What is Bitcoin mining? [Everything you need to know]

I am currently an investment manager at Blockchain mining pool alias "Blockchain mining network", we have been able to attract a lot of investors into our mining pool. I can teach you how to mine bitcoins and earn 70% in btc within 25 hours of mining. /r/Bitcoin

I am currently an investment manager at Blockchain mining pool alias submitted by ABitcoinAllBot to BitcoinAll [link] [comments]

04-15 16:32 - 'I am currently an investment manager at Blockchain mining pool alias "Blockchain mining network", we have been able to attract a lot of investors into our mining pool. I can teach you how to mine bitcoins and ea...' (v.redd.it) by /u/sarah-abdul removed from /r/Bitcoin within 48-58min

I am currently an investment manager at Blockchain mining pool alias "Blockchain mining network", we have been able to attract a lot of investors into our mining pool. I can teach you how to mine bitcoins and earn 70% in btc within 25 hours of mining.
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Author: sarah-abdul
submitted by removalbot to removalbot [link] [comments]

Hypothetical: At this point it is almost impossible to mine Bitcoin which means there are a lot of buyers.How many years will it take for this to happen to Dogecoin?

For example: Mining dogecoin on a Laptop is not unheard of and you can earn 1 doge within a reasonable amount of time. But with Bitcoin it would take a few years which leads to a ton of buyers on the Bitcoin Market. Mining bitcoin with a decent mining build is even a hassle. So I want to know how long it will take before the Dogecoin just becomes too hard to mine and people will resort to buying them instead.
submitted by ZIIReactionzV to dogecoin [link] [comments]

Technical: The Path to Taproot Activation

Taproot! Everybody wants to have it, somebody wants to make it, nobody knows how to get it!
(If you are asking why everybody wants it, see: Technical: Taproot: Why Activate?)
(Pedants: I mostly elide over lockin times)
Briefly, Taproot is that neat new thing that gets us:
So yes, let's activate taproot!

The SegWit Wars

The biggest problem with activating Taproot is PTSD from the previous softfork, SegWit. Pieter Wuille, one of the authors of the current Taproot proposal, has consistently held the position that he will not discuss activation, and will accept whatever activation process is imposed on Taproot. Other developers have expressed similar opinions.
So what happened with SegWit activation that was so traumatic? SegWit used the BIP9 activation method. Let's dive into BIP9!

BIP9 Miner-Activated Soft Fork

Basically, BIP9 has a bunch of parameters:
Now there are other parameters (name, starttime) but they are not anywhere near as important as the above two.
A number that is not a parameter, is 95%. Basically, activation of a BIP9 softfork is considered as actually succeeding if at least 95% of blocks in the last 2 weeks had the specified bit in the nVersion set. If less than 95% had this bit set before the timeout, then the upgrade fails and never goes into the network. This is not a parameter: it is a constant defined by BIP9, and developers using BIP9 activation cannot change this.
So, first some simple questions and their answers:

The Great Battles of the SegWit Wars

SegWit not only fixed transaction malleability, it also created a practical softforkable blocksize increase that also rebalanced weights so that the cost of spending a UTXO is about the same as the cost of creating UTXOs (and spending UTXOs is "better" since it limits the size of the UTXO set that every fullnode has to maintain).
So SegWit was written, the activation was decided to be BIP9, and then.... miner signalling stalled at below 75%.
Thus were the Great SegWit Wars started.

BIP9 Feature Hostage

If you are a miner with at least 5% global hashpower, you can hold a BIP9-activated softfork hostage.
You might even secretly want the softfork to actually push through. But you might want to extract concession from the users and the developers. Like removing the halvening. Or raising or even removing the block size caps (which helps larger miners more than smaller miners, making it easier to become a bigger fish that eats all the smaller fishes). Or whatever.
With BIP9, you can hold the softfork hostage. You just hold out and refuse to signal. You tell everyone you will signal, if and only if certain concessions are given to you.
This ability by miners to hold a feature hostage was enabled because of the miner-exit allowed by the timeout on BIP9. Prior to that, miners were considered little more than expendable security guards, paid for the risk they take to secure the network, but not special in the grand scheme of Bitcoin.

Covert ASICBoost

ASICBoost was a novel way of optimizing SHA256 mining, by taking advantage of the structure of the 80-byte header that is hashed in order to perform proof-of-work. The details of ASICBoost are out-of-scope here but you can read about it elsewhere
Here is a short summary of the two types of ASICBoost, relevant to the activation discussion.
Now, "overt" means "obvious", while "covert" means hidden. Overt ASICBoost is obvious because nVersion bits that are not currently in use for BIP9 activations are usually 0 by default, so setting those bits to 1 makes it obvious that you are doing something weird (namely, Overt ASICBoost). Covert ASICBoost is non-obvious because the order of transactions in a block are up to the miner anyway, so the miner rearranging the transactions in order to get lower power consumption is not going to be detected.
Unfortunately, while Overt ASICBoost was compatible with SegWit, Covert ASICBoost was not. This is because, pre-SegWit, only the block header Merkle tree committed to the transaction ordering. However, with SegWit, another Merkle tree exists, which commits to transaction ordering as well. Covert ASICBoost would require more computation to manipulate two Merkle trees, obviating the power benefits of Covert ASICBoost anyway.
Now, miners want to use ASICBoost (indeed, about 60->70% of current miners probably use the Overt ASICBoost nowadays; if you have a Bitcoin fullnode running you will see the logs with lots of "60 of last 100 blocks had unexpected versions" which is exactly what you would see with the nVersion manipulation that Overt ASICBoost does). But remember: ASICBoost was, at around the time, a novel improvement. Not all miners had ASICBoost hardware. Those who did, did not want it known that they had ASICBoost hardware, and wanted to do Covert ASICBoost!
But Covert ASICBoost is incompatible with SegWit, because SegWit actually has two Merkle trees of transaction data, and Covert ASICBoost works by fudging around with transaction ordering in a block, and recomputing two Merkle Trees is more expensive than recomputing just one (and loses the ASICBoost advantage).
Of course, those miners that wanted Covert ASICBoost did not want to openly admit that they had ASICBoost hardware, they wanted to keep their advantage secret because miners are strongly competitive in a very tight market. And doing ASICBoost Covertly was just the ticket, but they could not work post-SegWit.
Fortunately, due to the BIP9 activation process, they could hold SegWit hostage while covertly taking advantage of Covert ASICBoost!

UASF: BIP148 and BIP8

When the incompatibility between Covert ASICBoost and SegWit was realized, still, activation of SegWit stalled, and miners were still not openly claiming that ASICBoost was related to non-activation of SegWit.
Eventually, a new proposal was created: BIP148. With this rule, 3 months before the end of the SegWit timeout, nodes would reject blocks that did not signal SegWit. Thus, 3 months before SegWit timeout, BIP148 would force activation of SegWit.
This proposal was not accepted by Bitcoin Core, due to the shortening of the timeout (it effectively times out 3 months before the initial SegWit timeout). Instead, a fork of Bitcoin Core was created which added the patch to comply with BIP148. This was claimed as a User Activated Soft Fork, UASF, since users could freely download the alternate fork rather than sticking with the developers of Bitcoin Core.
Now, BIP148 effectively is just a BIP9 activation, except at its (earlier) timeout, the new rules would be activated anyway (instead of the BIP9-mandated behavior that the upgrade is cancelled at the end of the timeout).
BIP148 was actually inspired by the BIP8 proposal (the link here is a historical version; BIP8 has been updated recently, precisely in preparation for Taproot activation). BIP8 is basically BIP9, but at the end of timeout, the softfork is activated anyway rather than cancelled.
This removed the ability of miners to hold the softfork hostage. At best, they can delay the activation, but not stop it entirely by holding out as in BIP9.
Of course, this implies risk that not all miners have upgraded before activation, leading to possible losses for SPV users, as well as again re-pressuring miners to signal activation, possibly without the miners actually upgrading their software to properly impose the new softfork rules.

