/r/BitcoinDiscussion

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A place for cultivating high-quality, open and serious discussions about Bitcoin.

Your best source for ideas, discussions, and debate regarding technical, economic, business and political developments about the world's first and best cryptocurrency - Bitcoin.

Welcome!

A place for cultivating high-quality, open and serious discussions about Bitcoin.

Your best source for ideas, discussions, and debate regarding technical, economic, business and political developments about the world's first and best cryptocurrency - Bitcoin.

If it's your first time here, please take a quick look through our rules and guidelines, and then dive in. Anyone is also free to view our Public Moderation Log.

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0

Lightning Network

Is this generally correct?

Background: Bitcoin transactions are verified pretty fast, typically around 10 minutes, but at worst take a few hours. The Lightning Network speeds up Bitcoin transactions.

On-chain vs Off-chain, what’s the difference?

On-chain: Transactions that happen on the original Bitcoin Blockchain. Slower, more expensive, more secure, and has transparency.

Off-chain: Transactions that happen on the side of the blockchain. Typically faster, cheaper, not as secure, and has less transparency.

*Off-chain transactions typically use technologies called L2’s or layer 2’s. This just means you have your original Network, like the Bitcoin blockchain that nearly everyone uses. This is a Laye 1 or L1. Then these technologies are built on top of these L1 networks and work with the original blockchain but do most of their transactions on the side on this L2.

The “lightning network” is a technology built on top of Bitcoin. Some smart group created this “thing” or software that basically was built on top of how Bitcoin works. Instead of taking 10 minutes and costing a couple of dollars, it sends in seconds and costs pennies.

How? In short, instead of using the Bitcoin Network for every transaction, you’re kinda transacting on the side, or “off-chain” then eventually going back to the original Bitcoin network.

Now, what’s the catch? It’s technically not as secure as the original Bitcoin network, and it could be difficult to set up.

Heres a very technical explanation of it if you want to dig deeper.

So, The Lightning Network is software built on Bitcoin that is faster and cheaper but less secure, that eventually goes back to the original Bitcoin network.

1 Comment
2024/05/09
19:38 UTC

9

A Lonely Old Bitcoin Miner Bids Farewell...

I discovered Bitcoin in the fall of 2010, when a friend who paid his rent playing online poker, knowing I was something of an alternative currency geek, forwarded me a forum post describing a new “crypto currency” project and concept. I spent a weekend tumbling down the rabbit hole, feeling floored by how it so elegantly solved many of the core issues of previous attempts at online money like (OG) E-gold and Liberty Dollar, and it resonated with my late-adolescent ideological influences of aughts libertarian Austrian economics blended with the more left-leaning anti-authoritarianism of crypto-anarchism. At that point there weren’t really exchanges yet, so we hatched a plan to set up a short-lived online shop that accepted Bitcoin, and I soon had some skin in the game.

The subsequent few years were heady. I co-edited a short-lived virtual business journal with other anonymous participants. I ran a mining script in the background on my laptop’s CPU while working in coffee shops, and, when that became laughably obsolete, bought a Block Erupter usb stick that I half-jokingly treated as an office space-heater. I lost chunks that felt small then (but large now) when the early progenitors of the sleek modern crypto behemoths broke their paths then face-planted, paving the way for exchanges, product marketplaces, and DeFi.

I could go on, but such reminiscing quickly starts to give off the vibe of the Blade Runner C-beams speech. The point is that I spent four or five heady years as a true believer, really in the thick of it. While there was certainly a welcome side-effect that there was money to be made, it was not the core motivation that drove me and many others in the early community.

Years later, I stumbled upon an essay titled The Lonely Old Bitcoin Miner Touches Eternity which, to this day, feels like the most accurate expression of the spirit of that moment. The idea of “infrastructural mutualism”, in which all the participants in this new monetary commons could contribute to, and benefit from, its success, stood in stark contrast to the privileged systems revealed by the 2008 financial crisis referenced in the Genesis block. When I sat in a coffee shop CPU mining in the spring of 2011, I was not just making a few cents off their electricity. I was putting my shoulder to the wheel for a future that, if not utopian, was a hell of a lot better than what we were living through in the days when the precursors to the Occupy movement were simmering toward their boiling point.

