Taproot, Bitcoin’s long-anticipated upgrade, has activated(coindesk.com)
coindesk.com
Taproot, Bitcoin’s long-anticipated upgrade, has activated
https://www.coindesk.com/tech/2021/11/13/taproot-bitcoins-long-anticipated-upgrade-activates-this-weekend/
235 コメント
Can anyone explain why my genuine question below -- "When will BTC move to an energy efficient protocol?" -- was flagged? Seems a bit gratuitous?
I don't know why you were flagged, but if your question was in earnest:
Bitcoin almost certainly won't move. Because those touted energy efficient protocols come at the cost of much weaker security guarantees which undermine a key point of Bitcoin.
Proof of stake, the forerunner of energy efficient protocols, may work better for networks that have different aims, although smart contract oriented blockchains still need good security to be trusted.
The stupendous levels of complexity involved in trying to hammer out proof of stake into a viable method of energy efficient mining make the approach look ever more unpromising.
Ethereum keeps delaying the switch and the touted 2022 migration has once again been kicked into the long grass after this paper from a few weeks ago: https://arxiv.org/abs/2110.10086
Lead to: https://nvd.nist.gov/vuln/detail/CVE-2021-42764 https://nvd.nist.gov/vuln/detail/CVE-2021-42765 https://nvd.nist.gov/vuln/detail/CVE-2021-42766
Bitcoin almost certainly won't move. Because those touted energy efficient protocols come at the cost of much weaker security guarantees which undermine a key point of Bitcoin.
Proof of stake, the forerunner of energy efficient protocols, may work better for networks that have different aims, although smart contract oriented blockchains still need good security to be trusted.
The stupendous levels of complexity involved in trying to hammer out proof of stake into a viable method of energy efficient mining make the approach look ever more unpromising.
Ethereum keeps delaying the switch and the touted 2022 migration has once again been kicked into the long grass after this paper from a few weeks ago: https://arxiv.org/abs/2110.10086
Lead to: https://nvd.nist.gov/vuln/detail/CVE-2021-42764 https://nvd.nist.gov/vuln/detail/CVE-2021-42765 https://nvd.nist.gov/vuln/detail/CVE-2021-42766
Here's one of Ethereum's lead researchers talking about the attacks in that paper. The fixes are simple and not expected to delay the merge.
https://blog.ethereum.org/2021/11/02/finalized-no-31/
https://blog.ethereum.org/2021/11/02/finalized-no-31/
Written for public consumption that post conveys a great deal of certainty while eliding over doubts:
"Change fork choice rule to mitigate balancing and reorging attacks"
https://ethresear.ch/t/change-fork-choice-rule-to-mitigate-b...
And more fundamentally at the heart of the matter
https://ethresear.ch/t/comment-on-three-attacks-on-proof-of-...
> Moreover, there is a general argument that the attacker will always be able to keep the consensus from finalizing nomatter what the fix is.
> The argument simply comes from the fact, that mathematically provable binary consensus algorithms known in this universe have n2 behavior, and ETH2 is linear in n .
> Therefore, the only way to really fix ETH2 is to make it n2 . Otherwise it is unfixable from the math point of view. There will always be another attack.
> It may be that by continuing patching a fix after a fix after a fix one can end up with something that will work from an engineering point of view.
> This will be security by obscurity.
> But it will not be secure from the math point of view.
So while bodging in patches might work one day, it's an immature approach and a scary place to try store value.
The sheer number of moving parts create a scary amount of emergent complexity and complexity is the enemy of security.
Disclosure: I'm an early but now uncomfortable ETH holder.
"Change fork choice rule to mitigate balancing and reorging attacks"
https://ethresear.ch/t/change-fork-choice-rule-to-mitigate-b...
And more fundamentally at the heart of the matter
https://ethresear.ch/t/comment-on-three-attacks-on-proof-of-...
> Moreover, there is a general argument that the attacker will always be able to keep the consensus from finalizing nomatter what the fix is.
> The argument simply comes from the fact, that mathematically provable binary consensus algorithms known in this universe have n2 behavior, and ETH2 is linear in n .
> Therefore, the only way to really fix ETH2 is to make it n2 . Otherwise it is unfixable from the math point of view. There will always be another attack.
> It may be that by continuing patching a fix after a fix after a fix one can end up with something that will work from an engineering point of view.
> This will be security by obscurity.
> But it will not be secure from the math point of view.
So while bodging in patches might work one day, it's an immature approach and a scary place to try store value.
The sheer number of moving parts create a scary amount of emergent complexity and complexity is the enemy of security.
Disclosure: I'm an early but now uncomfortable ETH holder.
On the "fundamental" link, see this reply that appeared after you commented:
"The reason that Ethereum’s consensus can run in n time rather than n^2 is BLS signature aggregation. The attacks in the paper however aren’t attacks on signature aggregation. So I don’t think your argument is valid."
"The reason that Ethereum’s consensus can run in n time rather than n^2 is BLS signature aggregation. The attacks in the paper however aren’t attacks on signature aggregation. So I don’t think your argument is valid."
> mathematically provable binary consensus algorithms known in this universe have n^2 behavior
Is there a convenient way for an uneducated schmuck like me to read up on this? Just a comment without references isn't much to go on.
Is there a convenient way for an uneducated schmuck like me to read up on this? Just a comment without references isn't much to go on.
It really was in earnest! I don't keep up with crypto news so just assumed this was something being worked on somehow.
Your answer would have fitted well with the thread that responded to my question!
As difficult as the vulnerabilities of PoS are to solve, at least there's nothing yet to say that they can't be solved given enough work; wheras, from what everyone is saying, the energy problem is essential to PoW as such?
Your answer would have fitted well with the thread that responded to my question!
As difficult as the vulnerabilities of PoS are to solve, at least there's nothing yet to say that they can't be solved given enough work; wheras, from what everyone is saying, the energy problem is essential to PoW as such?
With PoW all that burned energy creates a strong root of trust.
How do you establish that root of trust with PoS? Currently approaches are ultimately circular, IE trust it because the majority holders of the coin are continually voting to trust it.
How do you establish that root of trust with PoS? Currently approaches are ultimately circular, IE trust it because the majority holders of the coin are continually voting to trust it.
You need a good initial distribution.
With Bitcoin mining pools it looks like there's just as much centralization (if not more) as with proof of stake.
With Bitcoin mining pools it looks like there's just as much centralization (if not more) as with proof of stake.
The difference being you don’t need to ask existing Bitcoin miners for permission to begin mining Bitcoin yourself. Conversely, staking is inherently impossible without first obtaining “stake” — and how can you obtain stake without the approval of existing stakers?
You don't need permission, but you do need money to buy mining hardware. Might as well buy a stake for that money instead. Same thing, isn't it?
> Same thing, isn't it?
US dollar payments aren’t subject to the approval of stakers, and existing PoW miners have no on-chain mechanism to prevent new market entrants from competing against them for hashrate.
So, “no”.
To begin staking, you first need stake. But merely transfering a PoS coin from an exchange to your own wallet for subsequent staking is inherently impossible without the approval of existing stakers. Even this isn’t enough: existing stakers must also approve of your initial staking transactions.
Which is not how PoW mining works.
US dollar payments aren’t subject to the approval of stakers, and existing PoW miners have no on-chain mechanism to prevent new market entrants from competing against them for hashrate.
So, “no”.
To begin staking, you first need stake. But merely transfering a PoS coin from an exchange to your own wallet for subsequent staking is inherently impossible without the approval of existing stakers. Even this isn’t enough: existing stakers must also approve of your initial staking transactions.
Which is not how PoW mining works.
PoS is something fundamentally different from PoW. PoS-like ideas were around since before PoW, but such a system can never be used in a trustless way, which was what PoW enabled.
So it's fair to say that Bitcoin could never "transition" to PoS since the whole premise from the start was that it wasn't! It could not exist before. Now that it exist, and has been shown to work, it has caused a cambrian explosion of sorts of protocols with less reliance on trustlessness. But they solve a different problem.
So it's fair to say that Bitcoin could never "transition" to PoS since the whole premise from the start was that it wasn't! It could not exist before. Now that it exist, and has been shown to work, it has caused a cambrian explosion of sorts of protocols with less reliance on trustlessness. But they solve a different problem.
> Because those touted energy efficient protocols come at the cost of much weaker security guarantees which undermine a key point of Bitcoin
That's FUD. Protocols like Bitcoin can fork, whereas others don't. Thus, Bitcoin, and proof-of-work, are less secure protocols.
That's FUD. Protocols like Bitcoin can fork, whereas others don't. Thus, Bitcoin, and proof-of-work, are less secure protocols.
You can fork endlessly and each fork won't matter one whit because they don't follow the longest chain secured with the most hashing power.
Or your fork can follow the longest chain and abide by the rules so your transactions are accepted by the rest of the network, in which case you're using Bitcoin and haven't forked.
Or your fork can follow the longest chain and abide by the rules so your transactions are accepted by the rest of the network, in which case you're using Bitcoin and haven't forked.
The problem is that you never know if you’re on a fork, or if there’s going to be a reorg.
So you then follow that chain and try transact on it. If your counterparty is satisfied then cool, carry on separately in your own bubble.
As you continue to transact with the rest of the world you'll realize you were both on a fork as you eventually encounter a chain with a much greater block height and you figure out that's where the current consensus lies.
You will still have your your UTXOs on the main chain since the transaction won't exist there. You and your counterparty figure out which chain is subjectively valuable to you.
In reality you ascertain the provenance of the software you're using the same way as all other software. If you fall for a supply chain attack and use the wrong software then all bets are off, you're vulnerable to your attacker and anything can happen.
You don't know if there's going to be a reorg in as much as relying on quantum mechanics you don't know you're not going to fall through the floor. Nothing is certain, only somewhere on the scale of probable to improbable. Look at the available current hashpower and decide where the incentives lie.