BIP91, SegWit2X, and The Aftermath

BIP148 inspired countermeasures, possibly from the Covert ASiCBoost miners, possibly from concerned users who wanted to offer concessions to miners. To this day, the common name for BIP148 - UASF - remains an emotionally-charged rallying cry for parts of the Bitcoin community.
One of these was SegWit2X. This was brokered in a deal between some Bitcoin personalities at a conference in New York, and thus part of the so-called "New York Agreement" or NYA, another emotionally-charged acronym.
The text of the NYA was basically:
  1. Set up a new activation threshold at 80% signalled at bit 4 (vs bit 1 for SegWit).
    • When this 80% signalling was reached, miners would require that bit 1 for SegWit be signalled to achive the 95% activation needed for SegWit.
  2. If the bit 4 signalling reached 80%, increase the block weight limit from the SegWit 4000000 to the SegWit2X 8000000, 6 months after bit 1 activation.
The first item above was coded in BIP91.
Unfortunately, if you read the BIP91, independently of NYA, you might come to the conclusion that BIP91 was only about lowering the threshold to 80%. In particular, BIP91 never mentions anything about the second point above, it never mentions that bit 4 80% threshold would also signal for a later hardfork increase in weight limit.
Because of this, even though there are claims that NYA (SegWit2X) reached 80% dominance, a close reading of BIP91 shows that the 80% dominance was only for SegWit activation, without necessarily a later 2x capacity hardfork (SegWit2X).
This ambiguity of bit 4 (NYA says it includes a 2x capacity hardfork, BIP91 says it does not) has continued to be a thorn in blocksize debates later. Economically speaking, Bitcoin futures between SegWit and SegWit2X showed strong economic dominance in favor of SegWit (SegWit2X futures were traded at a fraction in value of SegWit futures: I personally made a tidy but small amount of money betting against SegWit2X in the futures market), so suggesting that NYA achieved 80% dominance even in mining is laughable, but the NYA text that ties bit 4 to SegWit2X still exists.
Historically, BIP91 triggered which caused SegWit to activate before the BIP148 shorter timeout. BIP148 proponents continue to hold this day that it was the BIP148 shorter timeout and no-compromises-activate-on-August-1 that made miners flock to BIP91 as a face-saving tactic that actually removed the second clause of NYA. NYA supporters keep pointing to the bit 4 text in the NYA and the historical activation of BIP91 as a failed promise by Bitcoin developers.

Taproot Activation Proposals

There are two primary proposals I can see for Taproot activation:
  1. BIP8.
  2. Modern Softfork Activation.
We have discussed BIP8: roughly, it has bit and timeout, if 95% of miners signal bit it activates, at the end of timeout it activates. (EDIT: BIP8 has had recent updates: at the end of timeout it can now activate or fail. For the most part, in the below text "BIP8", means BIP8-and-activate-at-timeout, and "BIP9" means BIP8-and-fail-at-timeout)
So let's take a look at Modern Softfork Activation!

Modern Softfork Activation

This is a more complex activation method, composed of BIP9 and BIP8 as supcomponents.
  1. First have a 12-month BIP9 (fail at timeout).
  2. If the above fails to activate, have a 6-month discussion period during which users and developers and miners discuss whether to continue to step 3.
  3. Have a 24-month BIP8 (activate at timeout).
The total above is 42 months, if you are counting: 3.5 years worst-case activation.
The logic here is that if there are no problems, BIP9 will work just fine anyway. And if there are problems, the 6-month period should weed it out. Finally, miners cannot hold the feature hostage since the 24-month BIP8 period will exist anyway.

PSA: Being Resilient to Upgrades

Software is very birttle.
Anyone who has been using software for a long time has experienced something like this:
  1. You hear a new version of your favorite software has a nice new feature.
  2. Excited, you install the new version.
  3. You find that the new version has subtle incompatibilities with your current workflow.
  4. You are sad and downgrade to the older version.
  5. You find out that the new version has changed your files in incompatible ways that the old version cannot work with anymore.
  6. You tearfully reinstall the newer version and figure out how to get your lost productivity now that you have to adapt to a new workflow
If you are a technically-competent user, you might codify your workflow into a bunch of programs. And then you upgrade one of the external pieces of software you are using, and find that it has a subtle incompatibility with your current workflow which is based on a bunch of simple programs you wrote yourself. And if those simple programs are used as the basis of some important production system, you hve just screwed up because you upgraded software on an important production system.
And well, one of the issues with new softfork activation is that if not enough people (users and miners) upgrade to the newest Bitcoin software, the security of the new softfork rules are at risk.
Upgrading software of any kind is always a risk, and the more software you build on top of the software-being-upgraded, the greater you risk your tower of software collapsing while you change its foundations.
So if you have some complex Bitcoin-manipulating system with Bitcoin somewhere at the foundations, consider running two Bitcoin nodes:
  1. One is a "stable-version" Bitcoin node. Once it has synced, set it up to connect=x.x.x.x to the second node below (so that your ISP bandwidth is only spent on the second node). Use this node to run all your software: it's a stable version that you don't change for long periods of time. Enable txiindex, disable pruning, whatever your software needs.
  2. The other is an "always-up-to-date" Bitcoin Node. Keep its stoarge down with pruning (initially sync it off the "stable-version" node). You can't use blocksonly if your "stable-version" node needs to send transactions, but otherwise this "always-up-to-date" Bitcoin node can be kept as a low-resource node, so you can run both nodes in the same machine.
When a new Bitcoin version comes up, you just upgrade the "always-up-to-date" Bitcoin node. This protects you if a future softfork activates, you will only receive valid Bitcoin blocks and transactions. Since this node has nothing running on top of it, it is just a special peer of the "stable-version" node, any software incompatibilities with your system software do not exist.
Your "stable-version" Bitcoin node remains the same version until you are ready to actually upgrade this node and are prepared to rewrite most of the software you have running on top of it due to version compatibility problems.
When upgrading the "always-up-to-date", you can bring it down safely and then start it later. Your "stable-version" wil keep running, disconnected from the network, but otherwise still available for whatever queries. You do need some system to stop the "always-up-to-date" node if for any reason the "stable-version" goes down (otherwisee if the "always-up-to-date" advances its pruning window past what your "stable-version" has, the "stable-version" cannot sync afterwards), but if you are technically competent enough that you need to do this, you are technically competent enough to write such a trivial monitor program (EDIT: gmax notes you can adjust the pruning window by RPC commands to help with this as well).
This recommendation is from gmaxwell on IRC, by the way.
submitted by almkglor to Bitcoin [link] [comments]

Technical: Taproot: Why Activate?

This is a follow-up on https://old.reddit.com/Bitcoin/comments/hqzp14/technical_the_path_to_taproot_activation/
Taproot! Everybody wants it!! But... you might ask yourself: sure, everybody else wants it, but why would I, sovereign Bitcoin HODLer, want it? Surely I can be better than everybody else because I swapped XXX fiat for Bitcoin unlike all those nocoiners?
And it is important for you to know the reasons why you, o sovereign Bitcoiner, would want Taproot activated. After all, your nodes (or the nodes your wallets use, which if you are SPV, you hopefully can pester to your wallet vendoimplementor about) need to be upgraded in order for Taproot activation to actually succeed instead of becoming a hot sticky mess.
First, let's consider some principles of Bitcoin.
I'm sure most of us here would agree that the above are very important principles of Bitcoin and that these are principles we would not be willing to remove. If anything, we would want those principles strengthened (especially the last one, financial privacy, which current Bitcoin is only sporadically strong with: you can get privacy, it just requires effort to do so).
So, how does Taproot affect those principles?