I first really felt the loss of that spirit while traveling in 2014. Previously, when I’d found other Bitcoin people, there was an instant sense of comradery of folks working on bootstrapping a shared project with intelligence and hacker zeal. When I dropped by the NYC Bitcoin Center near Wall Street, I found something different. Rather than finding a nest of nerds with a shared enthusiasm, the welcome was not hostile, but cool, and it quickly became apparent that this was a financial-first scene. I quickly made my exit after exchanging a few pleasantries, and that marked a turning point for me.

While I still held the vision and architecture in high regard, my sense of belonging to a community that I valued in the Bitcoin space quickly dissipated. I became more of a passive ride-along than an active advocate, and my hope for Bitcoin as a possible driver of real positive structural change dwindled. As the markets swung up and down over the years, I would use the bull runs to liquidate a portion of my holdings, and downturns to stock back up, motivated into a disciplined approach by the desire to make donations and impact investments into things that were more in alignment with the world I wanted to see as my brain, worldview, and politics continued to mature.

I remained in that mode for the better part of a decade, but a sense of dissonance was growing. It recently came to a head when, following the run-up to Super Tuesday primary, I decided to poke around in the prediction market space. Prediction markets were one of the ideas breathlessly discussed in the early days, and I found one running on the Polygon network that seemed quite active. This, in turn, led me down a rabbit hole on Ethereum and its developments, which I’d never followed too closely.

I ultimately ended up at the realization that the Ethereum ecosystem has actualized many of the “infrastructural mutualist” dreams that animated the early Bitcoin community. Where Proof-of-Work mining became a capital-intensive arms-race that excluded the vast majority of users from participating after a few years, Ethereum staking is accessible to anyone willing to put some financial skin-in-the-game without having to run incredibly specialized hardware.

Ethereum’s transition to proof-of-stake also deals with the somewhat dystopian energy-use reality of PoW mining in a world where energy consumption is one of the existential questions for our species. I’ve come to recognize the arguments about spare renewables capacity utilization as cope. If the only way to secure a network to your satisfaction is to burn so much energy that it pushes the world towards one of the more horrifying climate models, one should question whether such true trustlessness is desirable, or if we should look to more nuanced models of trust and power.

Finally, the Ethereum ecosystem (including layer 2s, etc.) seems to be where the actually interesting applications that were dreamed of in the early bitcointalk.com days are becoming reality. For the first time in a long time, crypto feels again to me like a place where fascinating, creative new things can be built, not just a place to make money and watch the line going up and down.

So. After a 14 year run, this lonely old Bitcoin miner has decided to bid farewell. I’ve learned a huge amount, made some good money, and would do it all again. Now, though, Bitcoin’s utility to me has reached its limits, and it’s time to explore new horizons.

So long, and thanks for all the fish!

42 Comments
2024/03/18
01:15 UTC

2

A New Bitcoin Lightning App "Workit" Launching Soon!

Hello everyone,

We've been working on a project for the last two years, and we're finally launching pretty soon! The app, called "Workit," is arguably the best Bitcoin earning platform out there. You can earn sats by walking, running, cycling, rowing, or just exercising. Also, by watching ads and shopping at partner shops. What sets our project apart are the unique "Challenges," where you can compete with thousands of users and win Bitcoin if you complete the challenge milestones.

It's possible to double your Bitcoin stack every week! Workit is also a complete Lightning Wallet, offering both custodial and non-custodial solutions. On top of this, you can get into the best shape of your life with Workit, as we offer comprehensive workout programs and nutrition plans, including options for personalized plans.

We're pretty excited about this. We've been working under the radar, so there's no buzz at all—we are bootstrapped. We would really appreciate it if you guys could give us a follow on Twitter. We'll be doing a Bitcoin giveaway quite soon to celebrate our mainnet launch!

Twitter Link: https://twitter.com/Workit_LN
App Link: https://apps.apple.com/us/app/workit-earn-bitcoin-fitness/id1570096202

Our app can also be downloaded from the App Store (but it's still on Testnet), if anyone wants to get a feel of what Workit is like.

Thanks in advance!