Anyway this is getting into the epistemological weeds. How do you know the universe/simulation you think you're in wasn't created last Thursday? https://rationalwiki.org/wiki/Last_Thursdayism
As you continue to transact with the rest of the world you'll realize you were both on a fork as you eventually encounter a chain with a much greater block height and you figure out that's where the current consensus lies.
You will still have your your UTXOs on the main chain since the transaction won't exist there. You and your counterparty figure out which chain is subjectively valuable to you.
In reality you ascertain the provenance of the software you're using the same way as all other software. If you fall for a supply chain attack and use the wrong software then all bets are off, you're vulnerable to your attacker and anything can happen.
You don't know if there's going to be a reorg in as much as relying on quantum mechanics you don't know you're not going to fall through the floor. Nothing is certain, only somewhere on the scale of probable to improbable. Look at the available current hashpower and decide where the incentives lie.
Anyway this is getting into the epistemological weeds. How do you know the universe/simulation you think you're in wasn't created last Thursday? https://rationalwiki.org/wiki/Last_Thursdayism
It seems like you don’t know about double spending attacks and how many times 51% attacks actually happened.
[deleted]
That's a classic flamewar topic, so if your comment didn't have anything new and interesting to say, users will tend to flag it as flamebait. (I haven't seen the comment.)
I didn't flag, but if that's what you wrote, it's off-topic.
It's also tedious. We get it. It uses energy by design. You can count on any HN Bitcoin discussion to bring out the environmentalist in almost anyone.
It's also tedious. We get it. It uses energy by design. You can count on any HN Bitcoin discussion to bring out the environmentalist in almost anyone.
It's not that much off-topic given that this discussion is about Bitcoin protocol upgrade and switch to PoS is a potential protocol upgrade as well.
It's not off-topic at all. But I can see how it's tedious.
Because it’s a loaded question and an attempt to start a flamewar. The genuine answer to the question is ‘never’.
You're assuming the motive of the commenter, who followed up and clarified that it was asked in earnest. It's a reasonable question for someone who doesn't follow crypto closely to ask
I don't know but I came here with the same question in mind. Like, "Oh maybe they upgraded to suck less coal out of the ground?" Nah, other reasons entirely it seems.
It's highly unlikely that Bitcoin will move towards a proof of stake protocol without strong incentives (like regulations). The whole point of the proof of stake was to make the protocol censorship resistant.
> Overcoming censorship is not possible in a PoS system, as the censor has acquired majority stake and cannot be unseated. As such PoS systems are not censorship-resistant and the theory is therefore invalid.
https://github.com/libbitcoin/libbitcoin-system/wiki/Proof-o...
https://github.com/libbitcoin/libbitcoin-system/wiki/Proof-o...
I meant proof of work :)
Although in theory you still need to find who owns these accounts in a proof of stake system. So it’s not as bad as what people think.
Although in theory you still need to find who owns these accounts in a proof of stake system. So it’s not as bad as what people think.
Because it is offensive. Bitcoin is, always will be, a proof of work cryptocurrency. If you do not understand why, take time to learn why.
nanna(6)
A snarky tweet from Bram Cohen of Chia (which has had taproot and graftroot enabled since launch in March):
> Congratulations to Bitcoin for joining the club of UTXO-based cryptocurrencies which have taproot enabled.
https://twitter.com/bramcohen/status/1459755439294275584
> Congratulations to Bitcoin for joining the club of UTXO-based cryptocurrencies which have taproot enabled.
https://twitter.com/bramcohen/status/1459755439294275584
Seems petty. Of course it’s easier to make changes when you just launched and there are less parties and more centralization at a leadership level. 8 months doesn’t really seem like something worthy to brag over.
Well, Bitcoin still doesn't have graftroot so it's 8 months and counting :)
And Lord help me I'm talking about crypto on hacker news but Chia seems just better engineered overall:
And Lord help me I'm talking about crypto on hacker news but Chia seems just better engineered overall:
- uses between 300x and 10000x less energy for the same security as Bitcoin
- has the most number of farmers/validators of any blockchain
- supports around ~25 transactions per second (as opposed to bitcoin's 5)
- very efficient and auditable on-chain language (much better than Solidity afaict)
> - uses between 300x and 10000x less energy for the same security as Bitcoin
right, but instead of mostly electricity being poured into mining, now it's hard drive components. It's still the same amount of dollars (resources) poured into mining. The only difference is shifting it from opex to capex.
>- has the most number of farmers/validators of any blockchain
valid point, although I wouldn't really chalk it up to it being "better engineered". bitcoin supports validation at the miner level (ie. you can do the validation, rather than trusting/relying on the pool) as well via getblocktemplate. It's just not widely adopted for whatever reason.
right, but instead of mostly electricity being poured into mining, now it's hard drive components. It's still the same amount of dollars (resources) poured into mining. The only difference is shifting it from opex to capex.
>- has the most number of farmers/validators of any blockchain
valid point, although I wouldn't really chalk it up to it being "better engineered". bitcoin supports validation at the miner level (ie. you can do the validation, rather than trusting/relying on the pool) as well via getblocktemplate. It's just not widely adopted for whatever reason.
The biggest problem with chia is still that Bram owns almost all of the tokens.
I see no reason to donate to his personal charity.
I see no reason to donate to his personal charity.
Incorrect. Please see https://twitter.com/0xfreddieC/status/1457289838470782978
Disclaimer; I run a Chia blockchain explorer
Disclaimer; I run a Chia blockchain explorer
Why comment "incorrect" on a factually true statement?
It's fine that you believe the dev is a nice person and will never dump on you, but they absolutely do hold a vast majority of issued chia.
It's fine that you believe the dev is a nice person and will never dump on you, but they absolutely do hold a vast majority of issued chia.
You said Bram owns almost all the coins. That is not true.
https://www.chia.net/whitepaper/
Pages 18-21
You could say that he is on the board that manages the pre-farm but that is not the same thing.
https://www.chia.net/whitepaper/
Pages 18-21
You could say that he is on the board that manages the pre-farm but that is not the same thing.
In the same paper they detail plans to sell shares of Chia network inc (of which Bram is CEO/chairman/owner) to retail investors through an IPO.
Selling coins or selling a company that holds coins. Whatever, it's all dumping.
Selling coins or selling a company that holds coins. Whatever, it's all dumping.
> ~25 TPS
Still a couple orders of magnitude away from being a significant difference.
Still a couple orders of magnitude away from being a significant difference.
It's easy to build something better engineered when you don't have an installed base. Getting adoption is the hard part. Chia is doing pretty well for a new chain but we'll see what happens long term.
Centralised scams live off comparing themselves to a decentralised currency like bitcoin
real money testnets have often been useful to help Bitcoin reach consensus on constitutional amendments
A crazy thing with Taproot is:
A company could create a virtual bank to handle all transfers with its suppliers by doing a single onchain transaction.
From the outside, it would look like a normal "Someone sent some coins from address A to address B" transaction.
But internally, a key needed to spend the funds is only valid if the company and all of its suppliers sign it.
This means every time there is a transaction between the company and one of its suppliers, the company would send out a signed message with the new spending conditions (the new balance of the company and every supplier) to the supplier network. Everyone signs it and that's it. It does not go on chain.
Only if a participant becomes uncooperative, the latest state will go on chain and everyone will get what they own.
So in the future, two transactions on the Bitcoin chain a few years apart could be "Someone sent something somewhere in December 2021 and then they send something somewhere in June 2025". Or it could be "BMW did ten thousand transactions with its suppliers". You don't know. Both look the same on chain. And all of the transactions were free, instant and possible 24/7.
A company could create a virtual bank to handle all transfers with its suppliers by doing a single onchain transaction.
From the outside, it would look like a normal "Someone sent some coins from address A to address B" transaction.
But internally, a key needed to spend the funds is only valid if the company and all of its suppliers sign it.
This means every time there is a transaction between the company and one of its suppliers, the company would send out a signed message with the new spending conditions (the new balance of the company and every supplier) to the supplier network. Everyone signs it and that's it. It does not go on chain.
Only if a participant becomes uncooperative, the latest state will go on chain and everyone will get what they own.
So in the future, two transactions on the Bitcoin chain a few years apart could be "Someone sent something somewhere in December 2021 and then they send something somewhere in June 2025". Or it could be "BMW did ten thousand transactions with its suppliers". You don't know. Both look the same on chain. And all of the transactions were free, instant and possible 24/7.
So basically, does that mean KYC/AML are officially dead in BTC's environment? The picture was not bright before, but with this kind of innovations, it seems impossible for this network to build banking systems that respect regulations.
Good riddance. I don't think KYC/AML are a force for good. Its just more box ticking laws that serve to give a false sense of security while poor people are being excluded from the banking system and normal people have their all their data stolen from centralized databases.
Real dangerous criminals don't give a damn about KYC/AML laws and operate freely within the banking framework. The European Central Bank chairwoman is a felon convicted for massive government payouts.
Real dangerous criminals don't give a damn about KYC/AML laws and operate freely within the banking framework. The European Central Bank chairwoman is a felon convicted for massive government payouts.
> The European Central Bank chairwoman is a felon convicted for massive government payouts.
Why do people feel the need to deliberately mislead by leaving out all the important details? I had no idea what you were talking about, so I looked it up, it's the second item under https://en.m.wikipedia.org/wiki/Christine_Lagarde#Controvers....
Regardless of your opinions on that particular court case, or the fact that the letter of your statement may be true, do you honestly think "The European Central Bank chairwoman is a felon convicted for massive government payouts" would give the average reader an accurate view of what happen? Because after reading what actually happened, and which IMO comes nowhere near to the deliberate malfeasance you imply, I just conclude that, to put it colloquially, "You're full of shit."
Why do people feel the need to deliberately mislead by leaving out all the important details? I had no idea what you were talking about, so I looked it up, it's the second item under https://en.m.wikipedia.org/wiki/Christine_Lagarde#Controvers....
Regardless of your opinions on that particular court case, or the fact that the letter of your statement may be true, do you honestly think "The European Central Bank chairwoman is a felon convicted for massive government payouts" would give the average reader an accurate view of what happen? Because after reading what actually happened, and which IMO comes nowhere near to the deliberate malfeasance you imply, I just conclude that, to put it colloquially, "You're full of shit."