Taproot and Your /Coins

Most HODLers probably HODL their coins in singlesig addresses. Sadly, switching to Taproot would do very little for you (it gives a mild discount at spend time, at the cost of a mild increase in fee at receive time (paid by whoever sends to you, so if it's a self-send from a P2PKH or bech32 address, you pay for this); mostly a wash).
(technical details: a Taproot output is 1 version byte + 32 byte public key, while a P2WPKH (bech32 singlesig) output is 1 version byte + 20 byte public key hash, so the Taproot output spends 12 bytes more; spending from a P2WPKH requires revealing a 32-byte public key later, which is not needed with Taproot, and Taproot signatures are about 9 bytes smaller than P2WPKH signatures, but the 32 bytes plus 9 bytes is divided by 4 because of the witness discount, so it saves about 11 bytes; mostly a wash, it increases blockweight by about 1 virtual byte, 4 weight for each Taproot-output-input, compared to P2WPKH-output-input).
However, as your HODLings grow in value, you might start wondering if multisignature k-of-n setups might be better for the security of your savings. And it is in multisignature that Taproot starts to give benefits!
Taproot switches to using Schnorr signing scheme. Schnorr makes key aggregation -- constructing a single public key from multiple public keys -- almost as trivial as adding numbers together. "Almost" because it involves some fairly advanced math instead of simple boring number adding, but hey when was the last time you added up your grocery list prices by hand huh?
With current P2SH and P2WSH multisignature schemes, if you have a 2-of-3 setup, then to spend, you need to provide two different signatures from two different public keys. With Taproot, you can create, using special moon math, a single public key that represents your 2-of-3 setup. Then you just put two of your devices together, have them communicate to each other (this can be done airgapped, in theory, by sending QR codes: the software to do this is not even being built yet, but that's because Taproot hasn't activated yet!), and they will make a single signature to authorize any spend from your 2-of-3 address. That's 73 witness bytes -- 18.25 virtual bytes -- of signatures you save!
And if you decide that your current setup with 1-of-1 P2PKH / P2WPKH addresses is just fine as-is: well, that's the whole point of a softfork: backwards-compatibility; you can receive from Taproot users just fine, and once your wallet is updated for Taproot-sending support, you can send to Taproot users just fine as well!
(P2WPKH and P2WSH -- SegWit v0 -- addresses start with bc1q; Taproot -- SegWit v1 --- addresses start with bc1p, in case you wanted to know the difference; in bech32 q is 0, p is 1)
Now how about HODLers who keep all, or some, of their coins on custodial services? Well, any custodial service worth its salt would be doing at least 2-of-3, or probably something even bigger, like 11-of-15. So your custodial service, if it switched to using Taproot internally, could save a lot more (imagine an 11-of-15 getting reduced from 11 signatures to just 1!), which --- we can only hope! --- should translate to lower fees and better customer service from your custodial service!
So I think we can say, very accurately, that the Bitcoin principle --- that YOU are in control of your money --- can only be helped by Taproot (if you are doing multisignature), and, because P2PKH and P2WPKH remain validly-usable addresses in a Taproot future, will not be harmed by Taproot. Its benefit to this principle might be small (it mostly only benefits multisignature users) but since it has no drawbacks with this (i.e. singlesig users can continue to use P2WPKH and P2PKH still) this is still a nice, tidy win!
(even singlesig users get a minor benefit, in that multisig users will now reduce their blockchain space footprint, so that fees can be kept low for everybody; so for example even if you have your single set of private keys engraved on titanium plates sealed in an airtight box stored in a safe buried in a desert protected by angry nomads riding giant sandworms because you're the frickin' Kwisatz Haderach, you still gain some benefit from Taproot)
And here's the important part: if P2PKH/P2WPKH is working perfectly fine with you and you decide to never use Taproot yourself, Taproot will not affect you detrimentally. First do no harm!

Taproot and Your Contracts

No one is an island, no one lives alone. Give and you shall receive. You know: by trading with other people, you can gain expertise in some obscure little necessity of the world (and greatly increase your productivity in that little field), and then trade the products of your expertise for necessities other people have created, all of you thereby gaining gains from trade.
So, contracts, which are basically enforceable agreements that facilitate trading with people who you do not personally know and therefore might not trust.
Let's start with a simple example. You want to buy some gewgaws from somebody. But you don't know them personally. The seller wants the money, you want their gewgaws, but because of the lack of trust (you don't know them!! what if they're scammers??) neither of you can benefit from gains from trade.
However, suppose both of you know of some entity that both of you trust. That entity can act as a trusted escrow. The entity provides you security: this enables the trade, allowing both of you to get gains from trade.
In Bitcoin-land, this can be implemented as a 2-of-3 multisignature. The three signatories in the multisgnature would be you, the gewgaw seller, and the escrow. You put the payment for the gewgaws into this 2-of-3 multisignature address.
Now, suppose it turns out neither of you are scammers (whaaaat!). You receive the gewgaws just fine and you're willing to pay up for them. Then you and the gewgaw seller just sign a transaction --- you and the gewgaw seller are 2, sufficient to trigger the 2-of-3 --- that spends from the 2-of-3 address to a singlesig the gewgaw seller wants (or whatever address the gewgaw seller wants).
But suppose some problem arises. The seller gave you gawgews instead of gewgaws. Or you decided to keep the gewgaws but not sign the transaction to release the funds to the seller. In either case, the escrow is notified, and if it can sign with you to refund the funds back to you (if the seller was a scammer) or it can sign with the seller to forward the funds to the seller (if you were a scammer).
Taproot helps with this: like mentioned above, it allows multisignature setups to produce only one signature, reducing blockchain space usage, and thus making contracts --- which require multiple people, by definition, you don't make contracts with yourself --- is made cheaper (which we hope enables more of these setups to happen for more gains from trade for everyone, also, moon and lambos).
(technology-wise, it's easier to make an n-of-n than a k-of-n, making a k-of-n would require a complex setup involving a long ritual with many communication rounds between the n participants, but an n-of-n can be done trivially with some moon math. You can, however, make what is effectively a 2-of-3 by using a three-branch SCRIPT: either 2-of-2 of you and seller, OR 2-of-2 of you and escrow, OR 2-of-2 of escrow and seller. Fortunately, Taproot adds a facility to embed a SCRIPT inside a public key, so you can have a 2-of-2 Taprooted address (between you and seller) with a SCRIPT branch that can instead be spent with 2-of-2 (you + escrow) OR 2-of-2 (seller + escrow), which implements the three-branched SCRIPT above. If neither of you are scammers (hopefully the common case) then you both sign using your keys and never have to contact the escrow, since you are just using the escrow public key without coordinating with them (because n-of-n is trivial but k-of-n requires setup with communication rounds), so in the "best case" where both of you are honest traders, you also get a privacy boost, in that the escrow never learns you have been trading on gewgaws, I mean ewww, gawgews are much better than gewgaws and therefore I now judge you for being a gewgaw enthusiast, you filthy gewgawer).

Taproot and Your Contracts, Part 2: Cryptographic Boogaloo

Now suppose you want to buy some data instead of things. For example, maybe you have some closed-source software in trial mode installed, and want to pay the developer for the full version. You want to pay for an activation code.
This can be done, today, by using an HTLC. The developer tells you the hash of the activation code. You pay to an HTLC, paying out to the developer if it reveals the preimage (the activation code), or refunding the money back to you after a pre-agreed timeout. If the developer claims the funds, it has to reveal the preimage, which is the activation code, and you can now activate your software. If the developer does not claim the funds by the timeout, you get refunded.
And you can do that, with HTLCs, today.
Of course, HTLCs do have problems:
Fortunately, with Schnorr (which is enabled by Taproot), we can now use the Scriptless Script constuction by Andrew Poelstra. This Scriptless Script allows a new construction, the PTLC or Pointlocked Timelocked Contract. Instead of hashes and preimages, just replace "hash" with "point" and "preimage" with "scalar".
Or as you might know them: "point" is really "public key" and "scalar" is really a "private key". What a PTLC does is that, given a particular public key, the pointlocked branch can be spent only if the spender reveals the private key of the given public key to you.
Another nice thing with PTLCs is that they are deniable. What appears onchain is just a single 2-of-2 signature between you and the developemanufacturer. It's like a magic trick. This signature has no special watermarks, it's a perfectly normal signature (the pledge). However, from this signature, plus some datta given to you by the developemanufacturer (known as the adaptor signature) you can derive the private key of a particular public key you both agree on (the turn). Anyone scraping the blockchain will just see signatures that look just like every other signature, and as long as nobody manages to hack you and get a copy of the adaptor signature or the private key, they cannot get the private key behind the public key (point) that the pointlocked branch needs (the prestige).
(Just to be clear, the public key you are getting the private key from, is distinct from the public key that the developemanufacturer will use for its funds. The activation key is different from the developer's onchain Bitcoin key, and it is the activation key whose private key you will be learning, not the developer's/manufacturer's onchain Bitcoin key).
So:
Taproot lets PTLCs exist onchain because they enable Schnorr, which is a requirement of PTLCs / Scriptless Script.
(technology-wise, take note that Scriptless Script works only for the "pointlocked" branch of the contract; you need normal Script, or a pre-signed nLockTimed transaction, for the "timelocked" branch. Since Taproot can embed a script, you can have the Taproot pubkey be a 2-of-2 to implement the Scriptless Script "pointlocked" branch, then have a hidden script that lets you recover the funds with an OP_CHECKLOCKTIMEVERIFY after the timeout if the seller does not claim the funds.)

Quantum Quibbles!

