How Long Does it Take to Mine 1 Bitcoin? - HedgeTrade Blog
How Long Does it Take to Mine a Bitcoin? - U.Today
How long does it take to mine a Bitcoin? - Decrypt
GHash.IO Mining Pool – BitcoinWiki
Clearing up some misconceptions (including my own) [WARNING: LONG, MATH]
I've been reviewing NAV's code for the past couple months in my spare time and have seen a few things pass for granted which I had assumed were edicts from the NAV team, but as it turns out, they were not. I'll just cover them in sections below. This is going to get long, and hopefully you like math. I'm sorry, in advance.
Coins do not gain weight with age
tldr; section title This is the big one, and the reason I wanted to review NAV's code in the first place. I had been treating this unofficial medium article like it was the bible, and it mentions that coins are weighted with age and size. No other documentation I could find indicated any differently (honestly, there's not really other documentation, in the first place) and so, having not finished looking into the code, I presumed that was simply true. It is not, however. I'm not even sure where this idea came from, besides that article, because no NAV team announcements I've seen have said this, but maybe I'm just not looking back far enough.
So how DOES it work?
tldr; values are hashed together and compared against a target. That target is adjusted based only on how many NAV are staking For those who haven't looked into how NAV picks the next group of staking coins (like I hadn't), the way it works is that a bunch of publicly available values (such as the time of the block you want to make, the time and hash of the transaction that represents your coinstake, and a few others) are hashed twice through SHA256 to create a random number. The actual values input are less important, what is important for NAV's purposes is that they are available to everyone, reasonably unique, and can be verified by other nodes on the blockchain. The output is, mathematically speaking, reproducible, but also completely random. This value is then checked against a target value that changes based on how fast the network is making blocks. If the network is making blocks around once every three seconds? The target value gets harder (smaller). If the network is making blocks around once every minute? The target value gets easier (larger). The target value just gets adjusted until the network is sitting comfortably at 30 second blocks. So far this is the same way Bitcoin keeps their block time consistent. However, PoS currencies then usually make an adjustment to that target value to increase your chances to win. In NAV's case, they multiply the target value by the number of coins you are staking. This means that a group of 1000 coins is 1000 times more likely to stake than a group of 1 coin. To use more accessible numbers, since the values NAV is using are huge, this would be like saying the base odds are that you have to roll a 2 or below on a 100-sided die to win the coinstake. For one roll, you have a 2% chance. For two rolls, you have a 3.95% chance, for three rolls you have a 5.88% chance, for ten you have a 18.29% chance. For n rolls, a 1 - (98^n)/(100^n) chance. To simplify this somewhat, and encourage larger groups, NAV simply says that if you have 10 coins, your chances are 10 * 2%, or 20%. It's a bit more, but it's close. It's worth noting that, using this system, if you have 50 coins, you have a 100% chance to win every roll, whereas pure single-roll odds only give you a 63.58% chance. The reason this isn't really a problem is that, in this example, there would only be 50 coins in existence, and you probably don't even have access to half of them. Additionally, if you are winning too quickly, NAV will start handing you a 200 sided die, then a 400 sided die, until you are only winning one in 30 -- and this is assuming you're the only one playing. With a table of people, you will get a larger die until only one of you is winning one roll in 30.
tldr; if coins gained weight with age it might be an actual security concern. This way is not The problem with Proof of Stake Age (PoSA) is that, if implemented poorly, it can create opportunities for very cheap attacks. You may have heard of a 51% attack (or majority attack) before. This is where any single entity in the Bitcoin network gains more than 50% of the hashing power. At 51% the chances of them mounting a successful network control attack are now greater than half, which presents a potential danger to the network.
tldr; you need lots of fancy computers that you get to keep after You need a lot of hashing power, which means a lot of computers, which means a lot of financial capital. Or, you need to combine with another organization or pool to combine your hashing power. This was actually a concern once in Bitcoin, but fortunately was resolved to no ill-effect, and ghash.io agreed to cut down their processing. In a PoW system, however, after you have executed your attack, you still have all of your computers, and can use them for something else. The financial capital you have invested is kept, and you never had to invest a single penny into the coin.
tldr; you need lots of coins that you probably spent a lot of money on, which are probably worth very little after In PoS currencies, a 51% attack is still possible, but in this case you would need to have more than half of the staking coins. As of a few days ago, the network weight was hovering around ~18-22 million NAV, so for NAV, you would need ~10-12 million coins to have the requisite 51% of coins. The base assumption for a PoS currency, however, is that, once you have that many coins, you're pretty invested in the network, and it is directly detrimental to you to attempt to attack it. When you execute your attack, you will likely greatly damage trust in the coin, and lose a large portion of your investment. At least, this is the theory.
tldr; you need a little bit of money and a lot of time You just need to wait. The most simplistic form of PoSA is in the form: adjusted_target = coins * time * base_target. If left uncapped, the time adjustment can allow a single coin stake to outweigh the entire network. Even with a cap of three months (for a total of 7776000 age-weight), you could use a mere 797 individual 0.01 NAV stakes (7.97 NAV total) to outweigh the combined base weight of all 62 million NAV in existence. You want good actors to have the most weight on the network, but in a PoSA currency, good actors are constantly losing their weight when their time resets, whereas bad actors can get more weight for doing nothing.
tldr; you need a little bit of money and to somehow create a bunch of coins with the same hashing window There are some currencies, such as VeriCoin, which have attempted to address this in novel ways, using what they call Proof of Stake Time. They create an ideal window during which your coins gain weight, but after which they return to base levels. This should theoretically encourage people to keep a server running, so they can always catch that window when it happens, which is partially randomized (to prevent someone from simply making a bunch of 0.01 coinstakes at the same time and just waiting for the window). I'm not sure how battle-tested this is, and I can think of a few potential vectors for attack that might exist, depending on implementation, but it does present an interesting and promising approach to the problem of how to encourage everyone on the network to participate, instead of just large stake holders with good odds.
So how likely is it for me to actually get a stake with ___ NAV
tldr; at current network weights it's likely that 1000 NAV will stake around once a week, and 1 NAV will stake once every 17 years. Since NAV is neither PoSA nor PoST (which I would stress isn't a bad thing, because pure PoS is comparatively simple and has known -- and addressed -- vectors of attack. It's also not necessarily a good thing; it's mostly just a thing), you're basically just as likely to stake today as you are tomorrow. Theoretically, every second should present a new opportunity to win a stake, but in practice this ends up not quite working out because there are other people on the network. Every time you accept a new block, you cut off all of the seconds before it forever. In practice, it's probably easiest to just look at the total weight of the network, and your weight, and extrapolate from there. We'll take for granted that NAV will have 30 second block times for this calculation. If you've got Python you can follow along:
>>> # 2 blocks/min * 60 min/hr * 24 hday * 365 days/year ... TOTAL_STAKES_IN_YEAR = 1051200 >>> # 60 sec/min * 60 min/hr * 24 hday * 365 day/yr ... SECONDS_IN_YEAR = 31536000 >>> # the number of coins you are staking ... stake = 1.0 >>> # The total number of coins on the network ... network_weight = 18701284.96584108 >>> my_stakes_per_year = (stake / network_weight) * TOTAL_STAKES_IN_YEAR 0.05621004128433283 >>> seconds_between_stakes = SECONDS_IN_YEAR / my_stakes_per_year 561038548.9752324
For those keeping track, this means that a 1 NAV stake is expected to take approximately 17.79 years to see a return in the current network (and, even then, only if you happen to be online at exactly the right time and nobody else stakes it first). Coincidentally, this is where that "expected time to stake" number comes from, which I've seen people asking about. I didn't actually look that one up in the code, so I'm not sure how their exact equation differs from mine, but I arrived at the exact same numbers they did, so it's likely similar (and probably more concise, because I am both a verbose writer and programmer, if you hadn't noticed). A 1000 NAV stake, using what I am calling network math for ease of reference, is expected to take around 6.49 days. My suspicion is that the reason this is sometimes more sporadic is that going by the target alone, and testing every second, a 1000 NAV stake should be getting a hit around once every 8 hours. I generated a file of 31536000 hashes (one for each second in the year), using the rules NAV uses to create hashes, and came up with the following table.:
*Assumes a target of 0x1a183258. I forget which block I pulled this from, but it's still around there. This unpacks to a value of: 0x0000000000001832580000000000000000000000000000000000000000000000 Calc wins : Mathematical calculation for how many hashes you should win, given the target Hash wins : This was pulled from the file with a year's worth of random hashes. N-M Wins : The number of wins network math says you should get Hash time : The average time between wins in the randomized file for the given NAV amount N-M time : The amount of time network math says you should wait between wins NAV : Calc wins : Hash wins : N-M wins : Hash time : N-M time 1 : 1.05 : 1 : 0.05 : ~1 year : 17.79 years 5 : 5.29 : 7 : 0.28 : 41.66 days : 3.56 years 10 : 10.59 : 10 : 0.56 : 34.27 days : 1.78 years 50 : 52.95 : 44 : 2.81 : 7.49 days : 129.87 days 100 : 105.89 : 107 : 5.62 : 3.42 days : 64.94 days 200 : 211.79 : 212 : 11.24 : 41.24 hours : 32.47 days 500 : 529.48 : 532 : 28.11 : 16.39 hours : 12.99 days 1000 : 1058.97 : 1050 : 56.21 : 8.33 hours : 6.49 days 2000 : 2117.93 : 2109 : 112.42 : 4.15 hours : 3.25 days 5000 : 5294.83 : 5326 : 281.05 : 98.62 minutes : 1.30 days 1000000 : 1058966.42 : 1058455 : 56210.04 : 29.79 seconds : 9.35 minutes
So obviously, a bit of disparity between the target-based times and the network calculated times. I would guess this has to do with other people on the network cutting you off from time values, and orphaned transactions where you did get the right value, but somebody else made a weightier one, but this is where my ability to really verify exactly what is happening starts dwindling. The disparity in N-M wins and Calc wins indicates that the target is currently too easy, and should adjust upwards, because right now coins on the network are 18.84 times weightier (calc wins column / n-m wins column) in hashing power than they should be based on the total network weight. But this is also where the whole "50 groups of 1 coin has a 63.58% chance to hit 2/100 whereas 1 group of 50 coins has a 100% chance to hit 100/100" thing comes into play. Since the network is largely broken up into groups of, on average, 1500 coins, we're actually looking at ~12467.52 groups of 1500 coins vying to win any given block. Given the target, a group of 1500 coins should have a 0.0050369...% chance to win any given coinstake ((target * 150000000000) / maximum_hash_value). This means that the chance that at least one of the 12467.52 staking groups will match for a given second is 1 - (1 - 0.000050369...)^12467.52 = 0.4663, or 46.63%. This places the actual amount that coins are overweight a bit closer to 13.989 times. (network should have ~1/30 chance (3.33...%) to win any given second, 46.63 / 3.33...% = 13.989). However, as mentioned, the software itself can get in the way of that, so this might just be due to a quirk of how the NAV software searches for matches, since it will abandon any seconds prior to the most recently accepted block. If you were cut off from 13 seconds in every 100, that would account for the weight disparity. In any case, I would probably trust the network math times over the pure math ones, if you're just trying to get a feel for how long you'll likely wait between stakes. What this really translates to is that, although a 1 NAV stake will probably have one second out of the year that will hash in it's favour, even running 24/7 you're likely to miss 17 of those before you actually have all the right conditions to win. Interestingly, I did manage to find one 9.99 NAV stake that won after only 5 days; so it can happen. But it's all still random.
How does this affect my staking rewards?
tldr; it doesn't Fortunately, NAV pays out the amount you should receive down to the second. Let's take this block at random. 1119.84133642 NAV coinstake, generated 3.82575342 NAV. The time of the previous transaction that created that coinstake was 1514741456 (see the "Raw Transaction" tab). The time of the current transaction is 1514741456. that's all we need to go on.
>>> SECONDS_IN_DAY = 86400 >>> DAYS_IN_YEAR = 365 >>> CENT = 1000000 # .01 NAV >>> COIN = 100000000 # 1.0 NAV >>> REWARD_PERCENT = 5 * CENT # will be 4 * CENT with community fund >>> # All NAV amounts in satoshi (navtoshi? natoshi?) ... stake = 111984133642 >>> # time of this stake ... stake_time = 1516896224 >>> # time of the transaction that made this stake >>> stake_prev_time = 1514741456 >>> # I'm not 100% positive why it converts to cent/seconds first, ... # but this is what the code does, so we need to as well if we ... # want to be accurate ... cent_seconds = (stake * (stake_time - stake_prev_time)) // CENT 241299827679 >>> # Now they undo the cent_seconds for some reason? I'm not sure. ... # This does, however, create a minimum coin stake for any given time. ... # 1 NAV, for instance, will not generate anything if it stakes until ... # it is exactly one day old (with a whopping 0.00013698 NAV). ... # The minimum NAV stake you can get a reward from if you get lucky ... # and stake at the end of two hours is 11 NAV. ... coin_day = ((cent_seconds * CENT) // COIN) // SECONDS_IN_DAY 27928 >>> stake_reward = (coin_day * REWARD_PERCENT) // DAYS_IN_YEAR 382575342
note: // is a floor division. For example, 3 / 2 = 1.5, 3 // 2 = 1 And we come out the other end with exactly 3.82575342 NAV. Those are the only variables that affect your payout for staking. You then also get whatever the fees happen to be. There's not any magic to it, and so far as I can tell there's also not a limit. If you legitimately wait those 17 years for your 1 NAV to stake, your eventual payout will be on the order of 0.84 NAV. Anyways, that's pretty much all there is to your payout; it's very direct.
