A short video I made to explain the "so what" of taproot in 10 minutes. If you like it, please subscribe to my new youtube channel :)
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The Bitcoin Cash (BCH) chain often advertises how it can upgrade using hard forks (usually indicating how easy it is).
It sounds all well, but in order to do this, you must have centralized control over the chain such that these hard forks can be pushed down to all clients. If clients (i.e. miners) don't upgrade their code, then they will be working on the old chain while everyone else moves on.
With centralization comes risk. The risk that a person or entity in control can act in a way that is not a consensus decision. This is exactly the risk that has materialized on BCH.
Amaury Séchet is the lead developer of Bitcoin ABC (the reference implementation for BCH). He announced that in November 2020 there will be an upgrade on BCH.
He plans to try another "fix" for the BCH difficulty adjustment algorithm (DAA) which by the way suffers from low hashpower in comparison to BTC - and miners "gaming" the chain. I'm not going to comment on the issues with the DAA here - the second change is the real point of issue.
The second improvement is the addition of a new Coinbase Rule.
How can the coinbase rule be "improved" you ask?
The Coinbase Rule improvement is as follows: All newly mined blocks must contain an output assigning 8% of the newly mined coins to a specified address.
And who owns that address? - yes, the developers (Amaury). Basically, they are taxing each new block with an 8% tax rate.
Ask yourself - how can this be the consensus. Well, it isn't. And I hope it is clear at this point that BCH is NOT a decentralized currency.
Does this sound like Bitcoin to you?
I thought I should write a quick post since I haven't done so in a while. I'm still alive ;)
In the past few weeks, I've been busy working on a project related to COVID risk. I've learned quite a bit recently about virology and how to model epidemics. One of the most notable things was the bimodal nature of the disease (where many cases are asymptomatic) means it is challenging to contain or know the prevalence.
Now that there are a few serology studies released, we are beginning to see that the disease has affected more people than previously reported. The good news there is that the infection fatality rate (IFR) is likely not as high as the worst-case estimates, but it's still very significant for the older population. If someone told you that 1 out of every 5-10 older adults who get the disease would die, then maybe we can begin to appreciate it's severity. Not that younger people are free of risk either. The latest estimates have reported that 1 out of every 100 people who get the disease will die from it.
That brings me to much of what I observe and read about in terms of younger people unafraid of the disease, not taking precautions, or engaging in risky behaviour. Just because younger people are less likely to die, they still spread the virus and kill others.
Hopefully, everyone is safe. I am curious to hear about your personal experiences where you are.
I thought I would write a quick progress update on the status of getting LN transactions up again.
I've implemented all of the fixes for the deposits and withdrawals. Theoretically, I could re-enable now. However, I am going to fix up some other aspects as well, which will further improve the safety of funds.
Here is what I am doing:
Once I have these two other improvements complete and tested, I will be turning LN transactions back on.
I noticed strange activity on the ZapRead LN node. I have stopped it for the time being. Apologies for the inconvenience. I will investigate but hopefully there is no issue.
It looks like some kind of bot activity making withdraws.
I'll follow up with an update once I sort it out.
ZapRead.com has registered for the Lightning Hackathon. Please check it out! https://wiki.fulmo.org/wiki/Challenges_May_2020#Zapread.com
The primary challenge I've posted is an authentication challenge - using your Lightning wallet to register for ZapRead, and to log in!
Develop a C# LNURL-AUTH library which can integrate with .NET (MVC) websites.
Chatroom to get started: https://mm.fulmo.org/fulmo/channels/x-zapread
The secondary challenge I have put forward is to develop offline payments for Lightning. Maybe a bit too ambitious?
See you there!
How is Bitcoin doing these days? How does bitcoin today compare with Bitcoin of 2017? It seems like a lot has changed. So, here is a quick look I decided to put together.
Segregated witness was activated in August 2017. It segregates signature data from transactions into blocks past the 1Mb limit - effectively freeing room in the block for more transactions. It also paved the way for other improvements related to future soft-forks as a way to add new features to Bitcoin without disrupting existing users or requiring everyone to update their software. Let's look at segwit adoption:
Not as good as one would have hoped, but the trend is good. In terms of large (i.e. in value) transactions, Segwit has become the sleight majority. In terms of the number of transactions and block-space used, SegWit is now half of the transactions.
That pesky 1Mb block limit, which can't be removed without a hard fork (and associated risk/split/centralization). How has it changed over the last 5 years?
The solid block around 2018 is when blocks were full - fees were sky-high, and we were witnessing a boom in Bitcoin. The blockchain hit a wall. SegWit was new. That seemed to have resolved, and we can now see that blocksize averages of 1.3Mb are common. The blocksize could still be even higher as not everyone is using SegWit yet.
What happened to fees over time?
The fee issues leading up to 2018 is clear - but then, it seems to have settled down. It may not stay that low if the demand for transactions goes up, but we are far from the fee issues we had in 2017 and 2018.
The beta lightning network is still under development, but, it is already very useful. If you are reading this, you've probably enjoyed a few Lightning Network transactions already.
The number of public channels and capacity seems to have reached a plateau. A public capacity of 1000 BTC seems to be the sticky point. Unfortunately (fortunately!), due to the nature of the Lightning Network, we can't see how many transactions are going on. How's that for privacy enhancement? I can say that my lightning node has already conducted almost 130,000 transactions. Yes - that's right 130K! I think I've paid under $1 in routing fees for all of those combined. I also open channels at 1-2 satoshi/byte, so minimal chain fees too.
If we were to have this kind of transaction capacity on the native blockchain, that would take about 52 blocks of space. Also, remember - I am just one of now 12,000 public nodes on the network. I might be among the most active nodes, but I hope that one can see the scaling going on here. At even $0.01 per transaction, that would have cost $1,300 to transact on-chain, likely more.
Keep in mind this is all on a measly 1Mb blockchain.
I think that Bitcoin is in a pretty good place. There are still things to work on (i.e. keeping fees low), but the future is bright. We are not in a corner, and there are multiple exciting developments in the works. The change that has me most excited is BIPs 340, 341, and 342. These Bitcoin Improvement Proposals add (through soft-fork) Schnorr Signatures, Taproot, and Tapscript. I should do a future post to explain what this gives us in more detail - but I'll say now that it gets me really excited for the future of Bitcoin. I'm talking about privacy, scaling, safety, and powerful smart contracts.
* Note that nowhere in this post did I make any mention of market prices.
If you haven't already noticed, I've updated the financial page and the chat user interface. Again the goal of the update is efficiency.
The next major update to make is the post editor. This one may take some time, and it is a very important part of the site (obviously).
Thanks for your patience the last week as parts of the site were broken. I've probably broken some other things along the way which slipped by the unit testing - so if you notice anything, please let me know!