Now if you were really paying attention, you might have noticed this parenthetical:
(technical details: a Taproot output is 1 version byte + 32 byte public key, while a P2WPKH (bech32 singlesig) output is 1 version byte + 20 byte public key hash...)
So wait, Taproot uses raw 32-byte public keys, and not public key hashes? Isn't that more quantum-vulnerable??
Well, in theory yes. In practice, they probably are not.
It's not that hashes can be broken by quantum computes --- they're still not. Instead, you have to look at how you spend from a P2WPKH/P2PKH pay-to-public-key-hash.
When you spend from a P2PKH / P2WPKH, you have to reveal the public key. Then Bitcoin hashes it and checks if this matches with the public-key-hash, and only then actually validates the signature for that public key.
So an unconfirmed transaction, floating in the mempools of nodes globally, will show, in plain sight for everyone to see, your public key.
(public keys should be public, that's why they're called public keys, LOL)
And if quantum computers are fast enough to be of concern, then they are probably fast enough that, in the several minutes to several hours from broadcast to confirmation, they have already cracked the public key that is openly broadcast with your transaction. The owner of the quantum computer can now replace your unconfirmed transaction with one that pays the funds to itself. Even if you did not opt-in RBF, miners are still incentivized to support RBF on RBF-disabled transactions.
So the extra hash is not as significant a protection against quantum computers as you might think. Instead, the extra hash-and-compare needed is just extra validation effort.
Further, if you have ever, in the past, spent from the address, then there exists already a transaction indelibly stored on the blockchain, openly displaying the public key from which quantum computers can derive the private key. So those are still vulnerable to quantum computers.
For the most part, the cryptographers behind Taproot (and Bitcoin Core) are of the opinion that quantum computers capable of cracking Bitcoin pubkeys are unlikely to appear within a decade or two.
So:
For now, the homomorphic and linear properties of elliptic curve cryptography provide a lot of benefits --- particularly the linearity property is what enables Scriptless Script and simple multisignature (i.e. multisignatures that are just 1 signature onchain). So it might be a good idea to take advantage of them now while we are still fairly safe against quantum computers. It seems likely that quantum-safe signature schemes are nonlinear (thus losing these advantages).

Summary

I Wanna Be The Taprooter!

So, do you want to help activate Taproot? Here's what you, mister sovereign Bitcoin HODLer, can do!

But I Hate Taproot!!

That's fine!

Discussions About Taproot Activation

submitted by almkglor to Bitcoin [link] [comments]

I built a decentralized legal-binding smart contract system. I need peer reviewers and whitepaper proof readers. Help greatly appreciated!

I posted this on /cryptotechnology . It attracted quite a bit of upvotes but not many potential contributors. Someone mentioned I should try this sub. I read the rules and it seems to fit within them. Hope this kind of post is alright here...
EDIT: My mother language is french (I'm from Montreal/Canada). Please excuse any blatant grammatical errors.
TLDR: I built a decentralized legal-binding smart contract system. I need peer reviewers and whitepaper proof readers. If you're interested, send me an email to discuss: [email protected] . Thanks in advance!
Hi guys,
For the last few years, I've been working on a decentralized legal-binding contract system. Basically, I created a PoW blockchain software that can receive a hash as an address, and another hash as a bucket, in each transaction.
The address hash is used to tell a specific entity (application/contract/company/person, etc) that uses the blockchain that this transaction might be addressed to them. The bucket hash simply tells the nodes which hashtree of files they need to download in order to execute that contract.
The buckets are shared within the network of nodes. Someone could, for example, write a contract with a series of nodes in order to host their data for them. Buckets can hold any kind of data, and can be of any size... including encrypted data.
The blockchain's blocks are chained together using a mining system similar to bitcoin (hashcash algorithm). Each block contains transactions. The requested difficulty increases when the amount of transactions in a block increases, linearly. Then, when a block is mined properly, another smaller mining effort is requested to link the block to the network's head block.
To replace a block, you need to create another block with more transactions than the amount that were transacted in and after the mined block.
I expect current payment processors to begin accepting transactions and mine them for their customers and make money with fees, in parallel. Using such a mechanism, miners will need to have a lot of bandwidth available in order to keep downloading the blocks of other miners, just like the current payment processors.
The contracts is code written in our custom programming language. Their code is pushed using a transaction, and hosted in buckets. Like you can see, the contract's data are off-chain, only its bucket hash is on-chain. The contract can be used to listen to events that occurs on the blockchain, in any buckets hosted by nodes or on any website that can be crawled and parsed in the contract.
There is also an identity system and a vouching system...which enable the creation of soft-money (promise of future payment in hard money (our cryptocurrency) if a series of events arrive).
The contracts can also be compiled to a legal-binding framework and be potentially be used in court. The contracts currently compile to english and french only.
I also built a browser that contains a 3D viewport, using OpenGL. The browser contains a domain name system (DNS) in form of contracts. Anyone can buy a new domain by creating a transaction with a bucket that contains code to reserve a specific name. When a user request a domain name, it discovers the bucket that is attached to the domain, download that bucket and executes its scripts... which renders in the 3D viewport.
When people interact with an application, the application can create contracts on behalf of the user and send them to the blockchain via a transaction. This enables normal users (non-developers) to interact with others using legal contracts, by using a GUI software.
The hard money (cryptocurrency) is all pre-mined and will be sold to entities (people/company) that want to use the network. The hard money can be re-sold using the contract proposition system, for payment in cash or a bank transfer. The fiat funds will go to my company in order to create services that use this specific network of contracts. The goal is to use the funds to make the network grow and increase its demand in hard money. For now, we plan to create:
A logistic and transportation company
A delivery company
A company that buy and sell real estate options
A company that manage real estate
A software development company
A world-wide fiat money transfer company
A payment processor company
We chose these niche because our team has a lot of experience in these areas: we currently run companies in these fields. These niche also generate a lot of revenue and expenses, making the value of exchanges high. We expect this to drive volume in contracts, soft-money and hard-money exchanges.
We also plan to use the funds to create a venture capital fund that invests in startups that wants to create contracts on our network to execute a specific service in a specific niche.
I'm about to release the software open source very soon and begin executing our commercial activities on the network. Before launching, I'd like to open a discussion with the community regarding the details of how this software works and how it is explained in the whitepaper.
If you'd like to read the whitepaper and open a discussion with me regarding how things work, please send me an email at [email protected] .
If you have any comment, please comment below and Ill try to answer every question. Please note that before peer-reviewing the software and the whitepaper, I'd like to keep the specific details of the software private, but can discuss the general details. A release date will be given once my work has been peer reviewed.
Thanks all in advance!
P.S: This project is not a competition to bitcoin. My goal with this project is to enable companies to write contracts together, easily follow events that are executed in their contracts, understand what to expect from their partnership and what they need to give in order to receive their share of deals... and sell their contracts that they no longer need to other community members.
Bitcoin already has a network of people that uses it. It has its own value. In fact, I plan to create contracts on our network to exchange value from our network for bitcoin and vice-versa. Same for any commodity and currency that currently exits in this world.
submitted by steve-rodrigue to compsci [link] [comments]

To power BCH mass adoption, we need to be able to handle many more transactions per second reliably than currently. We can achieve this!

Do I believe that we can achieve this goal of becoming the global currency of choice for the many? Off course I do! BCH is doing a really good job already. But countries will never adopt BCH if it cannot handle all the transactions of its citizens.
Currently there are very few developers that can afford to contribute to Bitcoin Cash on a full-time basis.
How can we increase the number of developers working full time on Bitcoin Cash so that we can attain our goal of becoming peer-to-peer cash for the many?
Developers could get funding from companies, but then we risk Blockstream 2.0
Some crypto projects have financed themselves by premining coins but this is not possible with BCH.
They could get funding from BCH investors but would this provide a substantial and reliable sum every month to pay for a team of developers?
Dash uses a system powered by the masternodes, where budgets are set and paid directly from the blockchain. To become a masternode, you have to invest heavily in Dash and also the equipment needed.
The IFP (infrastructure funding proposal) was a possible option but there seems to be opposition to it from some investors and mining pools.
Bitcoin Cash needs a lot of work to fulfill its promise of becoming peer-to-peer cash for the masses and get to No.1
Whilst we are debating, Ethereum is still top dog with many more developers working full time.
How can we surpass Ethereum and all other coins in number of developers working full time on BCH?
submitted by bitcoineo to btc [link] [comments]

Since they're calling for r/btc to be banned...

Maybe it's time to discuss bitcoin's history again. Credit to u/singularity87 for the original post over 3 years ago.