6 Comments
2024/02/26
13:16 UTC

7

Do I have to be a libertarian to like Bitcoin?

After listening to some podcasts at bitcoin audible, I realized that a lot of bitcoin maxis have a libertarian mindset (totally anti-government)
Is this the way to go? Is it a good idea to have no state and organize everything by the "market"? Social Darwinism? Does this kind of thinking really provide more freedom/benefits for the people? For me, it sounds like chaos and the informed early adopter will form an Elite. The rest will get rect.
I also realized that libertarian economists like Hans-Hermann Hoppe are connected to far right parties like the German AFD.
As European, a government without social securities (healthcare/education/ unemployment benefit/...) sounds like survival of the fittest.
What are your thoughts?

23 Comments
2024/02/23
12:58 UTC

5

I'm at a beach bar in El Salvador rn, here are my 'notes from the underground'.

1 Comment
2024/02/13
23:03 UTC

2

Will the ETF kill Bitcoin's scarcity?

This guy thinks that it will, and that in turn will destroy Bitcoin.

https://www.youtube.com/watch?v=EZHGBUMMrCo

22 Comments
2024/01/12
03:38 UTC

7

Initial Investigation into Miner Collusion

I understand that many people are frustrated by ordinals raising fees on the bitcoin blockchain.
I suspect that that is not the case.
Take a look at what the ordinal people have to say for themselves.
https://ordpool.space/block/00000000000000000002a92452e76276c040517078bf71e1a0a8f0071d546b3d
Most of the big nasty transactions which should have $1000 "mouth-watering" jpeg art are actually just wasted transactions.
I'm going to define wasted transaction as one of three things:
A split of a large UTXO into hundreds of smaller UTXO's that aren't for an exchange.
A joining of several small UTXO's into one or two large UTXO's.
A transaction where the fees spent is more than the bitcoin received.
Someone alerted me to https://mempool.space/mining/pool/ocean so I took a look.
Here is their known address: 37dvwZZoT3D7RXpTCpN2yKzMmNs2i2Fd1n
Note that they only have received four block rewards which is over $1 million dollars at the time of writing.
Now I'm going to be lenient on miners because they do need to spread out their rewards to their pool members so the first type of transaction is out.
This is a very bad transaction that is being sent to the miner:
aa9264b9f8d1bcb91309c626ea1b6af257b2287f2ebcc7648ffdb589b2c41e61
Note that it is the third type where more than 90% of the sent value go to fees. I thought it was a wasted transaction. However it was actually a note within an ordinal:
-------
Dear Luke Dashjr, here’s why I want to join the u/TaprootWizards:
With each halvening, Bitcoin's future will depend more and more on transaction fees. Use cases which support transaction fees (and miner revenue) are ultimately good for Bitcoin and will drive additional innovation to L2s and other types of scaling solutions. Ordinals did not create this problem, it merely highlighted it. The Taproot Wizards understand that better than most, and I believe in their mission and Bitcoin's future.
Thanks for storing our wizard JPEGs on your node forever! 🧙‍♂️
u/marshallmixing
P.S. Please stop eating cats
-------
These two transactions are actually wasted and also are related to the Ocean pool:
64f96a2597168ee377a281add7a1d1e354ae55796f4ffeaabe7583b3a4f69e4c
fa455634ad8bb647bbbab5b2837d4e65abadc2ad3f0b4ce9d73025b535e75ad6
-------
Conclusion: It would be worthwhile for a chain analyst to actually see if many of these wasted transactions are coming from mining pools. If small miners can figure out which pools are not colluding then they can join those pools that aren't wasting their precious revenue on increasing fees. They can also form new pools that do not perform wasted transactions. Small miners leaving large pools could be also good for decentralization.
Hopefully this can become a temporary phenomenon and fees can come back down.

5 Comments
2024/01/02
07:08 UTC

7

Spot Bitcoin ETF's and Proof of Reserves....

How will proof of reserves be done when the US bitcoin spot ETF's get approved? How can one trust that "paper" bitcoin is not being sold instead of the real thing?

1 Comment
2023/12/24
07:51 UTC

1

Bitcoin Newcomers FAQ - Please read!