So is it worth it for me to stake?
tldr; personal preference Honestly, this is entirely up to you. If you're in the "month or more" camp of coinstakers, it's probably not worth your while to be running 24/7 unless you're just really into securing the network (which, to be fair, I am all about that, so feel free). But with the blockchain at the small size it is right now, and if you're going to be using your computer anyways, it probably doesn't hurt to just run it in the background and see if you get lucky. Like pointed out, the actual amount you get is not affected by any of this. All that this means is that it is harder to predict exactly when you will get a stake. If you're concerned about financially supporting the staking, then NavTechServers has created this handy calculator to help out. From a mathematical standpoint, it's ironically much more likely for small coinstakers to get stakes if they are running 24/7, but from a financial standpoint, you're probably not getting enough to care to, so it's up to your preferences.
Cold Staking is not staking while offline
tldr; there is no magic that will allow blocks to be created without nodes on the network I've also seen a bit of confusion over what cold staking is likely to bring, and want to ensure people aren't upset when it does get rolled out. Specifically the misconception that staking with offline coins is the same thing as staking while offline. It is physically impossible to generate a block without something connected to the network, and you only get staking rewards once you have generated a block, because the blockchain doesn't really have the tools to tell who is online and participating beyond "who made this block." All that cold staking means is that the private keys to use your NAV to buy things or move their address are not on the server doing the staking. In general, this is accomplished via a smart contract and a secondary set of keys that is given permission to use your coins, but only for staking. If those keys are used for moving the a coin from one account to another, then the smart contract will flag it as an incorrect usage. This means that if someone hacks into your server, the only thing they could steal are the keys that permit them to stake your blocks. This is much easier to correct than someone stealing your private keys and moving your NAV to a separate address. Particl's overview of their cold staking system is a good read to get some baseline expectations. Most implementations of cold staking do open up the possibility to sign your coins over to someone else to stake, which opens up the entirely new 51% attack vector of asking people to just GIVE you their network weight. But given that I have just recently explained to you all why one person owning a majority of the coin staking weight on the network is dangerous, I shouldn't have to tell you why this would be a bad idea, right? RIGHT??
In any case, that's about it. Chances are the answer to the question "am I staking" is "yes", so long as the wallet tells you that it's staking. Unfortunately (but also fortunately), waiting longer only increases your chances insofar as you are trying more, but when you do eventually stake, you will be paid out based on how long you have waited, so there's not much lost. I could go into much more depth about all this but this was about as concise as I could get it while still showing most of my work. I'd also be happy to address any other questions that arise from this, and obviously if somebody who knows better finds anything wrong with any of the details here let me know. If you wanted to get into this more in-depth, I've created a Python script which explains some of the technical aspects more thoroughly (including how to unpack the compact target number into the full value being checked in the code), and allows you to get hands-on with real block values. You can download it here. Happy hodling, everybody.
tl;dr: GHash.IO shows that the economic incentives behind Bitcoin are probably very flawed, it might take a disaster to get the consensus to fix it, and if that happens I want to make sure I can pay my rent and buy food while we're fixing it. I made a promise to myself a while back that I'd sell 50% of my bitcoins if a pool hit 50%, and it's happened. I've known for awhile now that the incentives Bitcoin is based on are flawed for many reasons and seeing a 50% pool even with only a few of those reasons mattering is worrying to say the least. Where do we go from here? We need to do three things: 1) Eliminate pools. 2) Provide a way for miners to solo-mine with low varience and frequent mining payouts even with only small amounts of hashing power. 3) Get rid of ASICs. Unfortunately #3 is probably impossible - there is no known way to make a PoW algorithm where an ASIC implementation isn't significantly less expensive on a marginal cost basis than an implementation on commodity hardware. Every way people have tried has the perverse effect of increasing the cost to make the first ASIC, which just further centralizes mining. Absent new ideas - ideas that will be from hardware engineers, not programmers - SHA256² is probably the best of many bad choices. (and no, PoS still stands for something other than 'stake') We are however lucky that we have physics and (maybe) international relations on our side. It will always be cheaper to run a small amount of hashing power than a large amount, at least for some value of 'small' and 'large'. It's the cube-square law, as applied to heat dissipation: a small amount of mining equipment has a much larger surface area compared to a large amount, and requires much less effort per unit hashing power to keep cool. Additionally finding profitable things to do with small amounts of waste heat is easy and distributed all over the planet - heating houses, water tanks, greenhouses, etc. As for international relations, restricting access to chip fabrication facilities is a very touchy subject due to how it can make or break economies, and especially militaries. (but that's a hopeful view) Solving problem #1 and getting rid of pools is probably possible - Andrew Miller came up with the idea of a non-outsourceable puzzle. While tricky to implement, the basic idea is simple: make it possible for whomever finds the block to steal the reward, even after the fact, in a way that doesn't make it possible to prove any specific miner did it. Adding this protection to Bitcoin requires a hard-fork as described, though perhaps there's a similar idea that can be done as a soft-fork. Block withholding attacks - where miners simply don't submit valid solutions - could also achieve the same goal, although in a far uglier way. Solving problem #2 and letting miners achieve low varience even with a small amount of hashing power is also possible - p2pool does it already, and tree chains would do it as a side effect. However p2pool is itself just another type of pool, so if non-outsourceable puzzles are implemented they'll need to be compatible. p2pool in its current form is also less then ideal - it does need a lot of bandwidth, and if you have lower latency than average you have a significant unfair advantage. But these are problems that (probably) can be fixed before adding it to the protocol. (this can be done in a soft-fork) Do I still think Bitcoin will succeed in the long run? Yes, but I'm a lot less sure of it than I used to be. I'm also very skeptical that any of the above will be implemented without a clear failure of the system happening first - there's just too many people, miners, developers, merchants, etc. whose heads are in the sand, or even for that matter, actively making the problem worse. If that failure happens it's quite likely that the Bitcoin price will drop to essentially nothing - not a good way to start a few months of work fixing the problem when my expenses are denominated in Canadian dollars. I hope I'm on the wrong side of history here, but I'm a cautious guy and selling a significant chunk of bitcoins is just playing it safe; I'm not rich. BTW If you owe me fiat and normally pay me via Bitcoin, for the next 2.5 weeks you can pay me based on the price I sold at, $650 CAD.
There seems to be a lot of major misunderstandings going on in regards to transaction confirmations (in particular, PoS sales)
So iv been reading posts/comments on here lately and it seems like there is some serious misunderstandings by alot of people in regards for the time it takes for a transaction to get confirmed on the blockchain, especially in the use case of merchant PoS sales. You guys are comparing apples to oranges here The time it takes for one confirmation is how long it takes for a transaction to be CLEARED. As in, verified, confirmed, 100% complete and irreversible transaction of bitcoins. In comparison, the transaction clearing time for credit cards is something around 30 - 60 days. At any point during that 30-60 period, you could find out that the credit card you used was actually stolen and the money gets reversed, plus you are out of pocket already from providing the product/service. In bitcoin, this same window is about 10 minutes to an hour. If you see an incoming transaction to your address, you can be 99.9% sure that its legit and will eventually confirm. You absolutely do not need to force your customer to wait 10 or more minutes just to confirm their payment. Just give them the damn coffee and let them be. Would you make your customer wait in store for an 2 entire months just to make sure they dont call up their bank and make a chargeback? In order to actually pull off a 0-confirmation double spend attempt, I believe it goes something like this (someone correct me if im wrong):
Send a payment to the merchant
At almost the exact same time, send out a transaction using the same inputs but going to one of your own addresses, and pay a much higher miner fee
Hope that both a) your second transaction will propagate much faster than your first one, while the first one still propagates enough to be seen right away by the merchant b) your second transaction to yourself doesnt immediately get dropped due to the attempted spending of the inputs being seen and c) miners choose to pick up and confirm your transaction to yourself instead of the one to the merchant.
So basically, its a combination of capability (not many people know how to manually create transactions, relatively), timing, alot of luck and also having the balls to attempt it in person. Its not something thats a garunteed success rate. However if you happen to control > 50 % of the mining hash power, then it suddenly starts to become alot easier, which is why its important to keep our mining distributed (and why everyone freaked out in january over ghash.io) Just think for a second how many tens of thousands (millions..?) of fraudulent credit card and bank transactions happen every single day... and not to mention how retard-edly easy it is to scam peoples credit card numbers tl;dr it's very reasonably safe to accept 0 confirmation payments in most use cases. just dont do it for transactions where some serious cash is in play (have patience and wait the short amount of time instead)
My draft for a new /r/btc FAQ explaining the split from /r/Bitcoin to new users
If /btc is going to actually compete with /Bitcoin, it needs to be just as friendly and informative to new users, especially given its position as the “non default” or “breakaway” sub. The current /btc sticky saying "Welcome to the Wiki" doesn't even have any content in it and I feel this is a bit of a wasted opportunity to create an informative resource that new users will see by default and everyone else can link to instead of retyping things over and over about the history and difference between the subs. Here's what I've written as a starting point. I've done my best to keep it as concise and relevant as possible but in all honesty it is a complicated issue and a short but effective explanation is basically impossible. I hope the community can expand/improve on it further. Quick bit about me I got into Bitcoin in October 2013, when /Bitcoin had around 40k subscribers if I remember correctly, so by now I've actually personally experienced a large portion of Bitcoin's history - including the events preceding and since the creation of this sub. I have been an active and popular poster on /Bitcoin for almost all of that time, until the split and my subsequent banning. With the recent censorship fiasco, I'm finding I have to reiterate the same points over and over again to explain to newer users what happened with the /Bitcoin vs /btc split, questions about hard forks, what is likely to happen in the future and so on. So I put a couple of hours into writing this post to save myself the trouble in future.
There is a TL:DR; at the bottom, but it is exactly that. If you skip straight to the TL:DR; then don’t expect sympathy when you post questions that have already been covered in the lengthy and detailed main post.
New to Bitcoin?
I am totally new to Bitcoin. What is it? How does it work? Can/should I mine any? Where can I buy some? How do I get more information? All of these questions are actually really well covered in the /Bitcoin FAQ. Check it out in a new tab here. Once you've got a bit of a handle on the technology as a whole, come back here for the rest of the story.
What's the difference between /btc and /Bitcoin? What happened to create two such strongly opposed communities? Why can't I discuss /btc in /Bitcoin? Historically, the /Bitcoin subreddit was the largest and most active forum for discussing Bitcoin. As Bitcoin grew close to a cap in the number of transactions it could process, known as the 1MB block size limit, the community had differing opinions on the best way to proceed. Note that this upcoming issue was anticipated well ahead of time, with Satoshi's chosen successor to lead the project Gavin Andresen posting about it in mid 2015. Originally, there was quite a broad spread of opinions - some people favoured raising the blocksize to various extents, some people favoured implementing a variety of second layer solutions to Bitcoin, probably most people thought both could be a good idea in one form or another. This topic was unbelievably popular at the time, taking up almost every spot on the front page of /Bitcoin for weeks on end. Unfortunately, the head moderator of /Bitcoin - theymos - felt strongly enough about the issue to use his influence to manipulate the debate. His support was for the proposal of existing software (called Bitcoin Core) NOT to raise the blocksize limit past 1MB and instead rely totally on second layer solutions - especially one called Segregated Witness (or SegWit). With some incredibly convoluted logic, he decided that any different implementations of Bitcoin that could potentially raise the limit were effectively equivalent to separate cryptocurrencies like Litecoin or Ethereum and thus the block size limit or implement other scaling solutions were off-topic and ban-worthy. At the time the most popular alternative was called Bitcoin XT and was supported by experienced developers Gavin Andresen and Mike Hearn, who have since bothleft Bitcoin Core development in frustration at their marginalisation. Theymos claimed that for Bitcoin XT or any other software implementation to be relevant to /Bitcoin required "consensus", which was never well defined, despite it being seemingly impossible for everyone to agree on the merits of a new project if no one was allowed to discuss it in the first place. Anyone who didn't toe the line of his vaguely defined moderation policy was temporarily or permanently banned. There was also manipulation of the community using the following tactics - which can still be seen today:
Default thread sorting changed to "controversial" in selected threads instead of "best" like nearly every other subreddit
Comment/upvote scores hidden by default (combined with the previous point this prevented theymos and other unpopular mods like StarMaged and BashCo from ending up at the bottom of every thread they posted in)
The implementation of a custom CSS sheet that disguises long threads of [removed] comments. This was especially effective at the time as the censorship was obvious since threads were becoming wastelands of hundreds of deleted comments, similar to other Reddit throw downs like GamerGate
This created enormous uproar among users, as even many of those in favour of Bitcoin Core thought it was authoritarian to actively suppress this crucial debate. theymos would receive hundreds of downvotes whenever he posted: for example here where he gets -749 for threatening to ban prominent Bitcoin business Coinbase from the subreddit. In an extraordinary turn of events, Theymos posted a thread which received only 26% upvotes in a sample size of thousands announcing that he did not care if even 90% of users disagreed with his policy, he would not change his opinion or his moderation policy to facilitate the discussion the community wanted to have. His suggested alternative was instead for those users, however many there were, to leave. Here are Theymos' exact words, as he describes how he intends to continue moderating Bitcoin according to his own personal rules rather than the demands of the vast majority of users, who according to him clearly don't have any "real arguments" or "any brains".