>do you honestly think "The European Central Bank chairwoman is a felon convicted for massive government payouts" would give the average reader an accurate view of what happen?
absolutely. Your wikipedia link is absolutely clear :
"the court found Lagarde guilty of negligence"
So, she is a convicted felon for conveniently looking the other way. Some of course may question whether the 400M euro is "massive" these days...
absolutely. Your wikipedia link is absolutely clear :
"the court found Lagarde guilty of negligence"
So, she is a convicted felon for conveniently looking the other way. Some of course may question whether the 400M euro is "massive" these days...
I am also very curious about what exactly is the discrepency here? Which specific part of the original statement is incorrect?
P.s. "My currency is signed by my own private key, yours - by a convicted felon". Whom would you trust more?
P.S. Also, how come you can use such language ("You're full of shit.") and not be banned? Could a moderator take a stance on this one? I don't see the flag button for some reason.
P.s. "My currency is signed by my own private key, yours - by a convicted felon". Whom would you trust more?
P.S. Also, how come you can use such language ("You're full of shit.") and not be banned? Could a moderator take a stance on this one? I don't see the flag button for some reason.
You should look up the past of the germanys next chancellor
> Good riddance. I don't think KYC/AML are a force for good
If KYC/AML is not possible in the bitcoin world, you're not going to be getting a world with bitcoin that doesn't have KYC/AML.
You're going to get a world with no bitcoin.
If KYC/AML is not possible in the bitcoin world, you're not going to be getting a world with bitcoin that doesn't have KYC/AML.
You're going to get a world with no bitcoin.
Finance without KYC/AML is like air travel without TSA. Everyone remembers those times fondly, but have lost the imagination to believe they are possible again.
> Finance without KYC/AML is like air travel without TSA.
The real analogy here is that the ultra rich needn’t deal with the TSA because they fly private.
The real analogy here is that the ultra rich needn’t deal with the TSA because they fly private.
And even more forget why we put those systems into place to begin with.
Just because the response is a bad one doesn't mean that the problem doesn't exist.
FWIW, even if TSA is bad at stopping terrorists, I AM glad that all of these people punching flight attendants are, with certainty c. 1, not packing heat.
Just because the response is a bad one doesn't mean that the problem doesn't exist.
FWIW, even if TSA is bad at stopping terrorists, I AM glad that all of these people punching flight attendants are, with certainty c. 1, not packing heat.
> FWIW, even if TSA is bad at stopping terrorists, I AM glad that all of these people punching flight attendants are
Seriously, how often does this happen? I've flown a fair amount in my life (in Europe though) and I've never seen any commotion on a plane. I've read about some incidents, but I've read about a lot of fucked up stuff that I'm not concerned about in my life.
It's along the lines with everything these days. Someone does something bad and someone else gets shocked and then everyone wants to stop something like that from happening ever again, through whatever means, without realizing the incredible inconvenience (and complexity) this causes over time when repeated ad infinitum.
Seriously, how often does this happen? I've flown a fair amount in my life (in Europe though) and I've never seen any commotion on a plane. I've read about some incidents, but I've read about a lot of fucked up stuff that I'm not concerned about in my life.
It's along the lines with everything these days. Someone does something bad and someone else gets shocked and then everyone wants to stop something like that from happening ever again, through whatever means, without realizing the incredible inconvenience (and complexity) this causes over time when repeated ad infinitum.
https://www.cnn.com/travel/article/unruly-passengers-faa/ind...
If only 1% of those people were armed, that would still be very very scary!
If only 1% of those people were armed, that would still be very very scary!
Is the thought that things like Monero, ZCash, etc., will be eliminated, or that they don't provide the anonymity that people think? What about the CCs that choose to implement Mimblewimble?
Good or bad, "no KYC/AML" is not an option. If governments decide Bitcoin can’t provide KYC/AML, Bitcoin will be nuked from orbit.
KYC is up to the exchange to implement. There's nothing stopping them from keeping additional records that aren't on the Bitcoin blockchain in order to stay compliant.
Of course there's also nothing stopping you from sending your coins somewhere with reduced reporting and spending them from there, but then there never really was in the first place.
Of course there's also nothing stopping you from sending your coins somewhere with reduced reporting and spending them from there, but then there never really was in the first place.
It may be dead if you run bitcoind or your own wallet, but the majority of users would avoid the complexity of running your own wallet and instead use an exchange to obtain Bitcoin. Opening an account at an exchange would enforce KYC/AML rules anyways, as the operators have to compliant of local laws (which are usually based on guidelines by FATF, a global financial regulation group).
BTC is not built to support KYC/AML.
Then it's going to be weaponized to launder money and be made illegal eventually.
>and be made illegal eventually
Allocation of resources to try and ban cryptocurrency (or encryption in general) is probably one of the dumbest things ever conceived, probably even more so than the drug war.
Allocation of resources to try and ban cryptocurrency (or encryption in general) is probably one of the dumbest things ever conceived, probably even more so than the drug war.
Regulators don’t have to ban cryptocurrency use among citizens, they only have to ban/overtax everyone trying to cash it out or to run a legal business in it, to reduce liquidity to a level when it’s more risky or expensive than regular laundering. Cryptokids may then play their encryption penny as usual.
It's entirely easy to make crypto legally useless for legal transactions. The fellow making you coffee won't take crypto if he can only use it to buy drugs. This doesn't mean it will happen but conflating encryption and crypto is poorly considered because we have a long history of regulating commerce.
That's an argument that has been made yes.
There is no future tense here.
Bitcoin is designed to be fungible - it's digital cash.
Bitcoin is designed to be fungible - it's digital cash.
Maybe it was "designed to be", but in reality it isn't.
BTC has a history, so if I had 1 BTC, and you had 1 BTC, they wouldn't be equivalent.
When you deposit BTC into a Coinbase account from a gambling site, CB shuts down your account. That is irrefutable proof that BTC is not fungible.
Compare it to cash which is fungible. If you win money at a casino and deposit it at a bank, the bank doesn't know where you got the cash from.
BTC has a history, so if I had 1 BTC, and you had 1 BTC, they wouldn't be equivalent.
When you deposit BTC into a Coinbase account from a gambling site, CB shuts down your account. That is irrefutable proof that BTC is not fungible.
Compare it to cash which is fungible. If you win money at a casino and deposit it at a bank, the bank doesn't know where you got the cash from.
> If you win money at a casino and deposit it at a bank, the bank doesn't know where you got the cash from.
You're off base here. There's serial numbers on money and many databases maintained both public and private meant to track those and flag inflows of marked bills. The bank absolutely might know where you got the cash from -- the difference is that there are legal guarantees for the fungibility of cash. It is enforced by law that if someone pays you a dollar, you are legally obligated to accept that as tender. For all debts both public and private.
The fungibility of the dollar is not rooted in lack of ability to track dollars, it is rooted in state violence.
Anyways everyone should use Monero. BTC is obviously far less fungible than a dollar.
You're off base here. There's serial numbers on money and many databases maintained both public and private meant to track those and flag inflows of marked bills. The bank absolutely might know where you got the cash from -- the difference is that there are legal guarantees for the fungibility of cash. It is enforced by law that if someone pays you a dollar, you are legally obligated to accept that as tender. For all debts both public and private.
The fungibility of the dollar is not rooted in lack of ability to track dollars, it is rooted in state violence.
Anyways everyone should use Monero. BTC is obviously far less fungible than a dollar.
You're right about dollars being only legally-fungible. It's been hypothesized that there are databases tracking when and where dollars are used based on serial numbers, but to my knowledge, there hasn't been any reliable confirmation of that. If there is such a database, at least it's not publically available like Bitcoin's is. So, I agree with you that Monero should be used over Bitcoin (disclaimer, I own some XMR).
The banks themselves launder money for organized crime. Why shouldn’t money laundering be available to the masses too?
There are a multitude of other crypto coins, that have been around for a long while, that similarly provide lots of privacy, and yet they aren't illegal.
People have been yelling about this all being made illegal for literally a decade, and it hasn't happened yet.
People have been yelling about this all being made illegal for literally a decade, and it hasn't happened yet.
Why would any of this be made illegal? It's a jurisdictional enforcement issue, that isn't targeted at the asset - it's targeted at the individual who thinks they're going to make large financial transactions and not meet the KYC requirements - which will come up when you have to declare how you attained a whole lot of assets or cash to the IRS.
Of course, you could not do all those things...but it would be just as illegal and lead to you being just as in jail (and your assets seized) as it would for any other currency.
So sure: technically you can hide a bunch of stuff with BTC, but you can do that with USD just fine too (cash is pretty untraceable). The moment you get caught though, you're just as screwed.
Of course, you could not do all those things...but it would be just as illegal and lead to you being just as in jail (and your assets seized) as it would for any other currency.
So sure: technically you can hide a bunch of stuff with BTC, but you can do that with USD just fine too (cash is pretty untraceable). The moment you get caught though, you're just as screwed.
> Why would any of this be made illegal?
Of course crypto privacy features are not going to be made illegal. That was my entire argument. Crypto has been around for a decade, and lots of privacy coins exist, and are not illegal.
Therefore, other crypto features that make KYC more difficult are also not going to be made illegal.
Of course crypto privacy features are not going to be made illegal. That was my entire argument. Crypto has been around for a decade, and lots of privacy coins exist, and are not illegal.
Therefore, other crypto features that make KYC more difficult are also not going to be made illegal.
> Then it's going to be weaponized to launder money
We should stick with USD. No one does anything illegal with USD
We should stick with USD. No one does anything illegal with USD
Holy fucking strawman, Batman!
Way to skip over the different potentials for abuse and just dive to the cryptonerd's handwaive argument.
Looking forward to your insights about rubber and glue.
Way to skip over the different potentials for abuse and just dive to the cryptonerd's handwaive argument.
Looking forward to your insights about rubber and glue.
"bitcoin is for illegal things" is the OG handwaive argument so nothing substantial was needed to swat it down :)
There you go strawmanning again.