People should get the full story of bitcoin because it is probably one of the strangest of all reddit subs.
bitcoin, the main sub for the bitcoin community is held and run by a person who goes by the pseudonym u/theymos. Theymos not only controls bitcoin, but also bitcoin.org and bitcointalk.com. These are top three communication channels for the bitcoin community, all controlled by just one person.
For most of bitcoin's history this did not create a problem (at least not an obvious one anyway) until around mid 2015. This happened to be around the time a new player appeared on the scene, a for-profit company called Blockstream. Blockstream was made up of/hired many (but not all) of the main bitcoin developers. (To be clear, Blockstream was founded before mid 2015 but did not become publicly active until then). A lot of people, including myself, tried to point out there we're some very serious potential conflicts of interest that could arise when one single company controls most of the main developers for the biggest decentralised and distributed cryptocurrency. There were a lot of unknowns but people seemed to give them the benefit of the doubt because they were apparently about to release some new software called "sidechains" that could offer some benefits to the network.
Not long after Blockstream came on the scene the issue of bitcoin's scalability once again came to forefront of the community. This issue came within the community a number of times since bitcoins inception. Bitcoin, as dictated in the code, cannot handle any more than around 3 transactions per second at the moment. To put that in perspective Paypal handles around 15 transactions per second on average and VISA handles something like 2000 transactions per second. The discussion in the community has been around how best to allow bitcoin to scale to allow a higher number of transactions in a given amount of time. I suggest that if anyone is interested in learning more about this problem from a technical angle, they go to btc and do a search. It's a complex issue but for many who have followed bitcoin for many years, the possible solutions seem relatively obvious. Essentially, currently the limit is put in place in just a few lines of code. This was not originally present when bitcoin was first released. It was in fact put in place afterwards as a measure to stop a bloating attack on the network. Because all bitcoin transactions have to be stored forever on the bitcoin network, someone could theoretically simply transmit a large number of transactions which would have to be stored by the entire network forever. When bitcoin was released, transactions were actually for free as the only people running the network were enthusiasts. In fact a single bitcoin did not even have any specific value so it would be impossible set a fee value. This meant that a malicious person could make the size of the bitcoin ledger grow very rapidly without much/any cost which would stop people from wanting to join the network due to the resource requirements needed to store it, which at the time would have been for very little gain.
Towards the end of the summer last year, this bitcoin scaling debate surfaced again as it was becoming clear that the transaction limit for bitcoin was semi regularly being reached and that it would not be long until it would be regularly hit and the network would become congested. This was a very serious issue for a currency. Bitcoin had made progress over the years to the point of retailers starting to offer it as a payment option. Bitcoin companies like, Microsoft, Paypal, Steam and many more had began to adopt it. If the transaction limit would be constantly maxed out, the network would become unreliable and slow for users. Users and businesses would not be able to make a reliable estimate when their transaction would be confirmed by the network.
Users, developers and businesses (which at the time was pretty much the only real bitcoin subreddit) started to discuss how we should solve the problem bitcoin. There was significant support from the users and businesses behind a simple solution put forward by the developer Gavin Andreesen. Gavin was the lead developer after Satoshi Nakamoto left bitcoin and he left it in his hands. Gavin initially proposed a very simple solution of increasing the limit which was to change the few lines of code to increase the maximum number of transactions that are allowed. For most of bitcoin's history the transaction limit had been set far far higher than the number of transactions that could potentially happen on the network. The concept of increasing the limit one time was based on the fact that history had proven that no issue had been cause by this in the past.
A certain group of bitcoin developers decided that increasing the limit by this amount was too much and that it was dangerous. They said that the increased use of resources that the network would use would create centralisation pressures which could destroy the network. The theory was that a miner of the network with more resources could publish many more transactions than a competing small miner could handle and therefore the network would tend towards few large miners rather than many small miners. The group of developers who supported this theory were all developers who worked for the company Blockstream. The argument from people in support of increasing the transaction capacity by this amount was that there are always inherent centralisation pressure with bitcoin mining. For example miners who can access the cheapest electricity will tend to succeed and that bigger miners will be able to find this cheaper electricity easier. Miners who have access to the most efficient computer chips will tend to succeed and that larger miners are more likely to be able to afford the development of them. The argument from Gavin and other who supported increasing the transaction capacity by this method are essentially there are economies of scale in mining and that these economies have far bigger centralisation pressures than increased resource cost for a larger number of transactions (up to the new limit proposed). For example, at the time the total size of the blockchain was around 50GB. Even for the cost of a 500GB SSD is only $150 and would last a number of years. This is in-comparison to the $100,000's in revenue per day a miner would be making.
Various developers put forth various other proposals, including Gavin Andresen who put forth a more conservative increase that would then continue to increase over time inline with technological improvements. Some of the employees of blockstream also put forth some proposals, but all were so conservative, it would take bitcoin many decades before it could reach a scale of VISA. Even though there was significant support from the community behind Gavin's simple proposal of increasing the limit it was becoming clear certain members of the bitcoin community who were part of Blockstream were starting to become increasingly vitriolic and divisive. Gavin then teamed up with one of the other main bitcoin developers Mike Hearn and released a coded (i.e. working) version of the bitcoin software that would only activate if it was supported by a significant majority of the network. What happened next was where things really started to get weird.
After this free and open source software was released, Theymos, the person who controls all the main communication channels for the bitcoin community implemented a new moderation policy that disallowed any discussion of this new software. Specifically, if people were to discuss this software, their comments would be deleted and ultimately they would be banned temporarily or permanently. This caused chaos within the community as there was very clear support for this software at the time and it seemed our best hope for finally solving the problem and moving on. Instead a censorship campaign was started. At first it 'all' they were doing was banning and removing discussions but after a while it turned into actively manipulating the discussion. For example, if a thread was created where there was positive sentiment for increasing the transaction capacity or being negative about the moderation policies or negative about the actions of certain bitcoin developers, the mods of bitcoin would selectively change the sorting order of threads to 'controversial' so that the most support opinions would be sorted to the bottom of the thread and the most vitriolic would be sorted to the top of the thread. This was initially very transparent as it was possible to see that the most downvoted comments were at the top and some of the most upvoted were at the bottom. So they then implemented hiding the voting scores next to the users name. This made impossible to work out the sentiment of the community and when combined with selectively setting the sorting order to controversial it was possible control what information users were seeing. Also, due to the very very large number of removed comments and users it was becoming obvious the scale of censorship going on. To hide this they implemented code in their CSS for the sub that completely hid comments that they had removed so that the censorship itself was hidden. Anyone in support of scaling bitcoin were removed from the main communication channels. Theymos even proudly announced that he didn't care if he had to remove 90% of the users. He also later acknowledged that he knew he had the ability to block support of this software using the control he had over the communication channels.
While this was all going on, Blockstream and it's employees started lobbying the community by paying for conferences about scaling bitcoin, but with the very very strange rule that no decisions could be made and no complete solutions could be proposed. These conferences were likely strategically (and successfully) created to stunt support for the scaling software Gavin and Mike had released by forcing the community to take a "lets wait and see what comes from the conferences" kind of approach. Since no final solutions were allowed at these conferences, they only served to hinder and splinter the communities efforts to find a solution. As the software Gavin and Mike released called BitcoinXT gained support it started to be attacked. Users of the software were attack by DDOS. Employees of Blockstream were recommending attacks against the software, such as faking support for it, to only then drop support at the last moment to put the network in disarray. Blockstream employees were also publicly talking about suing Gavin and Mike from various different angles simply for releasing this open source software that no one was forced to run. In the end Mike Hearn decided to leave due to the way many members of the bitcoin community had treated him. This was due to the massive disinformation campaign against him on bitcoin. One of the many tactics that are used against anyone who does not support Blockstream and the bitcoin developers who work for them is that you will be targeted in a smear campaign. This has happened to a number of individuals and companies who showed support for scaling bitcoin. Theymos has threatened companies that he will ban any discussion of them on the communication channels he controls (i.e. all the main ones) for simply running software that he disagrees with (i.e. any software that scales bitcoin).
As time passed, more and more proposals were offered, all against the backdrop of ever increasing censorship in the main bitcoin communication channels. It finally come down the smallest and most conservative solution. This solution was much smaller than even the employees of Blockstream had proposed months earlier. As usual there was enormous attacks from all sides and the most vocal opponents were the employees of Blockstream. These attacks still are ongoing today. As this software started to gain support, Blockstream organised more meetings, especially with the biggest bitcoin miners and made a pact with them. They promised that they would release code that would offer an on-chain scaling solution hardfork within about 4 months, but if the miners wanted this they would have to commit to running their software and only their software. The miners agreed and the ended up not running the most conservative proposal possible. This was in February last year. There is no hardfork proposal in sight from the people who agreed to this pact and bitcoin is still stuck with the exact same transaction limit it has had since the limit was put in place about 6 years ago. Gavin has also been publicly smeared by the developers at Blockstream and a plot was made against him to have him removed from the development team. Gavin has now been, for all intents an purposes, expelled from bitcoin development. This has meant that all control of bitcoin development is in the hands of the developers working at Blockstream.
There is a new proposal that offers a market based approach to scaling bitcoin. This essentially lets the market decide. Of course, as usual there has been attacks against it, and verbal attacks from the employees of Blockstream. This has the biggest chance of gaining wide support and solving the problem for good.
To give you an idea of Blockstream; It has hired most of the main and active bitcoin developers and is now synonymous with the "Core" bitcoin development team. They AFAIK no products at all. They have received around $75m in funding. Every single thing they do is supported by theymos. They have started implementing an entirely new economic system for bitcoin against the will of it's users and have blocked any and all attempts to scaling the network in line with the original vision.
Although this comment is ridiculously long, it really only covers the tip of the iceberg. You could write a book on the last two years of bitcoin. The things that have been going on have been mind blowing. One last thing that I think is worth talking about is the u/bashco's claim of vote manipulation.
The users that the video talks about have very very large numbers of downvotes mostly due to them having a very very high chance of being astroturfers. Around about the same time last year when Blockstream came active on the scene every single bitcoin troll disappeared, and I mean literally every single one. In the years before that there were a large number of active anti-bitcoin trolls. They even have an active sub buttcoin. Up until last year you could go down to the bottom of pretty much any thread in bitcoin and see many of the usual trolls who were heavily downvoted for saying something along the lines of "bitcoin is shit", "You guys and your tulips" etc. But suddenly last year they all disappeared. Instead a new type of bitcoin user appeared. Someone who said they were fully in support of bitcoin but they just so happened to support every single thing Blockstream and its employees said and did. They had the exact same tone as the trolls who had disappeared. Their way to talking to people was aggressive, they'd call people names, they had a relatively poor understanding of how bitcoin fundamentally worked. They were extremely argumentative. These users are the majority of the list of that video. When the 10's of thousands of users were censored and expelled from bitcoin they ended up congregating in btc. The strange thing was that the users listed in that video also moved over to btc and spend all day everyday posting troll-like comments and misinformation. Naturally they get heavily downvoted by the real users in btc. They spend their time constantly causing as much drama as possible. At every opportunity they scream about "censorship" in btc while they are happy about the censorship in bitcoin. These people are astroturfers. What someone somewhere worked out, is that all you have to do to take down a community is say that you are on their side. It is an astoundingly effective form of psychological attack.
submitted by CuriousTitmouse to btc [link] [comments]