0 Comments
2023/09/07
03:49 UTC

3

Building on top of bitcoin as a eth developer

I have experience with building on top of Ethereum and I want to learn how to build on top of bitcoin. I have searched on Google regarding it, but the only thing I get is tutorials on how to be rich with it. anyone who can provide any good resource or a roadmap to do it. (related to Bitcoin lightning network preferable)

5 Comments
2023/07/28
09:52 UTC

6

‎‎H‎o‎‎w do‎‎es B‎itc‎oin wor‎k‎? ‎‎‎

‎S‎o‎ I‎'‎m co‎m‎‎pletely n‎‎ew to the cryptocurr‎ency scene and aft‎er reading‎ onli‎ne resour‎ces for d‎ays I still can‎'t ‎wrap ‎my he‎ad around it. So I get that i‎t's d‎ecen‎tralised, so does that me‎an every singl‎e devi‎ce that use‎s bitcoin‎ has the entire set of‎ ledger‎s ev‎er created? Wouldn't that be h‎ugel‎y inef‎‎ficient and i‎mpractical? How are updat‎es roll‎ed out? If >‎50‎% of‎ bitcoi‎n users just‎ decide not to adopt a new up‎date, does it just ‎fail? And back ‎to the topic of hosting every sing‎le ledger in every d‎evice that uses bitcoin, ev‎en if the blockc‎hains are insurm‎ount‎ably sm‎all and even a million‎ blockchai‎ns would somehow be‎ as large as a small image‎ file, what about ordin‎al ‎N‎FT‎s, the b‎itcoin equ‎ivalent of the ether‎eum N‎FT‎, how are they going‎ to be host‎ed? So‎rry if‎ I see‎m‎ incred‎ibly du‎m‎‎b f‎or a‎skin‎‎g‎ th‎is, I just suck at lea‎rn‎ing n‎ew thi‎ngs I guess.‎‎

16 Comments
2023/07/11
09:25 UTC

5

How did Satoshi store his bitcoin?

We all now know that Ledger has a way of extracting our private keys from our hard wallets, im sure any hard wallet can do the same just by changing the code, how dumb have we been to trust ledger when the entire crypto market is supposed to be trustless.

I am looking for alternatives instead of ledger and I've come across trezor and they say its open source, etc, but what stops the gov or someone in power from forcing trezor to change the code and they can immediately extract our seeds and take our crypto? Yes its open source, but to change the code and extract our keys and take our crypto can all happen a lot quicker than anyone noticing a change in the source code. There has to be a better way to truly store our crypto without any trust from anyone.

How did satoshi or any of the early bitcoin miners store their bitcoin, what did they do, did satoshi give any hints on how to store our bitcoin?

8 Comments
2023/05/18
23:48 UTC

3

BitBox2 vs Blockchain Jade

Planning to go cold storage next payday. I was more or less sold on the BitBox2 until I just learnt about Blockstream Jade which comes at half the price. Why would Bitbox (or other wallet options) be preferable to Blockstream Jade?

[Hodlin since 2020, pre-intermediate level btc knowledge, looking for first hardware device to learn with, planning to sit on my hodlings for at least 5 years, planning to DCA for the next 5 years or until I'm so far in the green that I dont want to lower my average cost any further, confused that Blockstream Jade doesn't have a secure element but still seems highly regarded in terms of security]

7 Comments
2023/05/17
16:37 UTC

2

Has anyone noticed? Why is there such a low number of transactions?

At the moment I'm writing this I was checking mempool.space and for my surprise (yeah I'm kinda new to this) there just TWO blocks in the mempool, and less than 1.000 incoming transactions. Actually I'm used to see a lot of transactions. Someone know if this happens due to the upcoming increase in the difficulty in 4 hours or this is just something usual on Bitcoin?

Look this.

7 Comments
2023/04/20
05:10 UTC

3

Interacting with the bitcoin network without typical software.

Okay I don't know if I'm going to make sense when writing this because I don't know the exact question. But basically, how do you send/receive bitcoin without any of the countless wallet options there are now.

What if I wanted to sign transactions with my private key without using a wallet? Is it even possible?

7 Comments
2023/04/19
15:06 UTC

12

Should Taproot have been delayed until CISA is finalized?