The claim wasn’t "BitCoin is for illegal things (and by comparison, USD is never used for crime)", it was "BitCoin's lack of support for KYC makes it more likely to be attractive to criminals and therefore likely to have its use criminalized" which you CAN'T just hand waive away.
The claim wasn’t "BitCoin is for illegal things (and by comparison, USD is never used for crime)", it was "BitCoin's lack of support for KYC makes it more likely to be attractive to criminals and therefore likely to have its use criminalized" which you CAN'T just hand waive away.
I can trade stacks of USD without any KYC.
Yes, which is why all ransomwares ask money in USD, right?
Your point being what? That because USD is uncommonly used in ransomware it can't be used to commit crimes? Do you really think that no extortion has ever taken place via USD? Because I can guarantee you that money-related crimes and scams happen in just about every single form of currency, even things that technically aren't even currency like gift cards.
[deleted]
> ransomwares
this is not even worth looking at compared to other money-related crimes (just new and in media so people are scared)
this is not even worth looking at compared to other money-related crimes (just new and in media so people are scared)
BTC is less anonymous than cash.
> launder money
means different things in different places
> made illegal
it's already illegal here and there
means different things in different places
> made illegal
it's already illegal here and there
You could even go further:
BTC is built to not support KYC/AML.
BTC is built to not support KYC/AML.
Have those regulations ever made any sense? If someone is involved in illegal activity, then prosecute him for that. Banks' purpose is to manage wealth, not to be policemen.
BMW and it's suppliers have zero problems moving money today.
try not to focus on the alice and bob portion of the explanation
People had little problem with transportation when all they had was horses and sailboats.
Just because you don't technically have a problem doing something now and no one is complaining, doesn't mean there's not a drastically more efficient way to do the thing, and those organizations that start doing the more efficient thing rapidly out compete and make irrelevant those who hold onto the legacy ways.
Just because you don't technically have a problem doing something now and no one is complaining, doesn't mean there's not a drastically more efficient way to do the thing, and those organizations that start doing the more efficient thing rapidly out compete and make irrelevant those who hold onto the legacy ways.
Bitcoin is the horse and buggy in this comparison - while attempting to naively remove control possibilities and making it "trustless" aka a free for all/wildwest where nations can't use financial levers to try to economically punish known bad actors, e.g. Magnitsky Act.
>where nations can't use financial levers to try to economically punish known bad actors, e.g. Magnitsky Act.
Probably unknowable but I wonder what has caused more damage to the world, financial crimes or centralized financial levers being used to steal the time/savings/wealth of 8 billion people and redistribute it to a small group of people.
Probably unknowable but I wonder what has caused more damage to the world, financial crimes or centralized financial levers being used to steal the time/savings/wealth of 8 billion people and redistribute it to a small group of people.
Most of that wealth occurred through policy layers, corruption within systems, or bruteforce/violence - not because there's a financial-transactional later.
Also,
- $1.9B in crypto currency stolen by hackers last year [that's known about/reporter]; https://www.securitymagazine.com/articles/94627-19b-in-crypt...
- Bitcoin extortion: How cryptocurrency has enabled a massive surge in ransomware attacks (Crypto revenues from ransomware surged more than 300% in 2020 from the year before) - https://www.marketwatch.com/story/bitcoin-extortion-how-cryp...
How does that criminal activity keep scaling? And you do you think criminal enterprise won't target to infiltrate organizations who hold large amounts of Bitcoin et al to infiltrate to steal the keys to the vault? Then the only way to counter that is centralized database/service to check all transactions through to make sure the funds didn't originate from criminal activity, and then centralized authority for enforcement, etc.
Bitcoin Maximalists or crypto-"currency" enthusiasts skip over, don't respond to such criticism as it doesn't fit into their glossy propagandist narratives that Bitcoin etc al are godsend - they keep the scope of conversation and talking points narrow or cordoned off - which is super obvious with most Bitcoin spokespeople, though the most popular are intelligent ideologues who speak beautifully, poetically, in inspiring way that's motivating - but still lacks the rigor of challenge by peer confrontation; Jordan Peterson recently had a popular Bitcoiner on to speak, it's good he's diving deep into it, let's hope he doesn't get too indoctrinated into an imbalanced/out of balanced doctrine spread by financially motivated individuals; imagine if being part of a religion and proselytizing was financially advantageous - where the earlier on you're in on the pyramid (with contributions to the church to "show your commitment") lead to a potential windfall or promise of such if and once everyone in the world is part of that religion/cult.
Also,
- $1.9B in crypto currency stolen by hackers last year [that's known about/reporter]; https://www.securitymagazine.com/articles/94627-19b-in-crypt...
- Bitcoin extortion: How cryptocurrency has enabled a massive surge in ransomware attacks (Crypto revenues from ransomware surged more than 300% in 2020 from the year before) - https://www.marketwatch.com/story/bitcoin-extortion-how-cryp...
How does that criminal activity keep scaling? And you do you think criminal enterprise won't target to infiltrate organizations who hold large amounts of Bitcoin et al to infiltrate to steal the keys to the vault? Then the only way to counter that is centralized database/service to check all transactions through to make sure the funds didn't originate from criminal activity, and then centralized authority for enforcement, etc.
Bitcoin Maximalists or crypto-"currency" enthusiasts skip over, don't respond to such criticism as it doesn't fit into their glossy propagandist narratives that Bitcoin etc al are godsend - they keep the scope of conversation and talking points narrow or cordoned off - which is super obvious with most Bitcoin spokespeople, though the most popular are intelligent ideologues who speak beautifully, poetically, in inspiring way that's motivating - but still lacks the rigor of challenge by peer confrontation; Jordan Peterson recently had a popular Bitcoiner on to speak, it's good he's diving deep into it, let's hope he doesn't get too indoctrinated into an imbalanced/out of balanced doctrine spread by financially motivated individuals; imagine if being part of a religion and proselytizing was financially advantageous - where the earlier on you're in on the pyramid (with contributions to the church to "show your commitment") lead to a potential windfall or promise of such if and once everyone in the world is part of that religion/cult.
I think it's a grand experiment.
Perhaps the primary output of bitcoin will be that it lights a fire under the lazy ass of government to actually have a service mindset towards people, because they now have an alternative that they can use however they want.
We'll see.
Perhaps the primary output of bitcoin will be that it lights a fire under the lazy ass of government to actually have a service mindset towards people, because they now have an alternative that they can use however they want.
We'll see.
Yes, I agree with you - it's likely been a necessary mechanism as a counterweight to the current corruption and lack of integrity in the system.
How do you know?
Because there are no articles about big companies having money transfer problems with their suppliers.
The complains are about the "buy now pay 90 days later" part, not about the actual money transfer.
The complains are about the "buy now pay 90 days later" part, not about the actual money transfer.
How hard did you try to find such articles?
I would imagine the suppliers of Wirecard do see it as a problem that the $2B WireCard said it has in the bank did not exist. In a blockchain setup, they would have known it.
Ducking for "supplier" and "insolvency" brings up quite a lot of stuff about this topic:
https://duckduckgo.com/?q=insolvency+suppliers
I would imagine the suppliers of Wirecard do see it as a problem that the $2B WireCard said it has in the bank did not exist. In a blockchain setup, they would have known it.
Ducking for "supplier" and "insolvency" brings up quite a lot of stuff about this topic:
https://duckduckgo.com/?q=insolvency+suppliers
Supplier insolvency has nothing to do with money transfer.
And if you think that you can "lock bitcoin" into an account to avoid this, you obviously don't know much about how these things work. Hint: you can also "lock dollars" today, it's called "escrow". But it wasn't used in WireCard (I take your word for it, I don't know the case).
Explained like I'm five: BMW will not accept it's bitcoin being locked for 90 days, so that it's supplier can be sure it will receive it's pay. Because if BMW would have accepted such a thing, it would pay today, not 90 days later. So crypto doesn't solve any problem here, because BMW doesn't want this problem solved.
And today, the supplier would use "factoring" so that it can receive the money instantly, instead of 90 days later, and the bank which provides the factoring service will make sure to take it's money from BMW later. Hint: you need capital to be able to provide factoring, since it involves credit risk, so crypto can't replace that either directly (it could with some fancy smart contracts that pool liquidity and yield)
And if you think that you can "lock bitcoin" into an account to avoid this, you obviously don't know much about how these things work. Hint: you can also "lock dollars" today, it's called "escrow". But it wasn't used in WireCard (I take your word for it, I don't know the case).
Explained like I'm five: BMW will not accept it's bitcoin being locked for 90 days, so that it's supplier can be sure it will receive it's pay. Because if BMW would have accepted such a thing, it would pay today, not 90 days later. So crypto doesn't solve any problem here, because BMW doesn't want this problem solved.
And today, the supplier would use "factoring" so that it can receive the money instantly, instead of 90 days later, and the bank which provides the factoring service will make sure to take it's money from BMW later. Hint: you need capital to be able to provide factoring, since it involves credit risk, so crypto can't replace that either directly (it could with some fancy smart contracts that pool liquidity and yield)
BMW will not accept it's bitcoin
being locked for 90 days
Surely suppliers want to be paid? Accumulating a huge pile of IOUs is of zero benefit to someone who has actual real-world costs, such as taxes, payroll and capital outlays.
What do you mean by "be paid"?
Usually, one is "paid" when "the money is in the bank", right?
And this is what happens here. The initial step is to create a bank and then "payments" happen there.
As for how to pay someone who is not "customer" of this bank, see my answer to this question:
https://news.ycombinator.com/item?id=29227788
Usually, one is "paid" when "the money is in the bank", right?
And this is what happens here. The initial step is to create a bank and then "payments" happen there.
As for how to pay someone who is not "customer" of this bank, see my answer to this question:
https://news.ycombinator.com/item?id=29227788
Lots of firms, especially those whose value is based partially on "predictable" profits, want to schedule payments in Q2 rather than Q1.
Lightning transactions are final. Anything else is FUD.