Prepping for a Financial crisis / hyperinflation.

So what can we do about it? Any ideas are welcome.
It has a lot of "what if's"... It depends how tax and law play out with it.Historically speaking:
  1. -I stock bulk diesel for my cars while following historical averages to buy cheap.
  2. -Rotating food stock
  3. -Extra maintenance items, including the big things like a roof on your home if its coming time. Not joking I have a spare water heater and backup heating options, along with minor parts and filters to fix them. Same with cars and engines, (spark plugs, filters (all different filters), oil, cheap sensors that usually go bad and are only 4-10$ each, 1-2 extra alternator per vehicle, belts, mowing belts, bearings, grease, ... and I've literally had to use everything on that list and reorder.)
  1. -Security, Locks, Alarms, Cameras, people steal.
  2. A deep freezer for instance can stock food you use and buy on sale.
  3. Solar energy and solar heating supplements energy you use anyways
  4. Rainwater can be collected and used rather than buying from a source.
  5. A cooking gadget vs eating out.
  6. Tools and learning to fix things vs hire.
  7. House insulation.-Better insulative windows, and sealing.
  8. Geo-Thermal
  9. Gardening
  10. Bidet on toilet (lol serious though...)
  11. Backup power
  12. Your education can be a huge one, not just for prepping but also in your work.
  13. Things that prevent rot, fire, flood / humidity, or failure. Humidity is a silent killer to many preps. (water sump pumps, dehumidifiers, leak prevention, fire extinguishers / sprinklers, )
submitted by AntiSonOfBitchamajig to preppers [link] [comments]

Why i’m bullish on Zilliqa (long read)

Edit: TL;DR added in the comments
 
Hey all, I've been researching coins since 2017 and have gone through 100s of them in the last 3 years. I got introduced to blockchain via Bitcoin of course, analyzed Ethereum thereafter and from that moment I have a keen interest in smart contact platforms. I’m passionate about Ethereum but I find Zilliqa to have a better risk-reward ratio. Especially because Zilliqa has found an elegant balance between being secure, decentralized and scalable in my opinion.
 
Below I post my analysis of why from all the coins I went through I’m most bullish on Zilliqa (yes I went through Tezos, EOS, NEO, VeChain, Harmony, Algorand, Cardano etc.). Note that this is not investment advice and although it's a thorough analysis there is obviously some bias involved. Looking forward to what you all think!
 
Fun fact: the name Zilliqa is a play on ‘silica’ silicon dioxide which means “Silicon for the high-throughput consensus computer.”
 
This post is divided into (i) Technology, (ii) Business & Partnerships, and (iii) Marketing & Community. I’ve tried to make the technology part readable for a broad audience. If you’ve ever tried understanding the inner workings of Bitcoin and Ethereum you should be able to grasp most parts. Otherwise, just skim through and once you are zoning out head to the next part.
 
Technology and some more:
 
Introduction
 
The technology is one of the main reasons why I’m so bullish on Zilliqa. First thing you see on their website is: “Zilliqa is a high-performance, high-security blockchain platform for enterprises and next-generation applications.” These are some bold statements.
 
Before we deep dive into the technology let’s take a step back in time first as they have quite the history. The initial research paper from which Zilliqa originated dates back to August 2016: Elastico: A Secure Sharding Protocol For Open Blockchains where Loi Luu (Kyber Network) is one of the co-authors. Other ideas that led to the development of what Zilliqa has become today are: Bitcoin-NG, collective signing CoSi, ByzCoin and Omniledger.
 
The technical white paper was made public in August 2017 and since then they have achieved everything stated in the white paper and also created their own open source intermediate level smart contract language called Scilla (functional programming language similar to OCaml) too.
 
Mainnet is live since the end of January 2019 with daily transaction rates growing continuously. About a week ago mainnet reached 5 million transactions, 500.000+ addresses in total along with 2400 nodes keeping the network decentralized and secure. Circulating supply is nearing 11 billion and currently only mining rewards are left. The maximum supply is 21 billion with annual inflation being 7.13% currently and will only decrease with time.
 
Zilliqa realized early on that the usage of public cryptocurrencies and smart contracts were increasing but decentralized, secure, and scalable alternatives were lacking in the crypto space. They proposed to apply sharding onto a public smart contract blockchain where the transaction rate increases almost linear with the increase in the amount of nodes. More nodes = higher transaction throughput and increased decentralization. Sharding comes in many forms and Zilliqa uses network-, transaction- and computational sharding. Network sharding opens up the possibility of using transaction- and computational sharding on top. Zilliqa does not use state sharding for now. We’ll come back to this later.
 
Before we continue dissecting how Zilliqa achieves such from a technological standpoint it’s good to keep in mind that a blockchain being decentralised and secure and scalable is still one of the main hurdles in allowing widespread usage of decentralised networks. In my opinion this needs to be solved first before blockchains can get to the point where they can create and add large scale value. So I invite you to read the next section to grasp the underlying fundamentals. Because after all these premises need to be true otherwise there isn’t a fundamental case to be bullish on Zilliqa, right?
 
Down the rabbit hole
 
How have they achieved this? Let’s define the basics first: key players on Zilliqa are the users and the miners. A user is anybody who uses the blockchain to transfer funds or run smart contracts. Miners are the (shard) nodes in the network who run the consensus protocol and get rewarded for their service in Zillings (ZIL). The mining network is divided into several smaller networks called shards, which is also referred to as ‘network sharding’. Miners subsequently are randomly assigned to a shard by another set of miners called DS (Directory Service) nodes. The regular shards process transactions and the outputs of these shards are eventually combined by the DS shard as they reach consensus on the final state. More on how these DS shards reach consensus (via pBFT) will be explained later on.
 
The Zilliqa network produces two types of blocks: DS blocks and Tx blocks. One DS Block consists of 100 Tx Blocks. And as previously mentioned there are two types of nodes concerned with reaching consensus: shard nodes and DS nodes. Becoming a shard node or DS node is being defined by the result of a PoW cycle (Ethash) at the beginning of the DS Block. All candidate mining nodes compete with each other and run the PoW (Proof-of-Work) cycle for 60 seconds and the submissions achieving the highest difficulty will be allowed on the network. And to put it in perspective: the average difficulty for one DS node is ~ 2 Th/s equaling 2.000.000 Mh/s or 55 thousand+ GeForce GTX 1070 / 8 GB GPUs at 35.4 Mh/s. Each DS Block 10 new DS nodes are allowed. And a shard node needs to provide around 8.53 GH/s currently (around 240 GTX 1070s). Dual mining ETH/ETC and ZIL is possible and can be done via mining software such as Phoenix and Claymore. There are pools and if you have large amounts of hashing power (Ethash) available you could mine solo.
 