Hi, this is a question that has been on my mind for a while. Cross-Input Signature Aggregation has been something that Bitcoin will likely eventually get. It'll allow you to only provide one signature for a transaction (instead of one per input), making large coinjoins (or even exchanges consolidating UTXOs) significantly cheaper.

But reading about it, it seems that it would require introducing a new output type, as it will be incompatible with the current P2TR output.

The issue I see is that first of, this would introduce a new output type (compromises privacy). Should Taproot have been perhaps delayed until CISA? That way the incentive for upgrading to Taproot would be greater too (huge fee reductions, switching from legacy->Taproot-CISA would probably have yielded 70-90% fee reduction for exchanges and other users with large amount of UTXOs), which would be a win for privacy since Taproot addresses can be multisig, or script addresses, or just a simple singlesig, so more users using it would lead to more privacy for everybody.

6 Comments
2023/01/27
07:46 UTC

1

Bitcoin Newcomers FAQ - Please read!

2 Comments
2023/01/23
12:27 UTC

10

Can Bitcoin honestly achieve world adoption?

I just finished listening to TIP's episode BTC104, and they brought up how there is speculation on the price of Bitcoin hitting $5mil or more if the globe fully adopts it as a main currency. Assuming the math adds up, I just don't understand how we will get there, specifically because of the few BTC addresses that hold crazy amounts of BTC (the whales).

If many of the governments of the world sign up for putting BTC on their balance sheets, they must realize that with world adoption, they are pumping up these whales' balances to astronomically high values. Like, in the magnitude of quadrillions of dollars in value. That seems like a strong disincentive, if not a deal-breaker, for BTC world adoption. Can anyone fill me in on what the big brains are thinking here?

45 Comments
2022/12/07
14:12 UTC

8

How validia chains compare to sidechains and validity rollups

One class of protocols that I mention in the appendices of http://bitcoinrollups.org are what I call “validia chains”. Validia chains share similarities with both sidechains and validity rollups, with interesting tradeoffs.

I wrote a blog post comparing these different protocols here: https://lightco.in/2022/11/03/validia-chains/

I'd be interested in getting feedback from folks about the possibility of adding support for validia chains to bitcoin, either as higher layers built on rollups, or even as a standalone L2 alternative to rollups.

10 Comments
2022/11/03
18:41 UTC

9

Industry Report: Validity Rollups on Bitcoin

Today I am publishing "Validity Rollups on Bitcoin", a report I wrote during my participation in the Human Rights Foundation's ZK-Rollup Research Fellowship.

Here's the preface:

Ever since Satoshi Nakamoto first publicly announced bitcoin, its supporters, critics, and skeptics alike have questioned how the protocol would scale as usage increases over time. This question is more important than ever today, as blocks are increasingly full or close to full of transactions. So-called "Layer 2" (L2) protocols such as the Lightning Network have been deployed to take some transaction volume "offchain" but even Lightning needs to use some bitcoin block space. It's clear that as bitcoin is adopted by more and more of the world's population (human and machine alike!) more block space will be needed. Another thread of inquiry concerns whether bitcoin's limited scripting capabilities help or hinder its value as electronic cash. Researchers and inventors have shown that the electronic cash transactions first made possible by bitcoin could be given new form by improving transaction privacy, supporting new types of smart contracts, and even creating entirely new blockchain-based assets.

One of the results of the decade-plus research into scaling and expanding the capabilities of blockchains such as bitcoin is the invention of the validity rollup. Given the observed benefits that validity rollups have for the blockchains that have already implemented them, attention now turns to the question of whether they would be beneficial for bitcoin and existing bitcoin L2 protocols such as Lightning, too. We explore this question by examining validity rollups from several angles, including their history, how they work on a technical level, how they could be built on bitcoin, and what the benefits, costs, and risks of building them on bitcoin might be. We conclude that validity rollups have the potential to improve the scalability, privacy, and programmability of bitcoin without sacrificing bitcoin's core values or functionality as a peer-to-peer electronic cash system. Given the "trustless" nature of validity rollups as cryptographically-secured extensions of their parent chain, and given bitcoin's status as the most secure settlement layer, one could even say these protocols are a perfect match for one another.