Do not violate our rules just because you disagree with them. This will get you banned from /Bitcoin , and evading this ban will get you (and maybe your IP) banned from Reddit entirely. If 90% of /Bitcoin users find these policies to be intolerable, then I want these 90% of /Bitcoin users to leave. Both /Bitcoin and these people will be happier for it. I do not want these people to make threads breaking the rules, demanding change, asking for upvotes, making personal attacks against moderators, etc. Without some real argument, you're not going to convince anyone with any brains -- you're just wasting your time and ours. The temporary rules against blocksize and moderation discussion are in part designed to encourage people who should leave /Bitcoin to actually do so so that /Bitcoin can get back to the business of discussing Bitcoin news in peace.
/btc was therefore born in an environment not of voluntary departure but of forced exile. This forced migration caused two very unfortunate occurrences:
It polarised the debate around Bitcoin scaling. Previously, there was a lot of civil discussion about compromise and people with suggestions from all along the spectrum were working to find the best solution. That was no longer possible when a moderation policy would actively suppress anyone with opinions too different from Theymos. Instead it forced everyone into a "with us or against us" situation, which is why the /btc subreddit has been pushed so far in favour of the idea of a network hard fork (discussed below).
It has distracted Bitcoin from its mission of becoming a useful, global, neutral currency into a war of information. New users often find /Bitcoin and assume it to be the authoritative source of information, only to later discover that a lot of important information or debate has been invisibly removed from their view.
Since then, like any entrenched conflict, things have degenerated somewhat on both sides to name calling and strawman arguments. However, /btc remains committed to permitting free and open debate on all topics and allowing user downvotes to manage any "trolling" (as /Bitcoin used to) instead of automatic shadow-banning or heavy-handed moderator comment deletion (as /Bitcoin does now). Many users in /Bitcoin deny that censorship exists at all (it is difficult to see when anyone pointing out the censorship has their comment automatically hidden by the automoderator) or justify it as necessary removal of "trolls", which at this point now includes thousands upon thousands of current and often long-standing Bitcoin users and community members. Ongoing censorship is still rampant, partially documented in this post by John Blocke For another detailed account of this historical sequence of events, see singularity87 s posts here and here. /btc has a public moderator log as demonstration of its commitment to transparency and the limited use of moderation. /Bitcoin does not. Why is so much of the discussion in /btc about the censorship in /Bitcoin? Isn't a better solution to create a better community rather than constantly complaining? There are two answers to this question.
Over time, as /btc grows, conversation will gradually start to incorporate more information about the Bitcoin ecosystem, technology, price etc. Users are encouraged to aid this process by submitting links to relevant articles and up/downvoting on the /new and /rising tab as appropriate. However, /btc was founded effectively as a refuge for confused and angry users banned from /Bitcoin and it still needs to serve that function so at least some discussion of the censorship will probably always persist (unless there is a sudden change of moderation policy in /Bitcoin).
The single largest issue in Bitcoin right now is the current cap on the number of transactions the network can process, known as the blocksize limit. Due to the censorship in /Bitcoin, open debate of the merits of different methods of addressing this problem is impossible. As a result, the censorship of /Bitcoin (historically the most active and important Bitcoin community forum) has become by proxy the single most important topic in Bitcoin, since only by returning to open discussion would there be any hope of reaching agreement on the solution to the block size limit itself. As a topic of such central importance, there is naturally going to be a lot of threads about this until a solution is found. This is simply how Bitcoin works, that at any one time there is one key issue under discussion for lengthy periods of time (previous examples of community "hot topics" include the demise of the original Bitcoin exchange Mt Gox, the rise to a 51% majority hash rate of mining pool GHash.io and the supposed "unveiling" of Bitcoin's anonymous creator Satoshi Nakamoto).
Bitcoin Network Hard Forks
What is a hard fork? What happens if Bitcoin hard forks? A network hard fork is when a new block of transactions is published under a new set of rules that only some of the network will accept. In this case, Bitcoin diverges from a single blockchain history of transactions to two separate blockchains of the current state of the network. With any luck, the economic incentive for all users to converge quickly brings everyone together on one side of the fork, but this is not guaranteed especially since there is not a lot of historical precedent for such an event. A hard fork is necessary to raise the block size limit above its 1MB cap. Why is /btc generally in favour of a hard fork and /Bitcoin generally against? According to a lot of users on /Bitcoin - a hard fork can be characterised as an “attack” on the network. The confusion and bad press surrounding a hard fork would likely damage Bitcoin’s price and/or reputation (especially in the short term). They point to the ongoing turmoil with Ethereum as an example of the dangers of a hard fork. Most of /Bitcoin sees the stance of /btc as actively reckless, that pushing for a hard fork creates the following problems:
The possibility of an irrevocable community divergence, as has happened in Ethereum (discussed below)
The chance of introducing new code bugs by forcing a network update without totally comprehensive software developer review
The possibility of reducing decentralisation in the network as higher hardware requirements puts greater strain on network nodes and miners
According to a lot of users on /btc - a hard fork is necessary despite these risks. Most of /btc sees the stance of /Bitcoin as passively reckless, that continuing to limit Bitcoin’s blocksize while remaining inactive creates the following problems:
Transaction fees are continuously rising as transactions compete for the limited space in each block
Confirmation times for any given transaction are also increasing, especially ones without a rapidly escalating fee attached
Fee and confirmation times is making BItcoin hostile to new users, who are confused by their difficulties with this “revolutionary” new technology
Restricting Bitcoin’s growth increases the likelihood it will be overtaken by another unrestricted cryptocurrency
Passively validating the stance of /Bitcoin to continue censoring the debate about this important issue
Bitcoiners are encouraged to examine all of the information and reach their own conclusion. However, it is important to remember that Bitcoin is anopen-source projectfounded on the ideal offree market competition (between any/all software projects, currencies, monetary policies, miners, ideas etc.). In one sense, /btc vs /Bitcoin is just another extension of this, although Bitcoiners are also encouraged to keep abreast of the top posts and links on both subreddits. Only those afraid of the truth need to cut off opposing information. What do Bitcoin developers, businesses, users, miners, nodes etc. think? Developers There are developers on both sides of the debate, although it is a common argument in /Bitcoin to claim that the majority supports Bitcoin Core. This is true in the sense that Bitcoin Core is the current default and has 421 listed code contributors but misleading because not only are many of those contributors authors of a single tiny change and nothing else but also many major figures like Gavin Andresen, Mike Hearn and Jeff Garzik have left the project while still being counted as historical contributors. Businesses including exchanges etc. A definite vote of confidence is not available from the vast majority of Bitcoin businesses, and wouldn't be binding in any case. The smart decision for most businesses is to support both chains in the event of a fork until the network resolves the issue (which may only be a day or two). Users Exact user sentiment is impossible to determine, especially given the censorship on /Bitcoin. Miners and Nodes Coin.dance hosts some excellent graphical representations of the current opinion on the network. Node Support Information Miner Support Information What do I do if the network hard forks?* Do we end up with two Bitcoins? Firstly, in the event of a hard fork there is no need to panic. All Bitcoins are copied to both chains in the case of a split, so any Bitcoins you have are safe. HOWEVER, in the event of a fork there will be some period of confusion where it is important to be very careful about how/why you spend your Bitcoins. Hopefully (and most likely) this would not last long - everyone in Bitcoin is motivated to converge into agreement for everyone's benefit as soon as possible - but it's impossible to say for sure. There isn't a lot of historical data about cryptocurrency hard forks, but one example is alternative cryptocurrency Ethereum that forked into two coins after the events of the DAO and currently exists as two separate chains, ETH (Ethereum) and ETC (Ethereum Classic). The Ethereum fork is not a good analogy for Bitcoin because its network difficulty target adjusts every single block, so a massive drop in hash rate does not significantly impede its functioning. Bitcoin’s difficult target adjusts only every 2100 blocks - which under usual circumstances takes two weeks but in the event of a hard fork could be a month or more for the smaller chain. It is almost inconceivable that a minority of miners would willingly spend millions of dollars over a month or more purely on principle to maintain a chain that was less secure and processed transactions far slower than the majority chain - even assuming the Bitcoins on this handicapped chain didn't suffer a market crash to close to worthless. Secondly, a hard fork is less likely to be a traumatic event than it is often portrayed in /Bitcoin:
The Bitcoin Core and /Bitcoin stated policy is to avoid a hard fork at all costs. So there is no risk of a hard fork on that side.
The Bitcoin XT/Classic/Unlimited and /btc side is prepared for a hard fork if necessary, but it will only come to pass if a clear majority of miners (and presumably users, although that's harder to determine) are already signalling that they would be onboard. There is no exact threshold value, but no miner is going to risk publishing a block larger than 1MB until they are very confident the network will follow them.
What Happens Now
How do I check on the current status of opinion? Coin.dance hosts some excellent graphical representations of the current opinion on the network. Node Support Information Miner Support Information Users are also welcome to engage in anecdotal speculation about community opinion based on their impression of the commentary and activity in /btc and /Bitcoin. Haven't past attempts to raise the blocksize failed? There is no time limit or statute of limitations on the number of attempts the community can make to increase the block size and scale Bitcoin. Almost any innovation in the history of mankind required several attempts to get working and this is no different. The initial attempt called Bitcoin XT never got enough support for a fork because key developer Mike Hearn left out of frustration at trying to talk around all the censorship and community blockading. The second major attempt called Bitcoin Classic gained massive community momentum until it was suddenly halted by the drastic implementation of censorship by Theymos described above. The most popular attempt at the moment is called Bitcoin Unlimited. /btc is neutral and welcoming to any and all projects that want to find a solution to scaling Bitcoin - either on-or off-chain. However, many users are suspicious of Bitcoin Core's approach that involves only SegWit, developed by a private corporation called Blockstream and that has already broken its previous promises in a document known as the Hong Kong Agreement to give the network a block size limit raise client along with Segregated Witness (only the latter was delivered) . What if the stalemate is irreconcilable and nothing ever happens? Increasing transaction fees and confirmation times are constantly increasing the pressure to find a scaling solution - leading some to believe that further adoption of Bitcoin Unlimited or a successor scaling client will eventually occur. Bitcoin Core's proposed addition of SegWit is struggling to gain significant support and as it is already the default client (and not censored in /Bitcoin) it is unlikely to suddenly grow any further. If the stalemate is truly irreconcilable, eventually users frustrated by the cost, time and difficulty of Bitcoin will begin migrating to alternative cryptocurrencies. This is obviously not a desirable outcome for long standing Bitcoin supporters and holders, but cannot be ignored as the inevitable free market resort if Bitcoin remains deadlocked for long enough.
Bitcoin is at its transaction capacity and needs to scale to onboard more users
The community was discussing different ways to do this until the biased head moderator of /BitcoinTheymos got involved
Theymos, started an authoritarian censorship rampage which culminated in telling 90% of /Bitcoin users to leave. /btc is where they went. Here is the thread where it all started. Note the 26% upvoted on the original post, the hundreds of upvotes of community outcry in the comments and the graveyard of [removed] posts further down the chain. Highly recommended reading in its entirety.
To this day, /Bitcoin bans all discussion of alternative scaling proposals and /btc
Bitcoin is about freedom, and can’t function effectively with either an artificially restricted transaction cap or a main community forum that is so heavily manipulated. This subreddit is the search for solutions to both problems as well as general Bitcoin discussion.
Debate continues in /btc, and generally doesn't continue in /Bitcoin - although posts referencing /btc or Bitcoin Unlimited regularly sneak past the moderators because it is such a crucial topic
Eventually one side or the other breaks, enough miners/nodes/users get on one side and Bitcoin starts scaling. This may or may not involve a hard fork.