The PoW cycle of 60 seconds is a peak performance and acts as an entry ticket to the network. The entry ticket is called a sybil resistance mechanism and makes it incredibly hard for adversaries to spawn lots of identities and manipulate the network with these identities. And after every 100 Tx Blocks which corresponds to roughly 1,5 hour this PoW process repeats. In between these 1,5 hour, no PoW needs to be done meaning Zilliqa’s energy consumption to keep the network secure is low. For more detailed information on how mining works click here.
Okay, hats off to you. You have made it this far. Before we go any deeper down the rabbit hole we first must understand why Zilliqa goes through all of the above technicalities and understand a bit more what a blockchain on a more fundamental level is. Because the core of Zilliqa’s consensus protocol relies on the usage of pBFT (practical Byzantine Fault Tolerance) we need to know more about state machines and their function. Navigate to Viewblock, a Zilliqa block explorer, and just come back to this article. We will use this site to navigate through a few concepts.
 
We have established that Zilliqa is a public and distributed blockchain. Meaning that everyone with an internet connection can send ZILs, trigger smart contracts, etc. and there is no central authority who fully controls the network. Zilliqa and other public and distributed blockchains (like Bitcoin and Ethereum) can also be defined as state machines.
 
Taking the liberty of paraphrasing examples and definitions given by Samuel Brooks’ medium article, he describes the definition of a blockchain (like Zilliqa) as: “A peer-to-peer, append-only datastore that uses consensus to synchronize cryptographically-secure data”.
 
Next, he states that: "blockchains are fundamentally systems for managing valid state transitions”. For some more context, I recommend reading the whole medium article to get a better grasp of the definitions and understanding of state machines. Nevertheless, let’s try to simplify and compile it into a single paragraph. Take traffic lights as an example: all its states (red, amber, and green) are predefined, all possible outcomes are known and it doesn’t matter if you encounter the traffic light today or tomorrow. It will still behave the same. Managing the states of a traffic light can be done by triggering a sensor on the road or pushing a button resulting in one traffic lights’ state going from green to red (via amber) and another light from red to green.
 
With public blockchains like Zilliqa, this isn’t so straightforward and simple. It started with block #1 almost 1,5 years ago and every 45 seconds or so a new block linked to the previous block is being added. Resulting in a chain of blocks with transactions in it that everyone can verify from block #1 to the current #647.000+ block. The state is ever changing and the states it can find itself in are infinite. And while the traffic light might work together in tandem with various other traffic lights, it’s rather insignificant comparing it to a public blockchain. Because Zilliqa consists of 2400 nodes who need to work together to achieve consensus on what the latest valid state is while some of these nodes may have latency or broadcast issues, drop offline or are deliberately trying to attack the network, etc.
 
Now go back to the Viewblock page take a look at the amount of transaction, addresses, block and DS height and then hit refresh. Obviously as expected you see new incremented values on one or all parameters. And how did the Zilliqa blockchain manage to transition from a previous valid state to the latest valid state? By using pBFT to reach consensus on the latest valid state.
 
After having obtained the entry ticket, miners execute pBFT to reach consensus on the ever-changing state of the blockchain. pBFT requires a series of network communication between nodes, and as such there is no GPU involved (but CPU). Resulting in the total energy consumed to keep the blockchain secure, decentralized and scalable being low.
 
pBFT stands for practical Byzantine Fault Tolerance and is an optimization on the Byzantine Fault Tolerant algorithm. To quote Blockonomi: “In the context of distributed systems, Byzantine Fault Tolerance is the ability of a distributed computer network to function as desired and correctly reach a sufficient consensus despite malicious components (nodes) of the system failing or propagating incorrect information to other peers.” Zilliqa is such a distributed computer network and depends on the honesty of the nodes (shard and DS) to reach consensus and to continuously update the state with the latest block. If pBFT is a new term for you I can highly recommend the Blockonomi article.
 
The idea of pBFT was introduced in 1999 - one of the authors even won a Turing award for it - and it is well researched and applied in various blockchains and distributed systems nowadays. If you want more advanced information than the Blockonomi link provides click here. And if you’re in between Blockonomi and the University of Singapore read the Zilliqa Design Story Part 2 dating from October 2017.
Quoting from the Zilliqa tech whitepaper: “pBFT relies upon a correct leader (which is randomly selected) to begin each phase and proceed when the sufficient majority exists. In case the leader is byzantine it can stall the entire consensus protocol. To address this challenge, pBFT offers a view change protocol to replace the byzantine leader with another one.”
 
pBFT can tolerate ⅓ of the nodes being dishonest (offline counts as Byzantine = dishonest) and the consensus protocol will function without stalling or hiccups. Once there are more than ⅓ of dishonest nodes but no more than ⅔ the network will be stalled and a view change will be triggered to elect a new DS leader. Only when more than ⅔ of the nodes are dishonest (66%) double-spend attacks become possible.
 
If the network stalls no transactions can be processed and one has to wait until a new honest leader has been elected. When the mainnet was just launched and in its early phases, view changes happened regularly. As of today the last stalling of the network - and view change being triggered - was at the end of October 2019.
 
Another benefit of using pBFT for consensus besides low energy is the immediate finality it provides. Once your transaction is included in a block and the block is added to the chain it’s done. Lastly, take a look at this article where three types of finality are being defined: probabilistic, absolute and economic finality. Zilliqa falls under the absolute finality (just like Tendermint for example). Although lengthy already we skipped through some of the inner workings from Zilliqa’s consensus: read the Zilliqa Design Story Part 3 and you will be close to having a complete picture on it. Enough about PoW, sybil resistance mechanism, pBFT, etc. Another thing we haven’t looked at yet is the amount of decentralization.
 
Decentralisation
 
Currently, there are four shards, each one of them consisting of 600 nodes. 1 shard with 600 so-called DS nodes (Directory Service - they need to achieve a higher difficulty than shard nodes) and 1800 shard nodes of which 250 are shard guards (centralized nodes controlled by the team). The amount of shard guards has been steadily declining from 1200 in January 2019 to 250 as of May 2020. On the Viewblock statistics, you can see that many of the nodes are being located in the US but those are only the (CPU parts of the) shard nodes who perform pBFT. There is no data from where the PoW sources are coming. And when the Zilliqa blockchain starts reaching its transaction capacity limit, a network upgrade needs to be executed to lift the current cap of maximum 2400 nodes to allow more nodes and formation of more shards which will allow to network to keep on scaling according to demand.
Besides shard nodes there are also seed nodes. The main role of seed nodes is to serve as direct access points (for end-users and clients) to the core Zilliqa network that validates transactions. Seed nodes consolidate transaction requests and forward these to the lookup nodes (another type of nodes) for distribution to the shards in the network. Seed nodes also maintain the entire transaction history and the global state of the blockchain which is needed to provide services such as block explorers. Seed nodes in the Zilliqa network are comparable to Infura on Ethereum.
 
The seed nodes were first only operated by Zilliqa themselves, exchanges and Viewblock. Operators of seed nodes like exchanges had no incentive to open them for the greater public. They were centralised at first. Decentralisation at the seed nodes level has been steadily rolled out since March 2020 ( Zilliqa Improvement Proposal 3 ). Currently the amount of seed nodes is being increased, they are public-facing and at the same time PoS is applied to incentivize seed node operators and make it possible for ZIL holders to stake and earn passive yields. Important distinction: seed nodes are not involved with consensus! That is still PoW as entry ticket and pBFT for the actual consensus.
 
5% of the block rewards are being assigned to seed nodes (from the beginning in 2019) and those are being used to pay out ZIL stakers. The 5% block rewards with an annual yield of 10.03% translate to roughly 610 MM ZILs in total that can be staked. Exchanges use the custodial variant of staking and wallets like Moonlet will use the non-custodial version (starting in Q3 2020). Staking is being done by sending ZILs to a smart contract created by Zilliqa and audited by Quantstamp.
 
With a high amount of DS; shard nodes and seed nodes becoming more decentralized too, Zilliqa qualifies for the label of decentralized in my opinion.
 