You can find the full report here:

https://bitcoinrollups.org

3 Comments
2022/10/11
16:38 UTC

11

ZeroSync: Utreexo + STARK proofs to do instant chain state verification and instant node spin up

This sounds super cool. Basically sounds like a way to reduce initial block download and sync to 0. Since blockchain storage, UTXO set memory usage, and IBD bandwidth are the biggest througput bottlenecks, this project could be a huge step towards being able to safely increase the block size by potentially 5X-10X.

7 Comments
2022/10/11
16:30 UTC

5

Why Proof of Work, once and for all.

9 Comments
2022/06/30
10:40 UTC

9

Can (heaviest) chain roll-back time?

If the rule is heaviest (most zeros in all of hashes) and not simply longest chain of blocks, doesn't that allow the chain to be reorged from an earlier block with "mega-difficulty" blocks; causing nodes to follow a chain with a lower total block height?

For example, imagine I had a supercomputer (just a thought experiment) more powerful than the entire BTC network and able to compute the entire chain in 1 hour. If I then started mining a 100-long chain that is heavier than the entire 742,818 blocks of BTC on top of block 2, will BTC nodes now jump over to the 103-long chain because it is heavier? Will they all start mining on a "latest block" with a timestamp of "2009-01-11 10:31" ?

22 Comments
2022/06/29
09:46 UTC

3

Do people follow the longest chain? or does the longest chain follow the people?

If everyone decides to follow a minority chain, it will eventually become the longest (most CPU), so what is the point? Aren't we just following ourselves? What's so special then about Proof of Work then? Can't we just follow ourselves without wasting energy?

35 Comments
2022/06/25
17:09 UTC

5

Bitcoin is far from ideal, prove me wrong - II - Quantum Computing will cause a liquidity tsunami soon or later.

Bitcoin uses elliptic curve encryption to produce public keys.

Due to this, addresses for which the public key is known will be very easily cracked using quantum computing anywhere in the next 5 - 50 years.

Solutions to this problem are partial and/or would anyways have a devastating impact on Bitcoin liquidity, price, and potentially to its supremacy as cryptocurrency of choice.

This is true because even if a new encryption mechanism such as XMSS was introduced, and all users moved their funds newly generated quantum resistant addresses, an enormous amount of coins would be left behind, waiting to be unlocked by a quantum attacker.

Even if a hard fork took place to arbitrarily ban addresses that were not migrated on time, this would seriously interfere with the perception of Bitcoin being an immutable store of value.

18 Comments
2022/06/15
22:36 UTC

7

Bitcoin is far from ideal, prove me wrong - I - 1 Bitcoin != 1 Bitcoin it's not fungible.

Transactions are transparently stored on the blockchain.

Since transaction history can be exactly reconstructed, coins coming from tainted transactions remain tainted forever. Transactions can be marked as illicit by any powerful enough external entity (individuals, companies, governments).

Since the concept of "illicit" varies from society to society, not always matching with your idea of good and bad, this characteristic allows external interference to alter the value of specific units of account with respect to other ones.

As an example, Hitler would have been glad to identify "tainted" bitcoins coming from Jews or political enemies, excluding them from commercial activity by law, and punishing anyone who transacted with them.

While some degree of privacy can be optionally obtained using mixers, coinjoin, and other methods, this is far very from ideal. Partial obscurity is never enough (how much partial? how much of the surrounding information would be enough to raise the curtain of uncertainty?)

Ironically, coinjoined transactions can mix untainted coins with tainted ones, so that a user may input a good coin and receive a bad one, and vice versa. Since coinjoin transactions can be identified observing the blockchain, third parties may also refuse to accept sats coming from mixers tout court, just to be safe with regulations (good regulations or hitlerian regulations, doesn't matter).

Hence, 1 btc does not equal 1 btc.

Wether or not this is a good thing remains out of the scope. What I want to say is bitcoin is very weakly fungible. Definitely less fungible than Monero, but also less than gold!

8 Comments
2022/06/15
22:14 UTC

4

The Benfits of Wallet Vaults

With the drama over CTV, I have seen several people talk about covenants as if they're a frivolous experimental feature that probably very few people need. I very much disagree, and to expand on that I want to focus on the use case I believe is most important for covenants: wallet vaults.