If not, fees and average confirmation times continue to rise until users migrate en masse to an altcoin. This is not an imminent danger, as can be seen by the BTC marketcap dominance at its historical levels of 80+% but could change at any time
To arms Bitcoin community! Help us to complete this mining installation for the Zürich MoneyMuseum. We are not asking for funds. Only your expertise needed! 20$ tip if you give us the relevant clue to solve or mitigate our main problem. Nice pictures of the exhibition inside as well…
Edit: A big thank you to all people who helped us we can now mine true pps with diff1! The people in this thread which have helped most have been awarded. I want to mention also the operator of btcmp.com denis2342 and Luke-Jr. Actually looking at the miner screen in the Linux terminal helped a lot ;-). The pool constantly resigned to stratum with variable difficulty. We can now mine true pps with diff1. Getwork with long polling seems to be default after disabling stratum... We will probably post again, when there is a video of the installation in action... Again many thanks. Learned a lot. Edit: Thank you for all the answeres so far! We will try different things now and report back. Tip bounty will be distrubuted as soon as we found out what finally does the trick. Ths could take a few days. The offerd tip will be distributed and very likeley a few others as well. First of all, let me tell you that the Bitcoin Exhibition at the Zürich MoneyMuseum is most likely the biggest and most diverse of it’s kind. Please read more about the museum and the exhibition below. Help us solve the following problem we experience with our “Muscle Powered Proof of Work” installation: Me and a friend have invested a lot of time to build an installation for the Museum. It is basically a 10GHash/s miner and RapberryPi which is powered by a hand generator (Maxon DC motor with planetary gear). Here are some pictures of the installation, although not entirely put together yet. There are still some changes planned. https://www.dropbox.com/sh/0qcvl3wu4romhnt/AAAYF08lnVAy6W6KEepE7e2Ua?dl=0 Now let’s get to the core of our problem: We are mining at the getwork diff1 pool btcmp.com as it is a true pps pool with getwork diff1. The visitors in the museum can power the generator for 2-3min and see directly how many Satoshis the "network" (actually pool but we don't want to confuse the visitors to much at that point) has given the museum for their work. This all works well so far but one problem remains. Sometimes the pool does not get a share from us for more than 40 seconds or even more than 60 in some cases. I have calculated that with 8.4 GHash/s we should find a share about every 0.5 seconds in average (diff1). I think when the pool gets a share it gets all the hashes as it then accounts for several Satoshis. Statistically we get per minute what we should get in theory. We would very much like to lower the time between the accepted shares by the pool, however. This would help to make the overall experience much smoother for the visitors. Please look at this screenshot from MinePeon and answer some questions: https://www.dropbox.com/s/lb1jei4trc9kqe5/MinePeonScreenshot.png?dl=0 We see that we get a lot of diff1 hashes. However, only 11 shares/packages have been accepted. The Is there a possibility to set the miner SW so it submits to the pool as soon as a share is found? It seems to send them in packages which sometimes have 4-5 seconds in between but sometimes a much as 80 seconds. I would like to submit packages of hashes much more often. How can this be influenced? What exactly are the Getworks (GW)? What exactly are the Accepted ones (Acc)? This is where the TipBounty is. Help us to get a better Acc/diff1 ratio. Best would be 1:1. What exactly are the rejected ones (Rej)? What exactly are the discarded ones (Disc)? What exactly are the difficulty one hashes (diff1)? Now some of these questions seem very very basic but it is important for us to understand what these are and how we can influence these. We have a 1:1 correlation between the Acc and the pool side acknowledgement of shares/packages. So whenever the MinePeon shows one more for this value the pool value for last submitted share goes to “moments ago”. Does the miner SW have a setting where we can set after how many diff1 hashes a package of hashes is sent to the pool? If no, do you have another idea why so few are sent? Ideally we would set it so the diff1 hashes are sent every 5 seconds or so, probably even more often. Is stratum with fixed diff1 possible? If so, would it be better to use stratum? Are there critical settings if we should know of? (we have tried --request-diff and --no-submit-stale) We are using BFGMiner on MinePeon if that matters. We could switch to CGMiner if that would help. Any help is very much appreciated. The museum is doing a great job explaining Bitcoin basics. We had special focus on interactive learning and have several things to underline this. I hope to hear back from you so we can improve our installation. Please don't hesitate to ask if you have further questions. We are both not mining experts. Thanks for reading and AMA. SimonBelmond Current features of the Bitcoin exhibition at the Zürich MoneyMuseum: Current Features:
Life screen with various stats/charts/parameters/transactions…
Muscle powered PoW: Hand generator with 5v and 3.5-5A output, Raspberry Pi, MinePeon, 5x Antminer U2+ plus a screen to show the hash-rate at the pool and/or in MinePeon web interface. This screen will not be hand powered. This installation will complement their coining die (go to 1:27 to see what I mean).
The Bitcoin mining evolution (CPU, GPU, FPGA, ASIC)
A few short (2-3 minutes) interviews.
Other wallets, Trezor, PiperWallet
ATM Prototype, functional
PiperWallet to use.
Casascius and other physical Bitcoins, Wallets (also some commemorative coins), Paper wallet like one out of the first Bitcoin (A)TM ever
12 Picture tours
Bitcoin for beginners
Debunking 13 Bitcoin myths
What you definitely have to know
The history of Bitcoin
Bitcoin und traditional forms of money
Alternatives to Bitcoin
Citations about Bitcoin
How do I open an account?
How do I get Bitcoin?
Bitcoin community and economy
Bitcoin as a platform
I see this as a good opportunity for Bitcoin, so let’s embrace it. I am especially excited to compare the traditional forms of money which used proof of work to the new money which also uses proof of work. I think in that context it will be much easier for the visitors to value this concept. A lot of schools and other groups book guided tours at the museum. It is open on every Friday from December 05. On. Entry is free of charge. Edit:Markdown, typos
Q: What is your relationship with Blockstream now? Are you in a Cold War? Your evaluation on BS was pretty high “If this amazing team offers you a job, you should take it,” tweeted Gavin Andresen, Chief Scientist, Bitcoin Foundation.” But now, what’s your opinion on BS? A: I think everybody at Blockstream wants Bitcoin to succeed, and I respect and appreciate great work being done for Bitcoin by people at Blockstream. We strongly disagree on priorities and timing; I think the risks of increasing the block size limit right away are very small. I see evidence of people and businesses getting frustrated by the limit and choosing to use something else (like Ethereum or a private blockchain); it is impossible to know for certain how dangerous that is for Bitcoin, but I believe it is more danger than the very small risk of simply increasing or eliminating the block size limit.
Q: 1) Why insist on hard fork at only 75%? You once explained that it is possible to be controlled by 5% if we set the threshold at 95%. I agree, but there should be some balance here. 75% means a high risk in splitting, isn’t it too aggressive? Is it better if we set it to 90%? A: 1)The experience of the last two consensus changes is that miners very quickly switch once consensus reaches 75% -- the last soft fork went from 75% support to well over 95% support in less than one week. So I’m very confident that miners will all upgrade once the 75% threshold is reached, and BIP109 gives them 28 days to do so. No miner wants to create blocks that will not be accepted by the network. Q: 2) How to solve the potentially very large blocks problem Classic roadmap may cause, and furthur causing the centralization of nodes in the future? A: 2)Andreas Antonopoulos gave a great talk recently about how people repeatedly predicted that the Internet would fail to scale. Smart engineers proved them wrong again and again, and are still busy proving them wrong today (which is why I enjoy streaming video over my internet connection just about every night). I began my career working on 3D graphics software, and saw how quickly we went from being able to draw very simple scenes to today’s technology that is able to render hundreds of millions of triangles per second. Processing financial transactions is much easier than simulating reality. Bitcoin can easily scale to handle thousands of transactions per second, even on existing computers and internet connections, and even without the software optimizations that are already planned. Q: 3) Why do you not support the proposal of RBF by Satoshi, and even plan to remove it in Classic completely? A: 3) Replace-by-fee should be supported by most of the wallets people are using before it is supported by the network. Implementing replace-by-fee is very hard for a wallet, especially multi-signature and hardware wallets that might not be connected to the network all of the time. When lots of wallet developers start saying that replace-by-fee is a great idea, then supporting it at the network level makes sense. Not before. Q: 4) . Your opinion on soft fork SegWit, sidechain, lighnting network. Are you for or against, please give brief reasons. Thanks. A: 4) The best way to be successful is to let people try lots of different things. Many of them won’t be successful, but that is not a problem as long as some of them are successful. I think segregated witness is a great idea. It would be a little bit simpler as a hard fork instead of a soft fork (it would be better to put the merkle root for the witness data into the merkle root in the block header instead of putting it inside a transaction), but overall the design is good. I think sidechains are a good idea, but the main problem is finding a good way to keep them secure. I think the best uses of sidechains will be to publish “write-only” public information involving bitcoin. For example, I would like to see a Bitcoin exchange experiment with putting all bids and asks and trades on a sidechain that they secure themselves, so their customers can verify that their orders are being carried out faithfully and nobody at the exchanges is “front-running” them. Q: 5) Can you share your latest opinion on Brainwallet? It is hard for new users to use long and complex secure passphrase, but is it a good tool if it solves this problem? A: 5) We are very, very bad at creating long and complex passphrases that are random enough to be secure. And we are very good at forgetting things. We are much better at keeping physical items secure, so I am much more excited about hardware wallets and paper wallets than I am about brain wallets. I don’t trust myself to keep any bitcoin in a brain wallet, and do not recommend them for anybody else, either.
Q: Gavin, do you have bitcoins now? What is your major job in MIT? Has FBI ever investigated on you? When do you think SHA256 might be outdated, it seems like it has been a bit unsafe? A: Yes, a majority of my own person wealth is still in bitcoins -- more than a financial advisor would say is wise. My job at MIT is to make Bitcoin better, in whatever way I think best. That is the same major job I had at the Bitcoin Foundation. Sometimes I think the best way to make Bitcoin better is to write some code, sometimes to write a blog post about what I see happening in the Bitcoin world, and sometimes to travel and speak to people. The FBI (or any other law enforcement agency) has never investigated me, as far as I know. The closest thing to an investigation was an afternoon I spent at the Securities and Exchange Commission in Washington, DC. They were interested in how I and the other Bitcoin developers created the software and how much control we have over whether or not people choose to run the software that we create. “Safe or unsafe” is not the way to think about cryptographic algorithms like SHA256. They do not suddenly go from being 100% secure for everything to completely insecure for everything. I think SHA256 will be safe enough to use in the all ways that Bitcoin is using it for at least ten years, and will be good enough to be used as the proof-of-work algorithm forever. It is much more likely that ECDSA, the signature algorithm Bitcoin is using today, will start to become less safe in the next ten or twenty years, but developer are already working on replacements (like Schnorr signatures).
Q: It’s a pleasure to meet you. I only have one question. Which company are you serving? or where do you get your salary? A: The Media Lab at MIT (Massachusetts Institute of Technology) pays my salary; I don’t receive regular payments from anybody else. I have received small amounts of stock options in exchange for being a techical advisor to several Bitcoin companies (Coinbase, BitPay, Bloq, Xapo, Digital Currency Group, CoinLab, TruCoin, Chain) which might be worth money some day if one or more of those companies do very well. I make it very clear to these companies that my priority is to make Bitcoin better, and my goal in being an advisor to them is to learn more about the problems they face as they try to bring Bitcoin to more of their customers. And I am sometimes (once or twice a year) paid to speak at events.
Q: Would you mind share your opinion on lightning network? Is it complicated to implement? Does it need hard fork? A: Lightning does not need a hard fork. It is not too hard to implement at the Bitcoin protocol level, but it is much more complicated to create a wallet capable of handling Lightning network payments properly. I think Lightning is very exciting for new kinds of payments (like machine-to-machine payments that might happen hundreds of times per minute), but I am skeptical that it will be used for the kinds of payments that are common on the Bitcoin network today, because they will be more complicated both for wallet software and for people to understand.
Q: 1) There has been a lot of conferences related to blocksize limit. The two took place in HongKong in Decemeber of 2015 and Feberary of 2016 are the most important ones. Despite much opposition, it is undeniable that these two meetings basically determines the current status of Bitcoin. However, as the one of the original founders of Bitcoin, why did you choose to not attend these meetings? If you have ever attended and opposed gmax’s Core roadmap (SegWit Priority) in one of the meetings, we may be in a better situation now, and the 2M hard fork might have already begun. Can you explain your absence in the two meetings? Do you think the results of both meetings are orchestrated by blockstream? A: 1) I attended the first scaling conference in Montreal in September of 2015, and had hoped that a compromise had been reached. A few weeks after that conference, it was clear to me that whatever compromise had been reached was not going to happen, so it seemed pointless to travel all the way to Hong Kong in December for more discussion when all of the issues had been discussed repeatedly since February of 2015. The February 2016 Hong Kong meeting I could not attend because I was invited only a short time before it happened and I had already planned a vacation with my family and grandparents. I think all of those conferences were orchestrated mainly by people who do not think raising the block size limit is a high priority, and who want to see what problems happen as we run into the limit. Q: 2) We have already known that gmax tries to limit the block size so as to get investment for his company. However, it is obvious that overthrowing Core is hard in the short term. What if Core continues to dominate the development of Bitcoin? Is it possible that blockstream core will never raise the blocksize limit because of their company interests? A: 2) I don’t think investment for his company is Greg’s motivation-- I think he honestly believes that a solution like lightning is better technically. He may be right, but I think it would be better if he considered that he might also be wrong, and allowed other solutions to be tried at the same time. Blockstream is a funny company, with very strong-willed people that have different opinions. It is possible they will never come to an agreement on how to raise the blocksize limit.
Q: I would like to ask your opinion on the current situation. It’s been two years, but a simple 2MB hard fork could not even be done. In Bitcoin land, two years are incredibly long. Isn’t this enough to believe this whole thing is a conspiracy? A: I don’t think it is a conspiracy, I think it is an honest difference of opinion on what is most important to do first, and a difference in opinion on risks and benefits of doing different things. Q: How can a multi-billion network with millions of users and investors be choked by a handful of people? How can this be called decentrilized and open-source software anymore? It is so hard to get a simple 2MB hard fork, but SegWig and Lighting Network with thousands of lines of code change can be pushed through so fast. Is this normal? It is what you do to define if you are a good man, not what you say. A: I still believe good engineers will work around whatever unnecessary barriers are put in their way-- but it might take longer, and the results will not be as elegant as I would prefer. The risk is that people will not be patient and will switch to something else; the recent rapid rise in developer interest and price of Ethereum should be a warning. Q: The problem now is that everybody knows Classic is better, however, Core team has controlled the mining pools using their powers and polical approaches. This made them controll the vast majority of the hashpower, no matter what others propose. In addition, Chinese miners have little communication with the community, and do not care about the developement of the system. Very few of them knows what is going on in the Bitcoin land. They almost handed over their own power to the mining pool, so as long as Core controls the pools, Core controls the whole Bitcoin, no matter how good your Classic is. Under this circumstance, what is your plan? A: Encourage alternatives to Core. If they work better (if they are faster or do more) then Core will either be replaced or will have to become better itself. I am happy to see innovations happening in projects like Bitcoin Unlimited, for example. And just this week I see that Matt Corallo will be working on bringing an optmized protocol for relaying blocks into Core; perhaps that was the plan all along, or perhaps the “extreme thin blocks” work in Bitcoin Unlimited is making that a higher priority. In any case, competition is healthy. Q: From this scaling debate, do you think there is a huge problem with Bitcoin development? Does there exsit development centrilization? Does this situation need improvment? For example, estabilish a fund from Bitcoin as a fundation. It can be used for hiring developers and maintainers, so that we can solve the development issue once and for all. A: I think the Core project spends too much time thinking about small probability technical risks (like “rogue miners” who create hard-to-validate blocks or try to send invalid blocks to SPV wallets) and not enough time thinking about much larger non-technical risks. And I think the Core project suffers from the common open source software problem of “developers developing for developers.” The projects that get worked on are the technically interesting projects-- exciting new features (like the lightning network), and not improving the basic old features (like improving network performance or doing more code review and testing). I think the situation is improving, with businesses investing more in development (but perhaps not in the Core project, because the culture of that project has become much less focused on short-term business needs and more on long-term exciting new features). I am skeptical that crowd-funding software development can work well; if I look at other successful open source software projects, they are usually funded by companies, not individuals.