I've heard stories about the difficulty about payments at AirBnB, where the suppliers are local people across the globe in different languages with varying levels of access to financial services. It's one of the things that inspired the Coinbase founder, who was an ex-AirBnB employee, to start his company.
And Net X(Net 90 in your case) is part of business, so it' not going away because of a blockchain.
What about Venezuelan or Iranian companies?
Tesla didn't like paying banks to store its money in Europe via negative interest rates, so they moved in into Bitcoin.
https://www.techtimes.com/articles/263185/20210721/elon-musk...
https://www.techtimes.com/articles/263185/20210721/elon-musk...
That has nothing to do with transferring money.
Tesla also holds bonds and other stuff that pays a dividend.
Tesla also holds bonds and other stuff that pays a dividend.
"And all of the transaction were free", Wait? Since when are transactions free and instant? Is that part of this upgrade? The only costs are with the "bank transaction"?
A second layer transaction does not involve the Bitcoin network.
When Katy wants to pay ₿3 to Billie, Katy just sends a key (via email or some API) to Billie which enables Billie to withdraw ₿3 from the account of Katy. But Billie does not do that. Billie just keeps that message like you keep your login to your bank account.
When Katy wants to pay another ₿5 to Billie, Katy sends a key to Billie which enables Billie to withdraw ₿8 from the account of Katy.
Now Katy paid Billie ₿8 in two transactions. All via email, letter, telephone or - most likely - API. Nothing at all happened on the Bitcoin network.
When Katy wants to pay ₿3 to Billie, Katy just sends a key (via email or some API) to Billie which enables Billie to withdraw ₿3 from the account of Katy. But Billie does not do that. Billie just keeps that message like you keep your login to your bank account.
When Katy wants to pay another ₿5 to Billie, Katy sends a key to Billie which enables Billie to withdraw ₿8 from the account of Katy.
Now Katy paid Billie ₿8 in two transactions. All via email, letter, telephone or - most likely - API. Nothing at all happened on the Bitcoin network.
However, if nothing happens on the Bitcoin network, then the funds aren't locked down, are they?
In other words, Billie has no guarantee that the key she holds will be valid tomorrow; Katy could empty that account at any time, and Billie would then hold nothing except the evidence of Katy's wrongdoing.
In other words, Billie has no guarantee that the key she holds will be valid tomorrow; Katy could empty that account at any time, and Billie would then hold nothing except the evidence of Katy's wrongdoing.
Bitcoin supports post dating transactions. The transaction can be updated between parties, off chain. Lightning Network. If a bad actor gets involved, the last transaction updated between both parties rules and is the remainder is refunded upon the timeout of the post dating.
This function is provided by script: https://en.bitcoin.it/wiki/Script
This function is provided by script: https://en.bitcoin.it/wiki/Script
> However, if nothing happens on the Bitcoin network, then the funds aren't locked down, are they?
they are locked down. the funds in a lightning channel are locked in a 2 of 2 multisig address, and can only be moved upon mutual consent (ie. by updating the state of the channel), or by one party after sufficient time has passed (in case of an uncooperative peer).
they are locked down. the funds in a lightning channel are locked in a 2 of 2 multisig address, and can only be moved upon mutual consent (ie. by updating the state of the channel), or by one party after sufficient time has passed (in case of an uncooperative peer).
What do these LN dynamics (which seem to have existed for a little while already now) have to do with Taproot?
OP was describing something in the context of Taproot and now you and others are talking about Lightning. What is the new development here?
OP was describing something in the context of Taproot and now you and others are talking about Lightning. What is the new development here?
Roughly, Taproot will make Lightning Transactions much more efficient and indistinguishable from simple transactions by introducing a new „Pay-To-Taproot“ validation type.
https://blog.chainalysis.com/reports/bitcoin-taproot-upgrade
https://blog.chainalysis.com/reports/bitcoin-taproot-upgrade
Lightning channel opens/closes are 2-of-2 multisig transactions. Taproot would make them indistinguishable from singlesig transactions.
Whoa now, how did we start talking about lightning? Has it been lightning all the time? Because that's always supported instant, near-free transactions (with a _bunch_ of problems too, that I'll not worry about).
> In parallel to that, we plan to use Taproot’s new “tapleaf” script versioning scheme to implement Simplicity, our upcoming blockchain programming language.
https://medium.com/blockstream/taproot-activation-enhanced-t...
https://medium.com/blockstream/taproot-activation-enhanced-t...
Does this stop a double spend?
Yes, why wouldn't it? The funds are locked in a 2 of 2 multisig address.
I'm confused then, doesn't this still need one transaction in the block chain for every transaction?
No, the transaction is fully signed and can be broadcast at any time by either party to settle. It doesn't have to be broadcasted and further transactions can be done on top and they just keep it private between themselves.
I'm missing how you can have a transaction that is not broadcasted but that prevents a double spend. Can't I give two different people signed transactions for the same bitcoins? How could the second recipient know I've already spent the balance on the first? Apologies for the no-doubt naive questions, it just sounds impossible.
There would first be 1 broadcasted on-chain transaction setting up the channel, with X of my bitcoin and Y of your bitcoin being locked up. This prevents double spend. Then, you and I pass n signed transactions between each other updating our balances Xt & Yt for each t, t+1, ...t+n. At any time, either one of us can broadcast the final transaction with the most up to date balance and unlock the coins.
So it requires one on-chain transaction per pair of parties instead of one per transaction? Clever and I suppose useful but seems a little limited in use, given that the funds are locked the whole time. Good for two parties that frequently have transactions going in both directions?
Is it that the not-on-the-Bitcoin-blokchain account gets updated on a separate "layer 2" Blockchain that's cheaper? If so, why would that second chain stay cheaper?
Lightning transactions are all final and irreversible via cryptography mechanisms.
Theres a timelock enforced by the blockchain.
Don't LN channels require a (quite expensive) transaction to open and close?
>quite expensive
Are you talking about compared to regular transactions, or because network fees (per byte) are high?
Are you talking about compared to regular transactions, or because network fees (per byte) are high?
Quite expensive, as in $1?
That $1 enables as many transactions as you want between party A and B, of which party B may have dozens of open channels with other nodes to facilitate routing from party A to C etc.
That $1 enables as many transactions as you want between party A and B, of which party B may have dozens of open channels with other nodes to facilitate routing from party A to C etc.
Katy could empty that account at any time
Realistically, the spending conditions are either limited by time. So Billie knows she needs to withdraw until a certain date or Katy could betray her. Or the spending conditions contain a punishment for betrayal. So if Katy tries to withdraw money she assigned to Billie, Billie can intervene, get her money and punish Katy.
Can you send 8worthless$ using that method, then move money out of the account via normal transfer?
no, because the funds are locked down while in the lightning channel. see: https://news.ycombinator.com/item?id=29228483
> VIA email or API
Isn’t this an example of a centralized bottleneck?
Isn’t this an example of a centralized bottleneck?
Parent talks about the „Lightning Network“ — a Layer 2 scaling solution for Bitcoin. Beware: I am still a crypto noob but I am still going to try to explain how I understood the system so far. Edited: Minor terminology and typos.
Roughly speaking the Lightning Network works similar to a „current account“ that businesses have between each other but does not require the actors to trust each other. The parties initiate a transaction by each one sending Bitcoin to a public multi signature address. The resulting transaction cannot be spent by any one alone. Now, this unspent transaction serves as an initial balance and opens a channel between the parties on the layer 2 network. Bitcoin may now be wired back and forth between the parties on layer 2 w/o needed to be settled individually on the Bitcoin block chain. Finally, if all parties agree by signing a second, settling transaction the resulting balance is written back to the Blockchain to whatever address the participants initially agreed upon. Theoretically, there could have been billions of Bitcoin transactions over the years on the Lightning Network which would be eventually represented by only two transactions on the chain.
Now, taproot improves this scheme by introducing Schnorr signatures. Up to now every member of the multisig transaction I just talked about needed to contain the public keys of all parties which in turn needed to be verified against all their private keys. Since transactions are limited in their size, this limited the applicability of multisig transactions. Now, Schnorr signatures allow for aggregation of public keys so the transaction only needs to contain a single number instead of hundreds or thousands. Of course, this also speeds up validations of transactions.
I hope this all made sense. I have yet to see practical applications of a Lightning Network „scheme“ but I heard El Salvador is using it for cheap Bitcoin transactions (although not applying Schnorr signatures yet).
Roughly speaking the Lightning Network works similar to a „current account“ that businesses have between each other but does not require the actors to trust each other. The parties initiate a transaction by each one sending Bitcoin to a public multi signature address. The resulting transaction cannot be spent by any one alone. Now, this unspent transaction serves as an initial balance and opens a channel between the parties on the layer 2 network. Bitcoin may now be wired back and forth between the parties on layer 2 w/o needed to be settled individually on the Bitcoin block chain. Finally, if all parties agree by signing a second, settling transaction the resulting balance is written back to the Blockchain to whatever address the participants initially agreed upon. Theoretically, there could have been billions of Bitcoin transactions over the years on the Lightning Network which would be eventually represented by only two transactions on the chain.
Now, taproot improves this scheme by introducing Schnorr signatures. Up to now every member of the multisig transaction I just talked about needed to contain the public keys of all parties which in turn needed to be verified against all their private keys. Since transactions are limited in their size, this limited the applicability of multisig transactions. Now, Schnorr signatures allow for aggregation of public keys so the transaction only needs to contain a single number instead of hundreds or thousands. Of course, this also speeds up validations of transactions.
I hope this all made sense. I have yet to see practical applications of a Lightning Network „scheme“ but I heard El Salvador is using it for cheap Bitcoin transactions (although not applying Schnorr signatures yet).
The other half of the Taproot update besides Schnorr signatures is support for MASTs: Merklized Abstract Syntax Trees. This allows you to create scripts (smart contracts) where only the used part of the script needs to be revealed when the funds are transferred. Other parts which were not used—for example, the clauses related to recovering funds in the event of a non-cooperating peer in a Lightning channel when the channel is closed normally—need not be included in the transaction, which both improves privacy and reduces the transaction size (and thus also the fees).