Today's best-in-class self-custody mechanism is always some kind of multisig wallet setup. Companies like Casa and Unchained Capital have their own systems to help people self-custody with multisig, and I have my own ideas. But multisig wallets are significantly more difficult to set up and manage than a single-key wallet. Transactions require signing with multiple devices, which may be separated by significant distance. Additional considerations are needed, like storing and backing up the wallet configuration in addition to the multiple seeds necessary. 

So what are the benefits of wallet vaults over multisig wallets? A wallet vault can approach the ease of use of a hot wallet, while at the same time having better properties than a normal multisig wallet in many important ways.

Better security:

  • For example, a 3-seed wallet vault will be as secure as a 3-of-5 multisig wallet requiring 5 seeds.
  • Only 1 seed is needed for normal wallet vault unvaultings, meaning your other keys become exposed far less often.
  • You can more easily add additional seeds to your wallet vault than with multisig because doing so doesn't make it harder to spend your money.

Better redundancy:

  • With a wallet vault, you only lose funds if you lose all your seeds, whereas with normal multisig you generally lose funds if you lose half your seeds (eg losing 3 keys will result in loss of funds for a 3-of-5 multisig wallet).
  • A wallet vault can have basically unlimited amount of redundancy without loss of security by adding numerous 3rd party signers as backup signers that are always overridable by your personal keys. Such a thing could make someone's bitcoin basically unlosable. 

Better usability:

  • Because you don't need as many seeds (for the same level of security), you don't need as many secure storage locations so creating and maintaining the wallet is easier.
  • You only need to use 1 seed to spend, so you don't have to potentially travel around to multiple places and sign with multiple devices. 

The sole downside of a wallet vault over normal multisig is that you need something watching the blockchain for transactions from your vault, so that you have time to create a recovery transaction and sign it with your other seeds / signing devices. This is somewhat similar to the concept of a lightning watchtower, except that if a thief tries to steal your funds, you generally have to manually create and sign a recovery transaction. However, this doesn't place much additional burden on the end user.

So bitcoin in a wallet vault can easily be both harder to lose and harder to steal, while at the same time being easier to use. Wallet vaults are not just a frivolous experimental toy, but are well understood to be an enormous advancement in self-custody. They could help more people self-custody, help people keep a larger fraction of their bitcoin in cold wallets, and generally make holding and using bitcoin substantially safer and easier. 

And this is only one of the important improvements covenants enable. So please, if you think that covenants aren't important, please read more about wallet vaults. 

OP_CHECKTEMPLATEVERIFY enables wallet vaults, and as simple as OP_CTV is, it has numerous important use cases like wallet vaults. While there are other ideas floating around that enable covenants, none have been actually developed other than CTV.

8 Comments
2022/05/09
19:00 UTC

11

Proposal for regular release schedule of only every 4 years for changes to consensus code (soft and hard forks)

This is a proposal to the bitcoin community/developers/miners/users outlining arguments that new releases of bitcoin implementations with changes to the consensus rules (soft and/or potential hard fork) should follow a regular release cycle that is no shorter than 4 years, with the next change no sooner than 2024. A convention for a software release schedule for non-consensus rules already exists (every 6-7 months), however, no schedule or a loose de facto agreement exists for changes to consensus rules exists, and I believe there are several improvements this makes and several problems it prevents by making changes to consensus rules only at a regular intervals.

In an ideal world, the consensus rules of bitcoin are immutable. The immutability of the code and especially the consensus rules is a core principle of bitcoins value proposition. However, as research advances and user demand evolves, some changes are inevitable and make genuine improvements to the protocol. Nevertheless, by making changes to consensus rules only at predictable intervals it improves the immutability principle and reduces the appearance that soft fork proposals can just be demanded to be reviewed or implemented at any time.