You are one of the most-repected person in Bitcoin world, I won’t miss the chance to ask some questions. First of all, I am a Classic supporter. I strongly believe that on-chain transcations should not be restrained artificially. Even if there are transcations that are willing to go through Lighting Network in the future, it should be because of a free market, not because of artificial restrication. Here are some of my questions: Q: 1) For the past two years, you’ve been proposing to Core to scale Bitcoin. In the early days of the discussion, Core devs did agree that the blocksize should be raised. What do you think is the major reason for Core to stall scaling. Does there exist conflict of interest between Blockstream and scaling? A: 1) There might be unconscious bias, but I think there is just a difference of opinion on priorities and timing. Q: 2) One of the reason for the Chinese to refuse Classic is that Classic dev team is not technically capable enough for future Bitcoin development. I also noticed that Classic does have a less frequent code release compared to Core. In your opinion, is there any solution to these problems? Have you ever thought to invite capable Chinese programers to join Classic dev team? A: 2) The great thing about open source software is if you don’t think the development team is good enough (or if you think they are working on the wrong things) you can take the software and hire a better team to improve it. Classic is a simple 2MB patch on top of Core, so it is intentional that there are not a lot of releases of Classic. The priority for Classic right now is to do things that make working on Classic better for developers than working on Core, with the goal of attracting more developers. You can expect to see some results in the next month or two. I invite capable programmers from anywhere, including China, to help any of the teams working on open source Bitcoin software, whether that is Classic or Core or Unlimited or bitcore or btcd or ckpool or p2pool or bitcoinj. Q: 3) Another reason for some of the Chinese not supporting Classic is that bigger blocks are more vulnerable to spam attacks. (However, I do think that smaller blocks are more vlunerable to spam attack, because smaller amount of money is needed to choke the blockchain.) What’s our opinion on this? A: 3) The best response to a transaction spam attack is for the network to reject transactions that pay too little fees but to simply absorb any “spam” that is paying as much fees as regular transactions. The goal for a transaction spammer is to disrupt the network; if there is room for extra transactions in blocks, then the network can just accept the spam (“thank you for the extra fees!”) and continue as if nothing out of the ordinary happened. Nothing annoys a spammer more than a network that just absorbs the extra transactions with no harmful effects. Q: 4) According to your understanding on lighting network and sidechains,if most Bitcoin transactions goes throught lighting network or sidechains, it possible that the fees paid on the these network cannot reach the main-chain miners, which leaves miners starving. If yes, how much percent do you think will be given to miners. A: 4) I don’t know, it will depend on how often lightning network channels are opened and closed, and that depends on how people choose to use lightning. Moving transactions off the main chain and on to the lightning network should mean less fees for miners, more for lightning network hubs. Hopefully it will also mean lower fees for users, which will make Bitcoin more popular, drive up the price, and make up for the lower transaction fees paid to miners. Q: 5) The concept of lighting network and sidechains have been out of one or two years already, when do you think they will be fully deployed. A: 5) Sidechains are already “fully deployed” (unless you mean the version of sidechains that doesn’t rely on some trusted gateways to move bitcoin on and off the sidechain, which won’t be fully deployed for at least a couple of years). I haven’t seen any reports of how successful they have been. I think Lightning will take longer than people estimate. Seven months ago Adam Back said that the lightning network might be ready “as soon as six months from now” … but I would be surprised if there was a robust, ready-for-everybody-to-use lightning-capable wallet before 2018. Q: 6)Regarding the hard fork, Core team has assumed that it will cause a chain-split. (Chinese miners are very intimitated by this assumption, I think this is the major reason why most of the Chinese mining pools are not switching to Classic). Do you think Bitcoin will have a chain-split? A: 6) No, there will not be a chain split. I have not talked to a single mining pool operator, miner, exchange, or major bitcoin business who would be willing to mine a minority branch of the chain or accept bitcoins from a minority branch of the main chain. Q: 7) From your point of view, do you think there is more Classic supporters or Core supporters in the U.S.? A: 7) All of the online opinion pools that have been done show that a majority of people worldwide support raising the block size limit.
Q: Which is more in line with the Satoshi’s original roadmap, Bitcoin Classic or Bitcoin Core? How to make mining pools support and adopt Bitcoin Classic? A: Bitcoin Classic is more in line with Satoshi’s original roadmap. We can’t make the mining pools do anything they don’t want to do, but they are run by smart people who will do what they think is best for their businesses and Bitcoin.
Q: Do you have any solution for mining centralization? What do you think about the hard fork of changing mining algorithms? A: I have a lot of thoughts on mining centralization; it would probably take ten or twenty pages to write them all down. I am much less worried about mining centralization than most of the other developers, because Satoshi designed Bitcoin so miners make the most profit when they do what is best for Bitcoin. I have also seen how quickly mining pools come and go; people were worried that the DeepBit mining pool would become too big, then it was GHash.io… And if a centralized mining pool does become too big and does something bad, the simplest solution is for businesses or people to get together and create or fund a competitor. Some of the big Bitcoin exchanges have been seriously considering doing exactly that to support raising the block size limit, and that is exactly the way the system is supposed to work-- if you don’t like what the miners are doing, then compete with them! I think changing the mining algorithm is a complicated solution to a simple problem, and is not necessary.
Q: Last time you came to China, you said you want to "make a different". I know that in USA the opposition political party often hold this concept, in order to prevent the other party being totally dominant. Bitcoin is born with a deep "make a different" nature inside. But in Chinese culture, it is often interpreted as split “just for the sake of splitting”, can you speak your mind on what is your meaning of "make a different"? A: I started my career in Silicon Valley, where there is a lot of competition but also a lot of cooperation. The most successful companies find a way to be different than their competitors; it is not a coincidence that perhaps the most successful company in the world (Apple Computer) had the slogan “think different.” As Bitcoin gets bigger (and I think we all agree we want Bitcoin to get bigger!) it is natural for it to split and specialize; we have already seen that happening, with lots of choices for different wallets, different exchanges, different mining chips, different mining pool software.
Q: 1) The development of XT and Classic confirmed my thoughts that it is nearly impossible to use a new version of bitcoin to replace the current bitcoin Core controlled by Blockstream. I think we will have to live with the power of Blockstream for a sufficient long time. It means we will see the deployment of SegWit and Lighting network. If it really comes to that point, what will you do? Will you also leave like Mike Hearn? A: 1) With the development of Blockchain, bitcoin will grow bigger and bigger without any doubts, And also there will be more and more companies related to the bitcoin network. When it comes to money, there will be a lot of fights between these companies. Is it possible to form some kind of committee to avoid harmful fights between these companies and also the situation that a single company controlling the direction of the bitcoin development? Is there any one doing this kind of job right now? Q: 2) My final question would be, do you really think it is possible that we can have a decentralized currency? Learning from the history, it seems like every thing will become centralized as long as it involves human. Do you have any picture for a decentralized currency or even a society? Thanks. A: 2) I think you might be surprised at what most people are running a year or three from now. Perhaps it will be a future version of Bitcoin Core, but I think there is a very good chance another project will be more successful. I remember when “everybody” was running Internet Explorer or Firefox, and people thought Google was crazy to think that Chrome would ever be a popular web browser. It took four years for Chrome to become the most popular web browser. In any case, I plan on working on Bitcoin related projects for at least another few years. Eventually it will become boring or I will decide I need to take a couple of years of and think about what I want to do next. As for fights between companies: there are always fights between companies, in every technology. There are organizations like the IETF (Internet Engineering Task Force) that try to create committees so engineers at companies can spend more time cooperating and less time fighting; I’m told by people who participate in IETF meetings that they are usually helpful and create useful standards more often than not. Finally, yes, I do think we can have a “decentralized-enough” currency. A currency that might be controlled at particular times by a small set of people or companies, but that gives everybody else the ability to take control if those people or businesses misbehave.
Hi Gavin, I have some questions: Q: 1) I noticed there are some new names added to the classic team list. Most people here only know you and Jeff. Can you briefly introduce some others to the Chinese community? A: 1) Tom Zander has been acting as lead developer, and is an experienced C++ developer who worked previously on the Qt and Debian open source projects. Pedro Pinheiro is on loan from Blockchain.info, and has mostly worked on continuous integration and testing for Classic. Jon Rumion joined recently, and has been working on things that will make life for developers more pleasant (I don’t want to be more specific, I don’t want to announce things before they are finished in case they don’t work out). Jeff has been very busy starting up Bloq, so he hasn’t been very active with Classic recently. I’ve also been very busy traveling (Barbados, Idaho, London and a very quick trip to Beijing) so haven’t been writing much code recently. Q: 2) if bitcoin classic succeeded (>75% threshold), what role would you play in the team after the 2MB upgrade finished, as a leader, a code contributor, a consultant, or something else? A: 2)Contributor and consultant-- I am trying not to be leader of any software project right now, I want to leave that to other people who are better at managing and scheduling and recruiting and all of the other things that need to be done to lead a software project. Q: 3) if bitcoin classic end up failed to achieve mainstream adoption (<75% 2018), will you continue the endeavor of encouraging on-chain scaling and garden-style growth of bitcoin? A: 3) Yes. If BIP109 does not happen, I will still be pushing to get a good on-chain solution to happen as soon as possible. Q: 4) Have you encountered any threat in your life, because people would think you obviously have many bitcoins, like what happened to Hal Finney (RIP), or because some people have different ideas about what bitcoin's future should be? A: 4) No, I don’t think I have received any death threats. It upsets me that other people have. Somebody did threaten to release my and my wife’s social security numbers and other identity information if I did not pay them some bitcoins a couple of years ago. I didn’t pay, they did release our information, and that has been a little inconvenient at times. Q: 5) Roger Ver (Bitcoin Jesus) said bitcoin would worth thousands of dollars. Do you have similar thoughts? If not, what is your opinion on bitcoin price in future? A: 5) I learned long ago to give up trying to predict the price of stocks, currencies, or Bitcoin. I think the price of Bitcoin will be higher in ten years, but I might be wrong. Q: 6) You've been to China. What's your impression about the country, people, and the culture here? Thank you! A: 6) I had a very quick trip to Beijing a few weeks ago-- not nearly long enough to get a good impression of the country or the culture. I had just enough time to walk around a little bit one morning, past the Forbidden City and walk around Tianmen Square. There are a LOT of people in China, I think the line to go into the Chairman Mao Memorial Hall was the longest I have ever seen! Beijing reminded me a little bit of London, with an interesting mix of the very old with the very new. The next time I am in China I hope I can spend at least a few weeks and see much more of the country; I like to be in a place long enough so that I really can start to understand the people and cultures.
Q: Dear Gavin, How could I contact you, we have an excellent team and good plans. please confirm your linkedin. A: Best contact for me is [email protected] : but I get lots of email, please excuse me if your messages get lost in the flood. 15. satoshi Q: Gavin, you've been both core and classic code contributor. Are there any major differences between the two teams, concerning code testing (quality control) and the release process of new versions? A: Testing and release processes are the same; a release candidate is created and tested, and once sufficiently tested, a final release is created, cryptographically signed by several developers, and then made available for download. The development process for Classic will be a little bit different, with a ‘develop’ branch where code will be pulled more quickly and then either fixed or reverted based on how testing goes. The goal is to create a more developer-friendly process, with pull requests either accepted or rejected fairly quickly.
I am a bitcoin enthusiast and a coin holder. I thank you for your great contribution to bitcoin. Please allow me to state some of my views before asking:
I'm on board with classic
I support the vision to make bitcoin a powerful currency that could compete with Visa
I support segwit, so I'll endorse whichever version of bitcoin implementation that upgrades to segwit, regardless of block size.
I disagree with those who argue bitcoin main blockchain should be a settlement network with small blocks. My view is that on the main chain btc should function properly as a currency, as well as a network for settlement.
I'm against the deployment of LN on top of small block sized blockchain. Rather, it should be built on a chain with bigger blocks.
I also won’t agree with the deployment of many sidechains on top of small size block chain. Rather, those sidechains should be on chain with bigger blocks.