So, basically, a dead code elimination scheme?
I do wonder how it could ensure the code running is the actual code signed for as its hash would be different though.
I do wonder how it could ensure the code running is the actual code signed for as its hash would be different though.
Because the code is rearranged into a top level arbitrary tree ORs and the hashing commits to this tree.
At signing time, the signer reveals a hash for every non-taken branch, so that the commitment still checks that leaf being executed was an admissible one.
The dead-code elimination goes further than that, because at the top level this hash root is hidden inside a public key which can be a key controlled by all the participants jointly (or some subset if appropriate). At signing time if these top level parties are available and cooperate they can just sign, and no script is ever revealed, it's impossible for third parties to tell it was ever there-- saving resources and preserving privacy.
(And the possibility to complete the transaction using the script means they don't gain from failing to cooperate)
At signing time, the signer reveals a hash for every non-taken branch, so that the commitment still checks that leaf being executed was an admissible one.
The dead-code elimination goes further than that, because at the top level this hash root is hidden inside a public key which can be a key controlled by all the participants jointly (or some subset if appropriate). At signing time if these top level parties are available and cooperate they can just sign, and no script is ever revealed, it's impossible for third parties to tell it was ever there-- saving resources and preserving privacy.
(And the possibility to complete the transaction using the script means they don't gain from failing to cooperate)
"Bitcoin may now be wired back and forth between the parties on layer 2 w/o needed to be settled individually on the Bitcoin block chain."
Cooperatively update the final state would be more precise. And if one party is uncooperative then a timeout contract becomes valid. Your understanding is generally correct. Also bitcoin doesn't use the word crypto which is closely associated with scams. Bitcoin is about the 21 million coin limit so only one currency not cryptocurrencies.
Parent talks about the „Lightning Network“
So is the "BMW and its suppliers" network I imagined. But this network is simpler and more customized to the needs of this particular use case.
Of course using the LN would be a viable alternative to a custom solution.
I see, so in principle, taproot would facilitate to set up custom scaling solutions for Bitcoin payment schemes.
Perhaps a simplification to this would be a poker night, where at the beginning of the evening everyone puts in some real money and in return get poker chips. At the end of the night people can exchange whatever chips they have left for real money.
> the latest state will go on chain
You'll need to have a revocation mechanism to punish older states being put on chain. That may not be so simple when (many) more than 2 parties are involved.
> Or it could be "BMW did ten thousand transactions with its suppliers". You don't know.
Amounts are still visible as well as number of entities paid by the settlement. Recipients may become identifiable through follow-up transactions or re-use of known public keys.
> And all of the transactions were free
All but the initial funding tx and the final settlement tx.
You'll need to have a revocation mechanism to punish older states being put on chain. That may not be so simple when (many) more than 2 parties are involved.
> Or it could be "BMW did ten thousand transactions with its suppliers". You don't know.
Amounts are still visible as well as number of entities paid by the settlement. Recipients may become identifiable through follow-up transactions or re-use of known public keys.
> And all of the transactions were free
All but the initial funding tx and the final settlement tx.
Yes, it will probably take years before we all settle on standardized ways of doing these things. But in theory, they are possible now.
Yes, the initial tx and the final tx will provide data for forensic analysis.
Yes, the initial and final tx need some time to settle (something like an hour) and cost some money (something like a few dollars at current rates).
Yes, the initial tx and the final tx will provide data for forensic analysis.
Yes, the initial and final tx need some time to settle (something like an hour) and cost some money (something like a few dollars at current rates).
So if I’m a single supplier and I want to act as a hostile actor in order to negotiate better terms or something, does my refusing to sign mean that _all_ supplier transactions are reversed or at least slowed on chain? Is there an actual attack surface here?
Also, if I’m adding a new supplier in this example, do I have to spin up an entirely new “virtual bank” to do so? Or can I just add them to the current one? What is the user experience there?
Also, if I’m adding a new supplier in this example, do I have to spin up an entirely new “virtual bank” to do so? Or can I just add them to the current one? What is the user experience there?
This is a new fundamental building block that would help make these types of scenarios possible. However, by the time end users get an implementation, it will likely be more complicated than a single transaction for the reasons you mention and others.
Also note, as exemplified by altcoins it is always possible to trade off decentralization or security for more features.
Also note, as exemplified by altcoins it is always possible to trade off decentralization or security for more features.
You will open a virtual bank with one of the big nodes, say Binance, and they will handle the rest.
He’s talking about lightning network with multisig support, which I thought they always had, only that with taproot a multi signiture can be combined as one, which would look like a single person signed it
[deleted]
How is this different from the lightning network?
It sounds quite similar except it hasn’t solved the problem that Lightning has—participants can broadcast old states to rewind history.
Probably should just use Lightning instead?
Probably should just use Lightning instead?
How does this handle someone spending bitcoin outside of the virtual bank?
Different approaches come to mind.
One is that one of the participants is a virtual bank on its own. This would be similar to the old banking system. How do you send money to someone who uses a different bank? By telling your bank to talk to their bank.
One is that one of the participants is a virtual bank on its own. This would be similar to the old banking system. How do you send money to someone who uses a different bank? By telling your bank to talk to their bank.
Would that be useful for privacy too?
One of the most interesting things in this experiment was the speedy trial imo. We now have an agreed way to change/improve consensus rules. It's very difficult to get a handful of people to agree on something, let alone all the different participants in this global/borderless system.
That's because bitcoin is so centralized these days, that you can get all the people that matter in a room and hash things out.
Note how half of the Bitcoin network nodes don't support taproot yet, but it's irrelevant. The few nodes that matter do support it.
Note how half of the Bitcoin network nodes don't support taproot yet, but it's irrelevant. The few nodes that matter do support it.
You don't strictly need mass consensus for a softfork.
Taproot is a softfork, which means a tightening of the rules. There are basically a set of placeholder script types, that are currently undefined by the network ruleset. By being undefined, you can basically add whatever garbage you want, and it will technically be valid.
So, blocks that are mined now with taproot transactions are still considered valid by nodes and miners that haven't upgraded or don't support the change. Their nodes just see these transactions as unintelligible garbage, but still permissible.
However, the risk these nodes take on by not upgrading support, is that they might receive a block, assume it's valid even though there are transactions they don't understand, but in fact are invalid taproot transactions and rejected by the upgraded network. This is a much greater concern for miners than regular nodes, because miners have severe economic risks associated with incorrectly assuming an invalid block is valid, whereas non mining nodes don't have as great of a risk, because they generally wait for several confirmed blocks before assuming their transactions were confirmed.
Taproot is a softfork, which means a tightening of the rules. There are basically a set of placeholder script types, that are currently undefined by the network ruleset. By being undefined, you can basically add whatever garbage you want, and it will technically be valid.
So, blocks that are mined now with taproot transactions are still considered valid by nodes and miners that haven't upgraded or don't support the change. Their nodes just see these transactions as unintelligible garbage, but still permissible.
However, the risk these nodes take on by not upgrading support, is that they might receive a block, assume it's valid even though there are transactions they don't understand, but in fact are invalid taproot transactions and rejected by the upgraded network. This is a much greater concern for miners than regular nodes, because miners have severe economic risks associated with incorrectly assuming an invalid block is valid, whereas non mining nodes don't have as great of a risk, because they generally wait for several confirmed blocks before assuming their transactions were confirmed.
> That's because bitcoin is so centralized these days
Citation badly needed.
For taproot to rollout, you need wallet providers, exchanges, nodes and miners to agree. There are hundreds/thousands of different participants in each one of these categories across the world. Specifically, 90% of nodes need to signal for it.
Citation badly needed.
For taproot to rollout, you need wallet providers, exchanges, nodes and miners to agree. There are hundreds/thousands of different participants in each one of these categories across the world. Specifically, 90% of nodes need to signal for it.
It says right in the article that wallets don't support taproot either at the moment.
> Specifically, 90% of nodes need to signal for it.
Wrong, 90% of mined blocks need to signal it, not 90% of nodes. Big difference:
> at least 90% of the blocks mined in any of the designated two-week difficulty periods "signal" their support for the upgrade, then the activation process can begin. To be more precise: 1,815 out of 2,016 blocks mined within a period have to include a little piece of encoded information that indicates that the miners who mined those blocks are in favor of the upgrade.
https://www.coindesk.com/tech/2021/06/12/locked-in-bitcoins-...
> Specifically, 90% of nodes need to signal for it.
Wrong, 90% of mined blocks need to signal it, not 90% of nodes. Big difference:
> at least 90% of the blocks mined in any of the designated two-week difficulty periods "signal" their support for the upgrade, then the activation process can begin. To be more precise: 1,815 out of 2,016 blocks mined within a period have to include a little piece of encoded information that indicates that the miners who mined those blocks are in favor of the upgrade.
https://www.coindesk.com/tech/2021/06/12/locked-in-bitcoins-...
There are a number of ways to achieve consensus, rawtxapp is right in general that many decentralized parties need to agree. For Taproot in particular, it uses BIP 8 (see https://github.com/bitcoin/bips/blob/master/bip-0008.mediawi... and https://github.com/bitcoin/bips/blob/master/bip-0343.mediawi... and more generally https://bitcoinmagazine.com/technical/bip-8-bip-9-or-modern-...) with LockinOnTimeout=true. The effect of this is that miners cannot block the upgrade so long as the (eventual) majority of nodes wishes to have the upgrade, they can only hurry things along and mostly protect the minority of older clients who have yet to upgrade.
In other words: "La la la, I can't hear you".
Either admit that bitcoin is centralized, or contend that it isn't. Don't just ask for a footnote.
Either admit that bitcoin is centralized, or contend that it isn't. Don't just ask for a footnote.
Bitcoin is centralized.
If you want any chance at mining, you'll need an ASIC miner.
And the few companies that sell them, are sold out.
Or there's some shady dealers that only will accept Bitcoin for payment, so you basically have no insurance if they don't deliver the miner.