With the appearance that soft fork proposals can just be demanded to be reviewed or implemented at any time, it has increasingly become evident that this is an attack surface for bitcoin, even if the proposed changes are claimed to be minimal and harmless. Empirically, in the past, what seemed to be an urgent soft or hard fork proposals at the time and caused a great deal of damaging consternation, were in hindsight often non-urgent changes that could have easily waited longer or didn't need to be made at all. The consternation soft fork proposals cause and the potential room for soft fork proposers to seemingly bamboozle the community into a soft or hard fork, can be severely reduced or avoided by achieving a de facto agreement on a regular review and release schedule for changes to the consensus rules at regular 4 year time intervals. A regular release schedule can be thought of a fail-safe mechanism, to not bamboozle the community into unnecessary soft forks.

Furthermore, the irregularity and frequency with which soft forks are proposed are causing the community/developers/miners/users to be pressured to needing to spend time and review ad hoc a myriad of soft fork proposals, which is disruptive. On the other hand, proposers of soft forks are frustrated with the lack of review. The frustrations on both sides of the issue of this irregular, ad hoc process for soft fork proposals are understandable.

By working on soft fork proposals where there is a de facto agreement about a time line the community will evaluate, compare, contrast and prioritise various soft fork proposals, this agreement aims to give the proposer of a soft fork and the community more clarity on when to determine whether there is consensus to go ahead with a soft fork proposal (or not) at the end of every four year cycle. The focused attention could also result in selection and formulation of fundamentally better proposals, than in a process where the evaluation is at irregular and unpredictable time intervals. There are a handful of soft fork proposals out there now, and I believe it is very unclear to many in the community how these proposals compare, contrast and can be prioritised.

Four years is somewhat of an arbitrary length, however with bitcoin now 13 years old, empirically, there is scant evidence for the argument that bitcoin consensus proposals needs to have a quicker turnover than four years for implementing soft fork proposals to respond 'critical' hypotheticals that have kept creating false senses of urgency . On the contrary, historical evidence suggests that conservative and careful consideration to compare, contrast and prioritisation of proposals, bolsters bitcoins value proposition. I am inclined to to think that rough consensus already exists on this or is close to it, yet there is still a contingency of people that is not aware of this or see it fundamentally different and find themselves frustrated with the 'slow' development. Knowing that this rough consensus already exists, people that fundamentally believe and advocate for fast development of consensus rules in bitcoin, should consider that bitcoin is not the right project for them.

While developers can understand proposals fairly quickly and 'technical consensus' can be achieved relatively quick, 4 years is good time for users and miners to understand proposals as well and to establish if rough consensus has precipitated (or not) amongst users. In reality, the evaluation of proposals is a feedback system between developers and miners/users. Miners/users generally will follow the technical consensus, and a four year time frame gives time to raise concerns and feed it back to the developers, and this time frame respects the principle that ultimately the users have final control. When the time frame is shorter, users are too easily be left out of the process and it will appear that control is gravitated to developers (and miners). It is reminded that for the technically uncontroversial Taproot proposal, at the time of activation, only have 50-60% nodes had upgraded. This demonstrates that ample time is needed for users to activate (or resist).

In summary, the benefits of a regular 4 year release schedule for changes to the consensus code are:

  1. Improvement of immutability principle.
  2. Mitigating the disruptive demands on community to review proposals at just any time.
  3. Selection and formulation of fundamentally better proposals due to focused attention of community, rather than irregular disrupted attention.
  4. With bitcoin in existence for 13 years, empirically, 4 years is the minimum time to feed back a proposal between developer and miners/users and for users to raise concerns, respecting that users ultimately control bitcoin and mitigates the appearance that developers and miners can hijack control of bitcoin.

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I would like to know thoughts on this proposal. I may have overlooked some other pro and cons that I should have considered. If this is of value, I may post it to the bitcoin dev mailing list.

19 Comments
2022/05/02
22:44 UTC

16

Why the Lightning Network is the most important thing in Bitcoin right now.

13 Comments
2022/01/30
15:26 UTC

7

Anyone familiar with bitcoin ATMs? "Just Digital Coin"

I used one for the first time last night. Which will also be my LAST time, considering how much it over charges...I couldn't get a solid connection on my phone in order to deposit directly into an existing wallet, and had to create a new wallet via the ATM.

I can NOT figure out a way to access the BTC I bought?! I feel like it should be obvious. But I haven't been able to find a way to get it into my other wallet(s)?

Any help is greatly appreciated 🙏

29 Comments
2022/01/29
16:07 UTC

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