With that said, below are my questions: Q: 1) If bitcoin is developed following core's vision, and after the 2020 halving which cuts block reward down to 6.125BTC, do you think the block transaction fee at that time will exceed 3BTC? A: 1) If the block limit is not raised, then no, I don’t think transaction fees will be that high. Q: 2) If bitcoin is developed following classic's vision, and after the 2020 halving which cuts block reward down to 6.125BTC, do you think the block transaction fee at that time will exceed 3BTC? A: 2) Yes, the vision is lots of transactions, each paying a very small fee, adding up to a big total for the miners. Q: 3) If bitcoin is developed following core's vision, do you think POW would fail in future, because the mining industry might be accounted too low value compared with that of the bitcoin total market, so that big miners could threaten btc market and gain profit by shorting? *The questioner further explained his concern. Currently, its about ~1.1 billion CNY worth of mining facilities protecting ~42 billion CNY worth (6.5 Billion USD) of bitcoin market. The ratio is ~3%. If bitcoin market cap continues to grow and we adopt layered development plan, the mining portion may decrease, pushing the ratio go even down to <1%, meaning we are using very small money protecting an huge expensive system. For example, in 2020 if bitcoin market cap is ~100 billion CNY, someone may attempt to spend ~1 billion CNY bribe/manipulate miners to attack the network, thus making a great fortune by shorting bitcoin and destroying the ecosystem. A: 3) Very good question, I have asked that myself. I have asked people if they know if there have been other cases where people destroyed a company or a market to make money by shorting it -- as far as I know, that does not happen. Maybe because it is impossible to take a large short position and remain anonymous, so even if you were successful, you would be arrested for doing whatever you did to destroy the company or market (e.g. blow up a factory to destroy a company, or double-spend fraud to try to destroy Bitcoin). Q: 4) If bitcoin is developed following classic's vision, will the blocks become too big that kill decentralization? A: 4) No, if you look at how many transactions the typical Internet connection can support, and how many transactions even a smart phone can validate per second, we can support many more transactions today with the hardware and network connections we have now. And hardware and network connections are getting faster all the time. Q: 5) In theory, even if we scale bitcoin with just LN and sidechains, the main chain still needs blocks with size over 100M, in order to process the trading volume matching Visa's network. So does core have any on-chain scaling plan other than 2MB? Or Core does not plan to evolve bitcoin into something capable of challenging visa? A: 5) Some of the Core developer talk about a “flexcap” solution to the block size limit, but there is no specific proposal. I think it would be best to eliminate the limit all together. That sounds crazy, but the most successful Internet protocols have no hard upper limits (there is no hard limit to how large a web page may be, for example), and no protocol limit is true to Satoshi’s original design. Q: 6) If (the majority of) hash rate managed to switch to Classic in 2018, will the bitcoin community witness the deployment of LN in two years (~2018)? A: 6) The bottleneck with Lightning Network will be wallet support, not support down at the Bitcoin protocol level. So I don’t think the deployment schedule of LN will be affected much whether Classic is adopted or not. Q: 7) If (majority) hash rate upgraded to blocks with segwit features in 2017 as specified in core's roadmap, would classic propose plans to work on top of that (blocks with segwit)? Or insist developing simplified segwit blocks as described in classic's roadmap? A: 7) Classic will follow majority hash rate. It doesn’t make sense to do anything else. Q: 8) If most hash rate is still on core's side before 2018, will you be disappointed with bitcoin, and announce that bitcoin has failed like what Mike did, and sell all your stashed coins at some acceptable price? A: 8) No-- I have said that I think if the block size limit takes longer to resolve, that is bad for Bitcoin in the short term, but smart engineers will work around whatever road blocks you put in front of them. I see Bitcoin as a long-term project. Q: 9) If we have most hash rate switched to classic's side before 2018, what do you think will be the fate of Blockstream company? A: 9) I think Blockstream might lose some employees, but otherwise I don’t think it will matter much. They are still producing interesting technology that might become a successful business. Q: 10) If we have most hash rate still on core's side before 2018, what do you think will be the fate of Blockstream company? A: 10) I don’t think Blockstream’s fate depends on whether or not BIP109 is adopted. It depends much more on whether or not they find customers willing to pay for the technology that they are developing. Q: 11) If we have most hash rate still on core's side before 2018, what do you think will be the fate of companies that support classic, such as Coinbse, bitpay, and Blockchain.info? A: 11) We have already seen companies like Kraken support alternative currencies (Kraken supports Litecoin and Ether); if there is no on-chain scaling solution accepted by the network, I think we will see more companies “hedging their bets” by supporting other currencies that have a simpler road map for supporting more transactions. Q: 12) If we have most hash rate switched to classic's side before 2018, will that hinder the development of sidechain tech? What will happen to companies like Rockroot(Rootstock?) ? A: 12) No, I think the best use of sidechains is for things that might be too risky for the main network (like Rootstock) or are narrowly focused on a small number of Bitcoin users. I don’t think hash rate supporting Classic will have any effect on that. Q: 13) Between the two versions of bitcoin client, which one is more conducive to mining industry, classic or core? A: 13) I have been working to make Classic better for the mining industry, but right now they are almost identical so it would be dishonest to say one is significantly better than the other.
Q: Gavin, can you describe what was in your mind when you first learned bitcoin? A: I was skeptical that it could actually work! I had to read everything I could about it, and then read the source code before I started to think that maybe it could actually be successful and was not a scam.
About a year and a half ago I learned about Bitcoin just prior to The Great Run Up of April 2013. I was immediately captivated by the idea of making an insane ROI of +500% and let greed cloud my perception from the start. To be fair though, I diligently studied Bitcoin: how it worked from mining to transactions, the economic implications, and the freedom it offered from banks. After a few months of research I was sold. I began to pour the little money that I had saved into it, convinced that in a few months time, my investment of $3,000 would soon hit $10,000+. I was right for all the wrong reasons. From the beginning, I thought I had stumbled upon the financial equivalent of the Internet in its infancy. This was going to be the greatest decision of my life. Bitcoin offered a system that allowed people to be their own individual bank while making money in the process. I was also convinced that the US Central Bank was devaluing the dollar through inflation and it was my duty to protect myself and my future. In reality, Bitcoin offers no advantages over the traditional banking system, which I will detail below:
Transaction Fees - Since when has this hurt a consumer other than moving money through the ACH system? In reality, I can pay for everything with my debit and credit cards while receiving rewards points of 2% AND having fraud protection. Be responsible with your money and pay your bill off in full every month and/or set up overdraft protection with your bank. Financial responsibility is a great skill that you will need to have for the rest of your life. Learn it. In reality, the lack of transaction fees only helps sellers while preventing the consumer from filing any charge backs. This sounds ripe for shady businesses to be perfectly honest.
Transaction Speed - Waiting a few minutes for a large sum of money doesn't seem like an issue, but standing around for 10 minutes while your transaction for a $3.50 coffee is confirmed makes you look like an idiot.
Mining - Of all the things that could be done with countless amounts of energy and an insane amount of processing power, people choose to mine Bitcoin. Why not donate your computing power to a better cause like helping find cures for Alzheimer's, Huntington's, Parkinson's, and many cancers through protein folding at Stanford University?
Anonymity - Bitcoin isn't really anonymous, but in fact pseudo-anonymous. All transactions are recorded on the Blockchain so there will always be proof of a transaction occurring. You can get around this through tumblers (Great for money laundering!) that pool a bunch of different transactions into one address and then disperses the money to the respective recipients. But really, who the fuck needs this unless you are buying drugs or don't want your SO seeing porn charges on your statement? If you want a little weed or coke it's really not that hard to meet a local connection and stop living in the stone age and use PornHub (NSFW).
Security - Bitcoin's ideology revolves around the idea of a "trustless" system. The problem is, Bitcoiners blindly trust the institutions that they do business with. Mt. Gox, Silk Road, Butterfly Labs. The list goes on. Consumers need protection and storing your life savings on your computer hard drive that is prone to failure, physical damage, and hacking is not secure in the least. Not to mention the ridiculously long and tedious steps that need to be followed to create a paper wallet. FDIC insurance and consumer protection is what the general population wants and needs. If a 5 year and old and an 80 year old can't do it, nobody can. Let's also not forget that the entire system has a huge flaw in that a 51% attack (currently prevented by ghash.io's word) would destroy Bitcoin in a heart beat.
Currency Devaluation - Of all the things that I have gained from Bitcoin, an interest in economics is by far the best. Reading a ton of crap from a bunch of crazy Libertarians will bend your perception of economic reality though. I was berated with the idea that the Federal Reserve was the devil and that monetary inflation was robbery. Although there are legitimate concerns with FED policy, I am extremely grateful for their independence from partisan politics during the 2008 financial crisis. Nothing was done by Congress in crunch time and barely anything has been done by them since. Without the FED we would have been completely screwed. As for inflation, the economy we live in today would not exist without it. If money were deflationary (like Bitcoin) everybody would hoard it with the idea that they would be richer tomorrow, effectively stunting the growth of the economy. This is exactly what is happening to Bitcoin. People are treating it as an investment with the hopes of its value increasing dramatically. Bitcoin-USD exchange volume hasn't been this low during a 3 month period since just before the last run up in price which suggests that people are treating it as a commodity rather than a currency.
Payment Processors - Companies like Bitpay and Coinbase seem to serve a good purpose in creating liquidity for Bitcoin. Unfortunately, when a major company (such as Overstock, Dell, Virgin, etc.) chooses to accept Bitcoin through these services they are undoubtedly converting 99% of the money directly into dollars. This does nothing for Bitcoin other than promote it, subsequently fueling the pyramid scheme.
Ever since the last run up in price during the month of December, I have become disillusioned by Bitcoin and the incessant promotion over in /Bitcoin. None of the above mentioned flaws are actually good for Bitcoin. Nor is Bitcoin a safe investment if you are looking to store your money. If you want Bitcoin to be a currency it has to be relatively stable during periods of high volume; which is the exact opposite of how it acts. I sold my initial position in Bitcoin and now am sitting on a decent amount because I know that the pyramid scheme will continue for the near future and will look to cash out during the next run up. To be honest though, I think the technology is quite amazing (especially how it has overcome the double-spend problem) and would not be surprised if future financial instruments or other technologies are based off of the original concept. I do however think that Bitcoin is a pyramid scheme and I am grateful that I have come to this conclusion before it's too late.
Fire the miners: why central planning does not work
It is well understood that the entire ecosystem has roughly built itself into a $15b ecosystem via the security and reward structure which Satoshi built to power bitcoin's supply and issuance. Trustlessness is built into the monetary policy of the currency. We don't need to ask the miners to do anything, because the structure of the code incentivizes them to mine and secure transact as part of the bitcoin economy. Are there edge cases? Absolutely. Throughout bitcoin's history, discussion has always been present at various academic levels around the possibilities where miners may abuse the system. There have been subsequent discussions on backup security procedures if the security system of the network is compromised. An easy and simple method is a POW fork. Miner(s) behaving maliciously? No prob, fork off, the economic majority will continue mining the main chain and they're kicked off. But recently, people has put forth the idea of "firing" the miners. Not that any malicious acts have occurred, but that the simple lack of miner support for a core developer proposal is odious. That this lack of action is equivalent to an act upon bitcoin. But we know that's not true. Why would miners blow up the thing they use to make money off of? The block reward (not fees) comprise 95% of miner revenue. Fees are a few sprinkles on top of a block reward cake. They have more monetary incentive than anyone to ensure that bitcoin value grows, and that it grows in-line with the block halvings to ensure that their business is protected, remaining profitable. Notice that none of these miners are securing the blockchain because a few of us are old high school buds and they're doing us a favor, or because they so idealistically believe in this vision of bitcoin, we're not begging the miners to do anything. Bitcoin works because incentives are aligned. The code has created a productive asset that serves as an effective currency as it grows. The miners are doing all of this because mining and maintaining these assets earns them money; it's how they make a living. Not surprisjng then that we've never even seem close to a hint of an at a miner attack on the bitcoin network. A 51% attack is often discussed, but we've never seen one. In fact, there was a period of time when Ghash.io did have over 51% of the hash rate. Guess what happened? They took no malicious act, and in the long term, cloud miners left the pool to revert to an equilibrium where miners can't even attack that vector. But the point is, the entire market is incentived to cooperate. That's how the bitcoin economy works and precisely why it is so successful. So we can't fire the miners even if we wanted to. They are actually operating as businesses and have explicit performance needs met to manage a p&l. This isn't a fun development playground for coders. Miners aren't taking an ideological stance here in some bitcoin holy war, they are just making sure the bitcoin network continues to operate. They rejecting code that does not work. Forking away does not solve the fundamental scaling problem, because it does not resolve the issue for the miners. Begging or threatening the miners will only do harm. Central planning by government bureaucrats is never productive relative to a free market. Forcing the means of production to take some action, or to produce in a certain way (below 1mb blocks) is inefficient. The only solution is to actually work with the miners to determine how to best secure the blockchain for the cheapest price, because again, we all have the same incentives. Tl:Dr talk of firing miners is all hot air. Also miners are friends not food
Achieving consensus in distributed systems – that chink in the armor hasn't gone away
First a disclosure: My name is Will, I founded Novauri, and our team is building a service that will allow users to buy and sell bitcoin in the US while keeping full control of their private keys as a mandatory design element, not an option. Please SIGN UP for our US only closed beta test in 2015 here. It's super fast, takes 20 seconds, and we'll guarantee no transaction fees for the life of your account. Plus our rates will be highly competitive. Read all about it on the website! I don’t like marketing, I intensely hate the spam I see on the forums, so my approach is going to be to write (semi) intelligent posts and hopefully gain customers through interaction and discourse, as opposed to spamming it up with astroturf and pictures of hipsters having fun that you could be like if you used our product. Now… my thoughts. Proof of work – a tragedy of the commons Not very long ago a mining pool called ghash.io reached 55% bitcoin mining power. It’s widely known that POW suffers from the tragedy of the commons. Mining is SHA256x2, which makes it really simple to build coin flipping application specific integrated circuits (ASICs) that run this faster than general purpose processors. This creates an economic incentive towards centralization where miners who can access the best ASICs first have a major advantage in hashing power per dollar. Pools, a solution to a market demand that exacerbates the problem A second problem is a solution to an economic demand, the existence of mining “pools”. Because a block is solved only every 10 minutes, as bitcoin scales, it becomes increasingly unlikely to ever solve a block by yourself, even with substantial processing power. Mining pools allow the “little guys” to participate too and contribute their hashing power to a pool of miners. This way they receive a portion of any block solved by the pool, enabling a steady and more consistent return on their investment in hardware, facilities and electricity. Yet while pools solve a problem, they create a second issue, the centralization of mining power by pool operators. Because the blocks are “solved” by the managing pool directly, this gives the pool the same controls and ability to act poorly as if they had the hardware themselves. One might argue that market forces will naturally correct things if a mining pool approaches 51%, but this has been disproven in practice with ghash.io. Selfish miners using ghash.io essentially put the entire system in dire peril by letting ghash.io reach 55%. They waited for others to “go first” before switching pools. This is the very definition of “tragedy of the commons”. I would argue it was only the price of bitcoin that changed the miners’ behavior, and reviewing the charts shows that the prices did not lead the mining power concentrations at all, which also defies common wisdom, but in reality is entirely true. P2P pool is a great idea, but it has not offered the same economic benefits to miners as other privately run pools on a balance sheet. Until it does, don't look there for a long term answer. Miners are trying to make a return, and if a pool gives them an advantage, most will use that pool over P2P. Mining is not a charity. Proof of state – lack consensus and bring monopoly issues Some might point to proof of stake as a potential solution (POS). Put very simply, POS is where by virtue of the fact that you own X virtual currency, you have a proportionate chance to win a vote or tiebreaker when confirming transactions. Unfortunately, POS fails to provide a disincentive to fork and suffers from the monopoly problem. Ownership carries voting rights, and there is nothing wasted (no work) by voting for both sides of a fork. There is no consensus, so POS systems are generally hybrid models where POW is used to achieve consensus of forks regardless. POS also has a monopoly problem, which are as serious as POW’s problems. So solving bitcoin's problems with POS seems like a dead end. Very smart people have tried, and so far nothing viable has materialized that is stable enough to be trusted with something as mature and valuable as bitcoin. So… let’s relist all of the bad news!!!