If you want any chance at mining, you'll need an ASIC miner.
And the few companies that sell them, are sold out.
Or there's some shady dealers that only will accept Bitcoin for payment, so you basically have no insurance if they don't deliver the miner.
Interesting take, I found the trial to be aggravatingly slow because the bitcoin community is too risk averse and also inattentive, whereas people (person) disagreeing with you basically have no idea how long it actually took and use it to bolster their view that bitcoin is centralized and amorphous.
Taproot was proposed 2.5 years ago; maybe that's speedy in "Bitcoin core time".
The specification and software was finished a year ago: https://github.com/bitcoin/bitcoin/pull/19953
It is a feature, it is not a bug.
It's not a hard fork, is it?
Ignore at your own potential peril..
BTCers don't care, apparently
https://coingeek.com/could-taproot-privacy-features-make-btc...
BTCers don't care, apparently
https://coingeek.com/could-taproot-privacy-features-make-btc...
There's game theory at play here that transcends the legal system.
Yes, the US and the EU could deem these cryptocurrencies to be illegal. However, as we saw in China, all that accomplishes is squeezing it out of your borders, or squeezing it to the black market. Making it illegal would also be an insanely strong signal to the entire world that this thing actually is uncontrollable by our current governments, and that they're scared of it.
Knowing they can never actively kill it, just drive it elsewhere, these societies have to take a gamble. Either assume it's eventually going to wither and die after they ban it, thereby protecting their citizens from wasting time and money on the system, or assume it's going continue to grow into being the foundation of a new global monetary system that's going to automate and consume everything that's existed before, and severely miss out on being at the vanguard of that industry.
Yes, the US and the EU could deem these cryptocurrencies to be illegal. However, as we saw in China, all that accomplishes is squeezing it out of your borders, or squeezing it to the black market. Making it illegal would also be an insanely strong signal to the entire world that this thing actually is uncontrollable by our current governments, and that they're scared of it.
Knowing they can never actively kill it, just drive it elsewhere, these societies have to take a gamble. Either assume it's eventually going to wither and die after they ban it, thereby protecting their citizens from wasting time and money on the system, or assume it's going continue to grow into being the foundation of a new global monetary system that's going to automate and consume everything that's existed before, and severely miss out on being at the vanguard of that industry.
A currency that is not usable in China _or_ the West is inherently less valuable. Most of the bitcoin users are speculators, not people enamored by its value as a currency, and if they need to go to Lebanon to withdraw their gains in a fiat currency, then that is a serious negative.
We don't consider dollars less valuable if they're paid via American Express, even though it's less accepted than Visa.
As long as there's a critical mass of users somewhere, the "who accepts what" problem reduces to a software problem that most people will ignore.
As long as there's a critical mass of users somewhere, the "who accepts what" problem reduces to a software problem that most people will ignore.
No, but in this analogy, bitcoin is american express, not USD. American Express cards are definitely considered less valuable to potential customers here because they're only accepted in ~70% of stores. It's been a bone of contention at my current employer as our corporate cards are American express but they consequently can't be used semi-frequently
I'm not saying that the government can't ruin your day if you're trying to buy things with bitcoin and they ban it in your country. I just don't think that doing so will have much effect on its perceived value, globally speaking.
Consider BTC-backed debit cards, which give the illusion of paying in bitcoin where only fiat is accepted by converting the tokens at transaction-time. For a government to prevent things like that will require that government's citizens to bear costs that other citizens don't:
- pay the regulators to keep crypto disconnected from fiat
- pay the payments companies to hire people to comply with the regulators
- tolerate the necessary censorship and subsequent unrest when it is abused
This kind of nonproductive spending will hash out as a drag on that government's currency. It wouldn't be crazy for its citizens to start stocking up on crypto (perhaps illegally) as a hedge against local fiat-collapse. Surely a downward spiral for the local crypto user experience, but a problem for BTC as a whole? I don't think so.
Consider BTC-backed debit cards, which give the illusion of paying in bitcoin where only fiat is accepted by converting the tokens at transaction-time. For a government to prevent things like that will require that government's citizens to bear costs that other citizens don't:
- pay the regulators to keep crypto disconnected from fiat
- pay the payments companies to hire people to comply with the regulators
- tolerate the necessary censorship and subsequent unrest when it is abused
This kind of nonproductive spending will hash out as a drag on that government's currency. It wouldn't be crazy for its citizens to start stocking up on crypto (perhaps illegally) as a hedge against local fiat-collapse. Surely a downward spiral for the local crypto user experience, but a problem for BTC as a whole? I don't think so.
This is not the right way to look at it though.
Bitcoin is not an alternative payment system. People keep getting confused on this point, partly because of how bitcoin was marketed in the early days (there obviously is no marketing team, just passionate people telling their stories about what they thought it was).
Bitcoin is the bedrock of an alternative monetary system. Visas and AmExes will be built on top of it, just like they are built on top of dollars.
And the analogy is not Visa competing with AmEx. It's the dollar competing with the Renminbi or Euro.
Bitcoin is not an alternative payment system. People keep getting confused on this point, partly because of how bitcoin was marketed in the early days (there obviously is no marketing team, just passionate people telling their stories about what they thought it was).
Bitcoin is the bedrock of an alternative monetary system. Visas and AmExes will be built on top of it, just like they are built on top of dollars.
And the analogy is not Visa competing with AmEx. It's the dollar competing with the Renminbi or Euro.
If only it were in fact an alternative. If only you could look at a BTC-rich person and conclude from their wallet balance that they've made meaningful contributions to society and are therefore deserving of whatever they're trying to pay you for in BTC. That would be cool.
But that's no more likely to be true than for a USD-rich person. Whatever ill-gotten USD gains have occurred in the past are easily transferrable to BTC, which means that its really just an alternative portal into the same monetary system, or perhaps the next evolution thereof. The only difference is that this time it doesn't have anybody behind the monetary-policy steering wheel.
But that's no more likely to be true than for a USD-rich person. Whatever ill-gotten USD gains have occurred in the past are easily transferrable to BTC, which means that its really just an alternative portal into the same monetary system, or perhaps the next evolution thereof. The only difference is that this time it doesn't have anybody behind the monetary-policy steering wheel.
That’s entirely too pessimistic to assume most rich people gained their riches through ill-gotten means.
As long as there's a critical mass of users somewhere
All that mass lives in EU, US and China, and nowhere else, that’s where the argument breaks down. You can buy a nice rc toy with bitcoin, but some day you may need a place to live in and they will ask you where you got the money from. And you’ll say, ah, that’s from that illegal btc exchange.
All that mass lives in EU, US and China, and nowhere else, that’s where the argument breaks down. You can buy a nice rc toy with bitcoin, but some day you may need a place to live in and they will ask you where you got the money from. And you’ll say, ah, that’s from that illegal btc exchange.
Do you think that there will be some kind of fiscal big bang in the future where all legitimate money stops being fungible? A point after which holding a dollar means holding something that can be traced back to that moment and shown to be held by one of the good guys? Because that's what it would take, and I just don't think the governments can pull it off. To say that one group of people's money/saleable property matters and the other group's doesn't--it smells too much like the creation of an aristocracy to get the masses to put up with it.
As long as you're willing to pay taxes on it as income when you bring it back into whatever system banned it, or whatever system replaced that one, you're going to be able to do it.
As long as you're willing to pay taxes on it as income when you bring it back into whatever system banned it, or whatever system replaced that one, you're going to be able to do it.
Serious question: Can't a government block it at the ISP level? They could also make out of country VPN illegal. How would BTC work in practicality under those conditions?
Then we go to spaaaaace https://blockstream.com/satellite/
Semi-serious jokes aside (the block stream satellite can receive blocks but not broadcast), the protocol can operate under Tor in which the bitcoin core daemon is very well integrated. If worst come to happen, sneaker net is somewhat popular (https://opendime.com) and people have transacted using radio waves as a proof of concept (https://satoshi.radio.br/wp/).
Semi-serious jokes aside (the block stream satellite can receive blocks but not broadcast), the protocol can operate under Tor in which the bitcoin core daemon is very well integrated. If worst come to happen, sneaker net is somewhat popular (https://opendime.com) and people have transacted using radio waves as a proof of concept (https://satoshi.radio.br/wp/).
Peer to peer on-chain transactions seem unkillable at this point.
Surely governments would target exchanges instead?
Without the dollars coming from retail investors, the value proposition for speculators disappears.
You could still trade bitcoin (slowly) at that point, but converting to fiat would be difficult.
Surely governments would target exchanges instead?
Without the dollars coming from retail investors, the value proposition for speculators disappears.
You could still trade bitcoin (slowly) at that point, but converting to fiat would be difficult.
The question for me, is if I can no longer legally sell my bitcoin for dollars, then that implies that bitcoin can't be legally valued.
Does that mean I can then exchange it directly with others without incurring a capital gains tax event?
Point is, shutting down legal exchanges won't happen in the US. Since you can't kill the underlying system or stop people from using it, you only make it impossible to tax.
Does that mean I can then exchange it directly with others without incurring a capital gains tax event?
Point is, shutting down legal exchanges won't happen in the US. Since you can't kill the underlying system or stop people from using it, you only make it impossible to tax.
It's just information.
You could broadcast it on any communications medium. You could theoretically run it over a global ham radio mesh network.
Lots of the network is already running on Tor, so you'd also have to shut that down.
You could embed the information in the pixels of cat pictures and broadcast it via instagram posts.
Unless there exists a global, horrifically authoritarian constriction on the information we are allowed to share, it's not going to happen.
You could broadcast it on any communications medium. You could theoretically run it over a global ham radio mesh network.
Lots of the network is already running on Tor, so you'd also have to shut that down.
You could embed the information in the pixels of cat pictures and broadcast it via instagram posts.
Unless there exists a global, horrifically authoritarian constriction on the information we are allowed to share, it's not going to happen.
That becomes a cat-and-mouse game. See the Great Firewall of China.
All Layer 2 scaling solutions would also be obfuscating transactions because all out of chain transactions are invisible on chain.
