention behind it is wrong. On the surface it is a communication about how exchanges would handle the hard fork, and a request to BU for replay attack protection. But my concern was that it was actually a thinly veiled attempt to keep the BTC moniker pegged to core software. I think a number of people who put their name on it didn't realize this. A couple thoughts:
Certainly it makes sense to list forked assets separately on exchanges, especially during periods of uncertainty. But it doesn't make sense to say BTC can only be modified by one development team. If there is overwhelming support from miners and users around any new version of the software (regardless of who wrote it), then I think that will be called Bitcoin (or BTC).
The replay attacks are a real concern. We spent some time talking with Peter Rizun from BU last week and he/they seem very open to hearing ideas on replay attack protection and coming up with solutions, which was great to see. It is not as trivial for them to add as I originally thought, because it seems adding replay protection would break SPV clients (which includes a number of mobile wallets). We as a community could probably use more brainstorming on how to solve this generally (for any hard fork). I'll make a separate post on that.
I think regardless of what was stated in the letter (and people's personal views), pretty much every exchange would list whatever version got the overwhelming majority of miner and user support as BTC. I also think miners know this.
A number of exchanges (GDAX, Poloniex, Gemini) didn't sign the letter, or later clarified their position on it (ShapeShift, Kraken), so I think there are a variety of opinions out there.
I think creating public industry letters that people sign is a bad idea. They haven't been very effective in the past, they are "design by committee", people inevitably say their views were not accurately represented after the fact, and they tend to create more drama. I'd rather see private communication happen to move the industry forward (preferably on the phone, or in person - written communication is too easy to misinterpret people's tone). Or to have each exchange state their own opinion.
My goal is to have Coinbase be neutral in this debate. I think SegWit, BU, or other solutions could all be made to work in bitcoin. We're here to provide whatever our customers want as best we can across all digital currencies, and work with the wider community to make forward progress.
The subject of our piece for today’s debunking (April 21st, 2019), is a post that Craig Wright uploaded on the blogging website, Medium.com on November 26th, 2018, titled, ‘Why I troll’. In specific, it appears that Craig Wright took particular offense to a tweet from Bitcoin ABC developer, Peter Rizun. Bitcoin : Peter Rizun Talks About SPV. 4 Billion SPV BCH Wallets! （Part B） Peter Rizun Talks About SPV. 4 Billion SPV BCH Wallets! （Part B） View the link Bitcoin Bitcoin is a distributed, worldwide, decentralized digital money. Bitcoins The chief scientist of Bitcoin Unlimited, Peter R. Rizun, wrote a tweet in which he says that Bitcoin (BTC) and Bitcoin Cash (BCH) is the battle for Bitcoin’s future.It is worth remembering that Bitcoin and Bitcoin Cash became rivals in the market with two different proposals for scaling the network. Peter Rizun: But you can manage your own funds directly with a Bitcoin SPV Wallet. There's orders of magnitude less costly and less expensive. So many of your guests on Lightning month have spoken to the significant usability problems of Lightning network. But they broadly said that there's going to be ways to abstract this away from the user. It just requires a better user experience that we ... The subject of our piece for today’s debunking (April 21st, 2019), is a post that Craig Wright uploaded on the blogging website, Medium.com on November 26th, 2018, titled, ‘Why I troll’. In specific, it appears that Craig Wright took particular offense to a tweet from Bitcoin ABC developer, Peter Rizun. Here is a screenshot of the tweet response from Peter Rizun that Craig Wright posted ...
SF Cryptocurrency Devs: Peter Rizun & Taariq Lewis
Peter Rizun visited the Coinbase office on March 16th, 2017 to discuss Bitcoin Unlimited. To own a piece of the future visit Coinbase: https://www.coinbase... Dr Peter Rizun has been researching the economics of transaction fees in Bitcoin extensively and joined us to discuss what dynamics affect fees and why he thinks the blocksize limit will ... Excerpted from: https://www.youtube.com/watch?v=iKDC2DpzNbw In this presentation, Peter R presents arguments and data from his whitepaper, "A Transaction Fee... Peter Rizun, chief scientist at Bitcoin Unlimited, talks about SPV at Global Blockchain Developer Conference. He offers solutions to deal with SPV privacy concerns. Watch and Enjoy! Peter Rizun - Empirical Double spend Probabilities for Unconfirmed Transactions Presented 16 October 2018 at Satoshi's Vision Instant Transactions Workshop Gargnano (Lake Garda) Italy https ...