POW suffers from the tragedy of the commons, in that economies of scale right now favor centralization of mining power, yet this same centralization threatens security, which hurts everyone including the centralizing miner. What’s worse are mining pools which serve a valid purpose (normalizing rewards for mining) but compound the issue of centralization.
POS fails because of monopolies and lack of consensus when forks occur.
Solutions thus far are myopic, influenced by personal interests or blimp sized egos (I am one to talk), and are often more academic than pragmatic. Most are just to complicated to work or to be implemented safely without years of refinement in an alt coin. Well, is there hope? What is the practical thing to do? Should we do nothing? I would argue that there are three problems we must solve at once, and all three problems are very much interrelated. It’s one @[email protected]@ of a puzzle. We need to: 1) Make pooled mining uneconomical 2) Figure out a way to make small scale mining cost advantageous 3) Do 1 and 2 but allow normalized returns for little guys so they can run a small business or profitable hobby, without it being a lottery ticket. Some say that a 51% issue would not be the end because we would know very quickly who the bad actor is and could react accordingly. I’m a little more concerned. A real shakeup in the core of bitcoin would shake confidence, and could set us back years. I feel we should as a community put a much higher priority on finding a practical, viable solution. Nothing academic, nothing incredibly complicated, but something that can shift the economics of the situation and solve the three problems listed above. While we have plenty of issues around individual usability, this is, in my humble opinion, the largest remaining vulnerability in bitcoin today. So… what to do? How do we solve all three of these problems at once? What are the possible combinations of solutions that work? Let me take a stab at it… 1) Deterring pooled mining Let’s give more serious consideration to two-phase mining. The idea is to keep (SHA256(SHA256(header))) and add a requirement for (SHA256(SIG(header, privkey))), requiring the block to be signed with the private key of the miner. This kills pooled mining, dead. Miners can solve SHA256x2 but the pool needs the miner’s private key to sign the block header, which would allow the miner to steal the reward, which kills pools very fast. 2) Disincentivizing centralization of mining power 2a) Small scale heat recovery systems We need to get people thinking about small scale heat recovery systems built around mining hardware. This will allow mining activity to serve as a source of heat in cold climates, or perform work where heat is required. One example might be liquid submersion of the asic or heatsinks couples with a pump, radiator and fan in small, modular design might be economically viable. Electric heat is used very commonly, and when powered from clean power sources like solar, geothermal, nuclear (yes, nuclear I would count in the “clean” bucket) and wind, the net is a zero emission system that heats like an electric heater but adds security to the financial system in return, and generates profit for the beneficiary. 2b) Rotating or amorphous block hashing algorithms Another possibility is to rotate or add complexity to the hash algorithms used to solve blocks. Instead of SHA256x2, perhaps SHA256x2 is rotated with scrypt? Perhaps there are many algorithms that rotate to add even more complixity. This would at a minimum make it much harder to design ASICs, and would institute a memory requirement as well. This would at least close the gap between specialized mining operations and home hobbyists. The problem is, what miner in their right mind would go with a hard fork in this direction? This is likely unviable because of economics. 2a is probably the way to go. Is there a 2c or d? 3) Normalizing returns The issue here is that coinbase generation in a decentralized model is like winning the lottery. Your 2a heater would be unlikely to ever solve a block in it’s lifetime. So this last issue is even harder to solve than 2. 3 is the reason mining pools were created in the first place. How do you increase reward frequency while lowering reward to generate a more predictable return? Or maybe we are asking the wrong question or thinking in the wrong direction or dimension? Is there a way to centralize and normalize rewards in a safer way? Could the heater's price be subsidized by the mining activity if that activity was safely hard wired in the heater's hardware to pay block rewards to the reseller or manufacturer? Could electricity rates be offset by rewards going to electricity companies as a subsidy to completely smooth out the return on investment for a bitcoin heater? That last one is tough and would need a really great strategy to reach a critical mass. Does anyone smarter than me have an idea? This is really the problem. It’s three interrelated issues. In closing, sign up for our closed US beta. There are still some spots left. We're poor but talented and our hearts are in the right place. Thank you!
Here's a security section I quickly dashed off last night. What I need here is to go through some of the insane BS people recommend to secure your bitcoins.
What I need to add to the end of this is to go through some of the insane BS people recommend to secure your bitcoins, if there are any examples that are both hilarious and actually referenced by other bitcoiners as sensible and obvious. Not just birdbaths, but highly-upvoted zillion-part lists, etc. (I have got to finalise a first draft, this has taken too long already.) “Secured by math:” how the blockchain is secured The phrase “secured by math” promises many things, but it’s also important to note what it doesn’t promise. Bitcoin relies on distributed consensus, and approximating an acceptable solution to deciding the correct transaction record: the blockchain is what a majority of mining capacity says it is. Mining secures the blockchain by adding transactions to a block and adding a hash to that block that wins the current ten minutes’ mining reward lottery. Bitcoin’s consensus model relies on the fact that you can’t outdo this casually. You can outdo it if you control more than 50% of hashing power – a “51% attack.” Any miner who had over 50% could write the longest blockchain to say whatever they liked and have it stick. They could double-spend confirmed transactions, or prevent any new transactions they didn’t approve of. Even if you have less than 50%, controlling a substantial fraction of the hashing power means you can still get transactions that didn’t happen into the accepted blockchain – a “49% attack” or “Finney attack” (first written up by Hal Finney). Researchers have identified several possible attacks a selfish miner could mount, from 25% of the hash rate upward. Neither of these are hypothetical issues – the usual presumption is that nobody would do this as it would destroy faith in Bitcoin, but mining naturally centralises from economies of scale (as we will detail later), and mining pool GHash.io topped 50% of the hash rate several times in June and July 2014, though they then committed never to go over 40%. GHash doing this was particularly problematic, as the pool had in fact double-spent against a gambling site in 2014. They blamed this on a rogue employee, but this demonstrates how the self-interested incentives for an individual may be different to those for an organisation. In practice, the economies of scale in Bitcoin mining have not been overcome. As of November 2016, seven pools controlled 75% of the hash rate, with the largest individual pool at 19.3%. There is no regulatory control to ensure that multiple pools cannot have a single owner; we may already have over 50% of mining substantially controlled by a single entity. Securing your own bitcoins: being your own bank “Secured by math” does not promise security of your own bitcoins. Indeed, “be your own bank” means you take on the job of providing all security and having the technical understanding to do so. The Bitcoin Wiki offers a page with step-by-step instructions on how to secure your personal Bitcoin wallet, of a degree of complication that would dismay even a typical IT professional, let alone a casual user. This is why the vast majority of users store their bitcoins on an exchange, in the manner of a savings bank, even as they are largely unregulated and uninsured. [insert hilarious example instructions here]
A little late, but as promised here is Part 2 of the Beginner’s Guide to Exchanges. I would like to sincerely thank everyone for their support and feedback in making these. Link to Part 1 This time I also made a Google Docs survey in the hopes of sharing the results with the community. I thought we could share what we use as a whole and why redditors choose the exchanges they do. For skeptics (as you all should be), I assure you that I am not collecting personal information. This is for recreation and if you are still wary, then by all means abstain! Link to Survey In Part 3 I will be wrapping up this series by covering decentralized, semi-decentralized, and derivative exchanges. Here it goes!
00 – Concepts and Definitions (Continued)
What is FinCEN? This is an agency within the US Dept. of Treasury that collects and analyzes information about financial transactions. It is meant to prevent financial crimes and money laundering both by businesses and individuals. In 2011, FinCEN defined digital currencies as fiat and started cracking down on those in the crypto world. Since then, every exchange serving US citizens has been trying comply with regulations otherwise they face severe penalties. Thank them when exchanges as for your Address and an ID.
What is the ICO (UK Regulatory Body)? This stands for the Information Commissioner’s Office and it is the UK counterpart to FinCEN - a regulatory office that reports directly to Parliament. ICO oversees compliance of the Data Protection and Freedom of Information Acts. It is meant to help companies and individuals keep their private information private, and can enforce this with penalties up to £500,000 when personal information is recklessly stored or leaked.
What is APR? Stands for Annual Percentage Rate.
What is Arbitrage? Arbitrage trading means to take advantage of price differences between markets. For example, say Poloniex lists ETH at $400, while Kraken lists it at $500. Buy low at Poloniex and then sell high on Kraken and you just made yourself a hundred bucks. Simple!
What is a Coinswap/Crypto-converter? Basically, a coinswap is a broker. If liken an exchange to a marketplace where buyers and sellers meet to agree on a price, then a Coinswap is a person who goes to the market on your behalf. Give them what you want to sell, and they will come back with what you want to buy. They take a small commission, give you a fair market rate (or close to it), and sometimes don’t even ask for your identity. Coinswaps are popular because they are convenient and offer coin pairs that exchanges sometimes cannot.
Overview: Founded in late 2013 by Gerald Cotton in Vancouver, Quadriga should be a source of national pride. While 4 major Canadian exchanges suddenly closed between 2015 and 2016, Quadriga survived. Then In 2015, Quadriga became the first exchange to attempt being listed publicly by enrolling for enlistment on the Canadian Stock Exchange (CSE). However, it ultimately failed to do so after being confronted with restrictions and regulations.
Withdrawal/Deposit Fees: Low deposit and withdrawal fees in comparison to other exchanges. A little unorganized on their official site
Linked Bank Transfer
Deposit 1%/ Withdraw Free
Free (Withdraw Only)
1% (Withdraw Only)
Free (Withdraw Only)
Security: Quadriga was quite notably lost of 67,000 ETH earlier this month, after an expensive mistake involving the Geth 1.5.9 upgrade. Apparently, outgoing addresses were incorrectly entered without 0x at the beginning of addresses and the sent ETH became trapped. Yet Quadriga has taken full responsibility and reassured customers that it will not affect their accounts.
Google Authenticator or Email 2FA Available
Undisclosed amount of funds in cold storage
3rd Party Security provided by CloudFlare
Expired $50 bounties
Verification: Quadriga CX enables alternative instant verification with an Equifax Credit Score Report.
Digital only, Limits Vary
Customer Service: Negative reviews are hard to come by, but perhaps that is due to the smaller size of this exchange. The FAQ is a little disorganized with a lack of tabs or categories on the site. However, support offers a direct phone line and email support. Also u/QuadrigaCX seems very active and responsive in the Bitcoin CA subreddit.
Bottom Line: The handling of the ETH loss was handled professionally and quickly. And as a Canadian, lower deposit and withdraw fees are probably impossible to find somewhere else. Trading fees are a little high, but that is the trade off. It seems they have weathered some ugly storms other Canadian exchanges could not and are a trustworthy exchange going into the future.