Exchanges that delisted privacy coins were not doing so because they were viewed as illegal. Those businesses just didn't have the risk profile to ever take anything to court to solidify the obvious reality that they're not illegal. Their relationship with the regulators is too important for them.
Fortunately, CeFi exchanges are less of the volume these days than DeFi and institutional OTC. When I was using institutional OTC in the United States, they would make markets for me in Monero if I asked. If I said "I want to trade this random erc20 altcoin for Monero" they'd say "say less, we got you", and quote me a very competitive price. Same for moving dollars in and out.
But I've been using DeFi AMMs all year.
The DeFi bridges for bitcoin are fine as well. There are only 1 or 2 permissionless ones for Bitcoin itself, for now, but they're okay. Moving a few billion in volume already this year. The permissioned ones operate under the same risk profile and regulatory profile as exchanges do, so its not a deal breaker if you already use CeFi, and the user experience on any bridge can still be better - depending on what you want to do.
Even Monero has a permissionless bridge too now, on the Secret Network. so you don't even need any exchanges or those sketchy centralized swapping services to move in and out of Monero anymore, and from Secret Network you can bridge to the broader DeFi ecosystem.
This should get even better.
Fortunately, CeFi exchanges are less of the volume these days than DeFi and institutional OTC. When I was using institutional OTC in the United States, they would make markets for me in Monero if I asked. If I said "I want to trade this random erc20 altcoin for Monero" they'd say "say less, we got you", and quote me a very competitive price. Same for moving dollars in and out.
But I've been using DeFi AMMs all year.
The DeFi bridges for bitcoin are fine as well. There are only 1 or 2 permissionless ones for Bitcoin itself, for now, but they're okay. Moving a few billion in volume already this year. The permissioned ones operate under the same risk profile and regulatory profile as exchanges do, so its not a deal breaker if you already use CeFi, and the user experience on any bridge can still be better - depending on what you want to do.
Even Monero has a permissionless bridge too now, on the Secret Network. so you don't even need any exchanges or those sketchy centralized swapping services to move in and out of Monero anymore, and from Secret Network you can bridge to the broader DeFi ecosystem.
This should get even better.
Why are you posting a disinfo blog on HN? This same blog pushes the lie that Craig Wright is actually Satoshi.
Does Taproot do anything to reduce the absurd power consumption? If not then it just feels as useful as rearranging deck chairs on the Titanic to me.
No. How the space on the block chain is used doesn't really factor into that.
The ceiling for the power usage of bitcoin can be estimated by taking the value of the bitcoin that is mined in total each hour (say 6 blocks/hour * 6.25 BTC * 60K $/BTC = 2.25M dollars/hour) and dividing it by the cost of electricity (e.g. (2.25M $/hour) / 0.05 $/kWh = 45 gigawatt). As long as miners are using less electricity than that, they can make more profit by expanding their operations.
(It's a bit more complicated because of capital costs and operational costs other than electricity etc. but I think it's a good rough estimate to start with.)
The ceiling for the power usage of bitcoin can be estimated by taking the value of the bitcoin that is mined in total each hour (say 6 blocks/hour * 6.25 BTC * 60K $/BTC = 2.25M dollars/hour) and dividing it by the cost of electricity (e.g. (2.25M $/hour) / 0.05 $/kWh = 45 gigawatt). As long as miners are using less electricity than that, they can make more profit by expanding their operations.
(It's a bit more complicated because of capital costs and operational costs other than electricity etc. but I think it's a good rough estimate to start with.)
Bitcoins biggest innovation is moving transactions off of bitcoin. That tells you all about it's capabilities really.
Why bother with this outdated tech when there are vastly more capable coins out there?
Because there are still more people to dupe into buying ASIC miners, as well as many more who haven't broken even yet. Can't you see what's at stake?!
Oh i thought the main motivation was to get more people to buy the coin to raise its price.
Oh it is, but Bitcoin could be as nimble as its competition if it didn't have the sha256-must-stay-relevant-or-miners-will-riot constraint.
Yes it does, the byte size of transaction processing is smaller, and additionally many more transactions can be batched together when processing happens due to the more efficient algorithm.
Bitcoin's power consumption is not absurd -- proof of work is a method of converting power to security. It uses far less energy than the legacy banking system, which is enforced by trillions of dollars of military expenditures and banking employees burning fossil fuels instead of a comparatively tiny amount of electricity.
When we finally phase out the legacy banking system completely for cryptocurrency, it will represent a drastic reduction in finance-related energy consumption worldwide.
When we finally phase out the legacy banking system completely for cryptocurrency, it will represent a drastic reduction in finance-related energy consumption worldwide.
> It uses far less energy than the legacy banking system
False equivalence. It supports several orders of magnitude fewer transactions and throughput.
>When we finally phase out the legacy banking system completely for cryptocurrency
This will never happen.
>it will represent a drastic reduction in finance-related energy consumption worldwide
Assuming this hypothetical, prove it. Explain mathematically how proof of work supporting global finance levels of transactions would result in a net reduction in energy consumption.
False equivalence. It supports several orders of magnitude fewer transactions and throughput.
>When we finally phase out the legacy banking system completely for cryptocurrency
This will never happen.
>it will represent a drastic reduction in finance-related energy consumption worldwide
Assuming this hypothetical, prove it. Explain mathematically how proof of work supporting global finance levels of transactions would result in a net reduction in energy consumption.
> converting power to security
What the hell does this even mean?
Quantum computers will eventually rip this stuff apart. And the reason folks won't be able to do the same to US banks and institutions using QC? The military and NSA will hunt you down.
What the hell does this even mean?
Quantum computers will eventually rip this stuff apart. And the reason folks won't be able to do the same to US banks and institutions using QC? The military and NSA will hunt you down.
The prize money flowing to miners doesn’t change so energy usage won’t change. (You can think of this as fixed overhead that’s proportional to Bitcoin’s price, regardless of what transactions do.)
However, the transactions do more so arguably the cost/benefit ratio improves a bit. Measuring this might be hard without a clear definition of what the benefit of a transaction is.
However, the transactions do more so arguably the cost/benefit ratio improves a bit. Measuring this might be hard without a clear definition of what the benefit of a transaction is.
[deleted]
> absurd power consumption
lol.
lol.
Shhh.. Just keep looking at only the positives and the future, no time for criticism and addressing the known pitfalls!
I am pretty sure that this upgrade was the piece needed to "more legitimately decentralize" the currency bridge between Bitcoin and rsk (rootstalk), which is the EVM-compatible smart contract layer that uses Bitcoin (bridged as rBTC) as its native gas currency (and which is being "merge mined" by a majority of the current Bitcoin hash rate and thereby isn't some weird insecure underutilized side chain).
Typo: RSK was Rootstock: https://www.rsk.co/ and has a governing organization: https://www.iovlabs.org/
I don't think the energy criticisms are that warranted.
In my mind, it speaks more to a criticism of how poor our current energy infrastructure is.
I don't think for example in 30 years it'll be a big problem when energy becomes more abundant and building nuclear reactors are easier.
And this is coming from someone who believes Bitcoin is little more than a Ponzi scheme and most of the innovation in fintech is happening outside the cryptocurrency space.
Still, it's pretty cool that changes to Bitcoin can happen like this. Makes me think eventually they'll figure out a use case for it, besides buying lattes in El Salvador.
In my mind, it speaks more to a criticism of how poor our current energy infrastructure is.
I don't think for example in 30 years it'll be a big problem when energy becomes more abundant and building nuclear reactors are easier.
And this is coming from someone who believes Bitcoin is little more than a Ponzi scheme and most of the innovation in fintech is happening outside the cryptocurrency space.
Still, it's pretty cool that changes to Bitcoin can happen like this. Makes me think eventually they'll figure out a use case for it, besides buying lattes in El Salvador.
But isn't the security of proof-of-work derived from it being cost prohibitive to put up more work on a fraudulent (e.g. double spending) chain? So if energy becomes an order of magnitude more abundant or cheaper, doesn't that just mean that the amount of energy spent on mining will increase by the same amount?
Correct. Bitcoin's "difficulty" parameter will tend to increase as cheaper energy costs allow the total mining network hash rate to increase.
It does seem strange, because while I'm not too familiar with the PoW pro/cons arguments (I heard PoW was more secure than any other method, for now, but haven't verified that independently), it rubs me the wrong way to classify certain uses of electricity as "illegitimate". Some people prefer taking the plane over the train, should they be vilified? Some people like "driving around" to chill, not because they have a true transportation need. The offices near me are all lit up throughout the night. I wouldn't be surprised if when aggregated on a world level, there was a relatively significant percentage of energy just plain wasted. When AR/VR come out, hoping to replace zero-carbon-emitting IRL social interactions with heavy GPU/server-using gadgets, will people condemn that? I don't like the idea of piecemeal "bean counter" approach to new technology that happens to use energy; if there's zero point to PoW, they have a point, but if there are any security or decentralization benefits at all, it just seems like a non-problem. Treat it as a systemic problem, transition energy-use objects to electricity-use objects (like EVs), build more nuclear reactors, generate more clean-electricity, and have it not be an issue.
The "Bitcoin is destroying the world ecosystem and is awful" crowd is way too hysterical for me to take them seriously. They write about Bitcoin like it is a serious evil and injustice in the world. It honestly feels like they're just folks who regret not investing in Bitcoin.
Your comment doesn't really explain why the criticism isn't warranted. What does this have to do with how poor the current energy infrastructure is?
I think they're warranted. I don't believe they're that warranted because I believe energy abundance will become more efficient over time. I don't believe it's a permanent problem, although obviously if the Bitcoin people can figure out a way to make it less power-hungry while still being secure, that's a win for everybody.
So just to be clear. It's a criticism that I agree with, but I don't think it's as debilitating as a problem as most people believe.
So just to be clear. It's a criticism that I agree with, but I don't think it's as debilitating as a problem as most people believe.
Proof of work is inherently going to trend towards more power use. I’m not sure why you don’t think it’s as “debilitating as a problem as most people believe.”