05 – Fiat Exchanges – Europe
Overview: CEX.io is started in London in 2013 both as an exchange and a cloud mining provider with its acquisition of Ghash.io. In 2014, Ghash was the largest Bitcoin mining pool contributing to over 42% of the mining power and mining over $200 million in BTC. In October of 2014 Ghash closed yet CEX.io lived on as an exchange.
Verification: With a lot of backlash from the Bitcoin community, CEX has registered with FinCEN and ICO in the UK, while also implementing Anti-Money Laundering (AML) and Know-your-Customer (KYC) policies. Once these policies came into effect and ID verification was requested, many original Ghash users abandoned the exchange. Exchange allows for linking of Facebook and Google+ accounts. Not a good option IMO.
ID + Photo
$10,000 Daily/$100,000 Monthly
Customer Service: Customer complain are abound here, and for justified reasons with hidden deposit and withdrawal fees. However it seems the company is quick about inquiries and verification, stating that most inquiries are filled in 24 hours. The FAQ is comprehensive which you should come to expect from established exchanges. Despite some unhappy customers, tt is good to see that they care about their reputation and their product.
Bottom Line: If you are already invested in crypto, CEX.io has some of the lowest trading fees in the game. However, they are clearly taking advantage of inexperienced users and those looking to exchange fiat for the first time. When purchasing with their FOK buying service (using instant credit card transactions), not only is the buy rate not at market price, but a 7% fee is added. This is price-gouging, this is FOK-ing unreasonable. I understand that this service offers something not found elsewhere, but additionally 1% crypto and $50 USD withdrawal fees makes these actions questionable if not just plain greedy.
BTC-E / XBTC-E
Overview: BTC-e is has been operating out of Russia since 2011 and provides language support in English, Chinese, and Russian. Perhaps due to this flexibility, it has high volumes of BTC, LTC, and ETH. It has an unclear connection to xBTCe, but both link to each other in the FAQ of the respective sites. A feature that is provided by BTC-e not seen elsewhere is software for trading called MetaTrader 4. This software seems a little clunky, but includes some TA features.
Security: BTC-e was hacked way back in 2013/2014 and reportedly $35,000 of BTC was stolen. Since then it has had a relatively clean record. This Digiconomist review is a thorough and detailed read, but unsure.
Google Authenticator Available
Must be changed every 6 months
3rd Party Security Services provided by CloudFlare
Verification: Since late May, there have been a shit storm of reports claiming BTC-e is locking funds for previously unverified users. In the FAQ users are asked to register at XBTC-e and within 10 days the account will be unblocked. It is unclear how the websites are connected or related to each other and 10 days is eons in crypto time.
No Stated Limits
Customer Service: Live Chat is supported during operating hours and the FAQ is listed in Russian and English. Resources are a little unorganized, but complete none-the-less. Bad reviews and complaints are plentiful with the long history of the exchange and the recent troubles with account verification for some long time users.
Bottom Line: I’ve got to be honest that I personally despise the interface at these 2 sites. Both give Yahoo! GeoCities and the original SpaceJam website a run for their money in terms of web design. Perhaps it makes up for it with some free TA software and a large daily volume. But it comes to say that the longevity of this exchange is its biggest strength.
Overview: Liqui is based out of Kiev, Ukraine. As a digital exchange, it does not support fiat currencies and is competing with the likes of Bittrex and Poloniex as it lists dozens of altcoins. The feature that differentiates Liqui is its ‘Interest’ feature which was introduced to increase traffic and volume to the newer exchange. It works similarly to depositing money into a savings account - deposit ETH into an account and earn 24% APR (or .066% daily interest) which is deposited every 24 hours. There is some fine print about deposit limits and interest calculations, but how it is presented is clear and straightforward. Unfortunately the limit of 1000 ETH needed by Liqui is currently full, so you will need to wait until others withdraw ETH or the limit is increased to participate.
Verification: There are no deposit/withdrawal limits and no verification levels. In order to start trading, all that is needed is an email address.
Customer Service: Searching for user reviews shows mixed results about Liqui’s customer service. The fact that it supported on several platforms, is reassuring. Contact Support@liqui.freshdesk.comBy Twitter@Liqui_ExchangeBy Telegram@Liqui
Bottom Line: The design and simplicity of Liqui stands out in my opinion. It is like what Poloniex could be if they just cleaned the UI/UX a bit. I like that it immediately gets into the trading charts without having to click around and if you miss the trollbox then this is your site. Like other smaller exchanges there are doubts over the reputation and reliability due to the opaque nature of the operations and development team. If you are looking for an alternative to Bittrex or Poloniex, this exchange may be worth investigating.
06 – Fiat Exchanges – South Korea
안녕하세요 여러분! 혹시 우리 한국인 친구 이 보고서를 한국어로 읽고 싶어한다면 알려주세요. 관심이 많이 있다면 간단한 한국어 보고서도 만들 수 있습니다. This year, ETH has taken off like a rocket in the Land of the Morning Calm. With a population of just 50 million, South Koreans account for almost 30% of daily ETH trade volume. Even more surprising is that currently the daily volume of ETH is about 5 times higher than that of Bitcoin on Korean exchanges. Since demand is high, ETH is trading at a premium on Korean exchanges. Some users have been talking about capitalizing off this imbalance by trading on arbitrage between exchanges. For those who have no connection to Korea and hope to do so, I have bad news – all Korean exchanges require a National ID number and access to a Korean bank account. This makes Korean exchanges virtually closed to Korean nationals and those with long-term visas. Sorry everyone.
Overview: Bithumb has all the features of horrid Korean web design - pop-up ads, flashing side-banners, disorganized pull downs, links to cafes/blogs, and generic stock images with embedded text. You can’t even see the exchange before making an account with your email or mobile number. It does support 4 languages, but reveals only poor translation done by Google Translate. In the face of this, this exchange has been trading a daily volume only second to Poloniex. On the bright side, they have the unique options to buy gift certificates/vouchers and remit money overseas.
Overview: Coinone is the second largest Korean exchange, and its design is a breath of fresh air compared to its rival. It offers service in English and Korean and allows for the trading of Bitcoin, ETH, ETC, and Ripple. It has a very comprehensive chart that is highly customizable, but sadly is only gear towards BTC currently. This makes it perfect for margin trading, and in the future I hope they add ETH. They also offer overseas remittance through their service Cross. Coinone support seems above average in their customer service with a PDF guide and an unprecedented landline number for direct support.
Overview: As the smallest of the 3 Korean exchanges, Korbit benefits from its simplicity. It by far has the best design and English support with clear links to services - including remittance, global payment, and their company bio. Like CoinOne they offer a direct phone line for customer inquiries and an extensive FAQ in 2 languages. Similar to the other exchanges, it has insanely low fees for deposits and withdrawals. This is largely thanks to the Korean banking system where wire transfers and mobile banking are commonly used. I recommend anyone interested in Korean exchanges to start here as they also have a reddit presence on u/korbitBTC
With a great deal of anticipation, major Chinese exchanges started trading ETH this summer. Since these exchanges deal huge volumes of Bitcoin already, naturally it was expected that they invest heavily into ETH as well. So far this hasn’t quite lived up to the hype with many exchanges still favoring Bitcoin, Litecoin, Altcoins, and even Ethereum Classic (Gulp). Three of these exchanges underwent inspections by the Peoples Bank of China earlier this year and will be working closely with the government to ease fears of money laundering and market manipulation. There are a lot of Chinese sites, and since my Chinese is non-existent this list is basically just for name recognition. In many ways these sites are very similar in regards to security, verification, and fees compared to their western counterparts; just marketed at a different audience and currency. If users are seriously interested in these exchanges and making reviews, please contribute or ask!
Overview: Number one in Chinese ETH trading, currently overtaking the volume of exchanges like GDAX and Kraken. CoinOne is very accessible with a mobile app, PC trading software, live chat customer support, and wallet services. OK Coin has English for the basic interface, but no detailed information in the FAQ.
Overview: Second in Chinese ETH volume, Huobi mirrors its rival OKCoin in many ways. It has a solid interface, a mobile access, and even the same rumors of faking trading data! Huobi also started with the ambitious motive of having zero trading fees, only to introduce them in January of this year.
Overview: ShapeShift is the leading Coin-converter site and has been since 2014 when it was founded. With great effort put into to eliminating verification requirements and allowing for the exchange of dozens of altcoins, ShapeShift provides a relatively seamless and simple service. The big buttons and bright color scheme immediately differentiates it from other exchanges.
Trading Fees: From the website ShapeShift does not charge a specific fee. Instead, we offer an exchange rate for each coin which changes every 30 seconds with market conditions. We try to earn revenue by offering a profitable exchange rate, and typically we earn in the range of 0.5% (50 basis points). You receive exactly what the exchange rate shows, there is no additional fee (except the tiny miner fee). There are complaints about the fees not being calculated fairly, but no one is forcing any of these users to exchange at the unbalanced rate. Or you could just read what CEO u/evoorhees has to say about it over at the Ethereum subreddit.
Security: After losing $230,000 from a possible internal hack in 2016, ShapeShift contracted the Canadian Security firm LedgerLabs. Afterwards they permanently hired Michael Perklin as Chief Security Information Officer. ShapeShift claims the only information stored during exchanges is the logs of wallets and the transfers between them. This is protected by storing the data across servers in multiple countries with none based in the US.
Customer Service: Customer service is necessary for the inevitable ‘entered the wrong wallet address’ problem from new users. Along with complaints about slow transfers, a simpler platform does not exempt ShapeShift from dealing with tons of angry customers and their problems. I take many of the complaints about unfair exchange rates with a grain of salt, because the problem could have been avoided by the customer. It does seem however that ShapeShift is very responsive, with a presence on almost every social platform imaginable. Even right here on reddit at shapeshiftio
Bottom Line: Especially after the release PRISM, it is obvious that no one is better at simplifying than the ShapeShift team. In order for crypto trading to become mainstream, it need to be easy enough that your grandma could do it. Erik Voorhees understands better than anyone. Instead of being confronted by esoteric graphs, unfamiliar ticker symbols, and a list of registration requirements, ShapeShift differentiates itself from other exchanges in both its interface and ease of use.
Overview: Changelly is a prototype project that was created by developers associated with MinerGate 2013. It has a slightly less sleek interface than ShapeShift, but is still quite intuitive in terms of its pull down exchange bars and other information. Changelly offers Credit Card services like CEX.io, but the fees are currently so expensive that it is hardly worth it. Another downside is the recently introduced email requirement.
Trading Fees: 0.5% Commission Fee with .00042 ETH Network Fee.
Security: It offers 2FA with Google Authenticator and HTTPS protocol.
Verification: A confirmed email address is all that is needed to start trading. You could easily use a throwaway email if there are concerns over privacy. There are also links to your Google+ or Facebook Profile, which seems a little uneccessary.
Customer Service: Like ShapeShift, Changelly suffers in its reviews due to inexperienced users. Those using Credit Cards especially will feel ripped off despite a clear disclaimer stating that rates are high. They have an extensive FAQ, but do not appear to have a ticket system for complaints and their social media pages are more geared for press releases than support. Their subreddit is a similar story in changelly, but their support staff u/changelly_com runs circles trying to solve issues. Because of the honest effort, I believe they can do better and can improve.
Bottom Line: When it comes to criticisms of Changelly, the apple does not fall far from the tree with MinerGate. Users rightfully have some distrust about the lack of opacity in the management and operations of this exchange. I feel that they are more honest and fair in the Credit Card services than CEX.io, but still should cut the service as it generates a ton of bad experiences. If you are looking to convert coins, it seems to be an acceptable service, but some of the benefits are lost with having to verify an email address. In this way it is hard to compete with ShapeShift.
hashes per bitcoin = (network hash rate) / (25 BTC per 10 minutes) = (180 * Th / s) / (25 * BTC / (600 * s) ) = 180 * 600 / 25 * Th / s / BTC * s = 2,700 Th / BTC = 2,700,000,000,000,000 h/BTC share improve this answer follow answered Jul 7 '13 at 9:41. Anonymous Anonymous. 166 2 2 bronze badges. What does the 180 stand for? – powtac Jul 7 '13 at 9:58. That is read from the charts I ... How long to mine one bitcoin in 2020. This question has no fixed answer as there is something called mining difficulty. It is a dynamic parameter that controls hash power needed to mine a bitcoin block. New bitcoins are generated roughly every 10 minutes, but your ability to earn those newly created bitcoins is dependent on how much computational power you have relative to how much ... More importantly, just how long does it take to mine 1 bitcoin? The Short Answer. The short answer is you can’t just mine one bitcoin. Bitcoins are awarded for mining one block and that reward currently sits at 6.25 bitcoins. So technically, it is impossible to mine just one bitcoin. Technicalities aside though, we know that it takes, on average, 10 minutes to mine one bitcoin block and be ... How long does it take to mine 1 Bitcoin? As of Sunday, October 25, 2020, it would take 1,445.9 days to mine 1 Bitcoin at the current Bitcoin difficulty level along with the mining hashrate and block reward; a Bitcoin mining hashrate of 110.00 TH/s consuming 3,250.00 watts of power at $0.05 per kWh, and a block reward of 6.25 BTC. How long does it take to mine 1 bitcoin? It’s a question many people ask when transacting for the first time. The short answer is 10 minutes for a Bitcoin transaction to occur, however there are many factors which extend this time. In this article we will explain what contributes to delaying a transaction past ten minutes to over an hour or a day in some cases. Understanding Crypto Mining ...
How to Mine Bitcoins Using Your Own Computer - YouTube
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