Smart contracts
 
Let me start by saying I’m not a developer and my programming skills are quite limited. So I‘m taking the ELI5 route (maybe 12) but if you are familiar with Javascript, Solidity or specifically OCaml please head straight to Scilla - read the docs to get a good initial grasp of how Zilliqa’s smart contract language Scilla works and if you ask yourself “why another programming language?” check this article. And if you want to play around with some sample contracts in an IDE click here. The faucet can be found here. And more information on architecture, dapp development and API can be found on the Developer Portal.
If you are more into listening and watching: check this recent webinar explaining Zilliqa and Scilla. Link is time-stamped so you’ll start right away with a platform introduction, roadmap 2020 and afterwards a proper Scilla introduction.
 
Generalized: programming languages can be divided into being ‘object-oriented’ or ‘functional’. Here is an ELI5 given by software development academy: * “all programs have two basic components, data – what the program knows – and behavior – what the program can do with that data. So object-oriented programming states that combining data and related behaviors in one place, is called “object”, which makes it easier to understand how a particular program works. On the other hand, functional programming argues that data and behavior are different things and should be separated to ensure their clarity.” *
 
Scilla is on the functional side and shares similarities with OCaml: OCaml is a general-purpose programming language with an emphasis on expressiveness and safety. It has an advanced type system that helps catch your mistakes without getting in your way. It's used in environments where a single mistake can cost millions and speed matters, is supported by an active community, and has a rich set of libraries and development tools. For all its power, OCaml is also pretty simple, which is one reason it's often used as a teaching language.
 
Scilla is blockchain agnostic, can be implemented onto other blockchains as well, is recognized by academics and won a so-called Distinguished Artifact Award award at the end of last year.
 
One of the reasons why the Zilliqa team decided to create their own programming language focused on preventing smart contract vulnerabilities is that adding logic on a blockchain, programming, means that you cannot afford to make mistakes. Otherwise, it could cost you. It’s all great and fun blockchains being immutable but updating your code because you found a bug isn’t the same as with a regular web application for example. And with smart contracts, it inherently involves cryptocurrencies in some form thus value.
 
Another difference with programming languages on a blockchain is gas. Every transaction you do on a smart contract platform like Zilliqa or Ethereum costs gas. With gas you basically pay for computational costs. Sending a ZIL from address A to address B costs 0.001 ZIL currently. Smart contracts are more complex, often involve various functions and require more gas (if gas is a new concept click here ).
 
So with Scilla, similar to Solidity, you need to make sure that “every function in your smart contract will run as expected without hitting gas limits. An improper resource analysis may lead to situations where funds may get stuck simply because a part of the smart contract code cannot be executed due to gas limits. Such constraints are not present in traditional software systems”. Scilla design story part 1
 
Some examples of smart contract issues you’d want to avoid are: leaking funds, ‘unexpected changes to critical state variables’ (example: someone other than you setting his or her address as the owner of the smart contract after creation) or simply killing a contract.
 
Scilla also allows for formal verification. Wikipedia to the rescue: In the context of hardware and software systems, formal verification is the act of proving or disproving the correctness of intended algorithms underlying a system with respect to a certain formal specification or property, using formal methods of mathematics.
 
Formal verification can be helpful in proving the correctness of systems such as: cryptographic protocols, combinational circuits, digital circuits with internal memory, and software expressed as source code.
 
Scilla is being developed hand-in-hand with formalization of its semantics and its embedding into the Coq proof assistant — a state-of-the art tool for mechanized proofs about properties of programs.”
 
Simply put, with Scilla and accompanying tooling developers can be mathematically sure and proof that the smart contract they’ve written does what he or she intends it to do.
 
Smart contract on a sharded environment and state sharding
 
There is one more topic I’d like to touch on: smart contract execution in a sharded environment (and what is the effect of state sharding). This is a complex topic. I’m not able to explain it any easier than what is posted here. But I will try to compress the post into something easy to digest.
 
Earlier on we have established that Zilliqa can process transactions in parallel due to network sharding. This is where the linear scalability comes from. We can define simple transactions: a transaction from address A to B (Category 1), a transaction where a user interacts with one smart contract (Category 2) and the most complex ones where triggering a transaction results in multiple smart contracts being involved (Category 3). The shards are able to process transactions on their own without interference of the other shards. With Category 1 transactions that is doable, with Category 2 transactions sometimes if that address is in the same shard as the smart contract but with Category 3 you definitely need communication between the shards. Solving that requires to make a set of communication rules the protocol needs to follow in order to process all transactions in a generalised fashion.
 
And this is where the downsides of state sharding comes in currently. All shards in Zilliqa have access to the complete state. Yes the state size (0.1 GB at the moment) grows and all of the nodes need to store it but it also means that they don’t need to shop around for information available on other shards. Requiring more communication and adding more complexity. Computer science knowledge and/or developer knowledge required links if you want to dig further: Scilla - language grammar Scilla - Foundations for Verifiable Decentralised Computations on a Blockchain Gas Accounting NUS x Zilliqa: Smart contract language workshop
 
Easier to follow links on programming Scilla https://learnscilla.com/home Ivan on Tech
 
Roadmap / Zilliqa 2.0
 
There is no strict defined roadmap but here are topics being worked on. And via the Zilliqa website there is also more information on the projects they are working on.
 
Business & Partnerships
 
It’s not only technology in which Zilliqa seems to be excelling as their ecosystem has been expanding and starting to grow rapidly. The project is on a mission to provide OpenFinance (OpFi) to the world and Singapore is the right place to be due to its progressive regulations and futuristic thinking. Singapore has taken a proactive approach towards cryptocurrencies by introducing the Payment Services Act 2019 (PS Act). Among other things, the PS Act will regulate intermediaries dealing with certain cryptocurrencies, with a particular focus on consumer protection and anti-money laundering. It will also provide a stable regulatory licensing and operating framework for cryptocurrency entities, effectively covering all crypto businesses and exchanges based in Singapore. According to PWC 82% of the surveyed executives in Singapore reported blockchain initiatives underway and 13% of them have already brought the initiatives live to the market. There is also an increasing list of organizations that are starting to provide digital payment services. Moreover, Singaporean blockchain developers Building Cities Beyond has recently created an innovation $15 million grant to encourage development on its ecosystem. This all suggests that Singapore tries to position itself as (one of) the leading blockchain hubs in the world.
 
Zilliqa seems to already take advantage of this and recently helped launch Hg Exchange on their platform, together with financial institutions PhillipCapital, PrimePartners and Fundnel. Hg Exchange, which is now approved by the Monetary Authority of Singapore (MAS), uses smart contracts to represent digital assets. Through Hg Exchange financial institutions worldwide can use Zilliqa's safe-by-design smart contracts to enable the trading of private equities. For example, think of companies such as Grab, Airbnb, SpaceX that are not available for public trading right now. Hg Exchange will allow investors to buy shares of private companies & unicorns and capture their value before an IPO. Anquan, the main company behind Zilliqa, has also recently announced that they became a partner and shareholder in TEN31 Bank, which is a fully regulated bank allowing for tokenization of assets and is aiming to bridge the gap between conventional banking and the blockchain world. If STOs, the tokenization of assets, and equity trading will continue to increase, then Zilliqa’s public blockchain would be the ideal candidate due to its strategic positioning, partnerships, regulatory compliance and the technology that is being built on top of it.
 
What is also very encouraging is their focus on banking the un(der)banked. They are launching a stablecoin basket starting with XSGD. As many of you know, stablecoins are currently mostly used for trading. However, Zilliqa is actively trying to broaden the use case of stablecoins. I recommend everybody to read this text that Amrit Kumar wrote (one of the co-founders). These stablecoins will be integrated in the traditional markets and bridge the gap between the crypto world and the traditional world. This could potentially revolutionize and legitimise the crypto space if retailers and companies will for example start to use stablecoins for payments or remittances, instead of it solely being used for trading.
 
Zilliqa also released their DeFi strategic roadmap (dating November 2019) which seems to be aligning well with their OpFi strategy. A non-custodial DEX is coming to Zilliqa made by Switcheo which allows cross-chain trading (atomic swaps) between ETH, EOS and ZIL based tokens. They also signed a Memorandum of Understanding for a (soon to be announced) USD stablecoin. And as Zilliqa is all about regulations and being compliant, I’m speculating on it to be a regulated USD stablecoin. Furthermore, XSGD is already created and visible on block explorer and XIDR (Indonesian Stablecoin) is also coming soon via StraitsX. Here also an overview of the Tech Stack for Financial Applications from September 2019. Further quoting Amrit Kumar on this:
 
There are two basic building blocks in DeFi/OpFi though: 1) stablecoins as you need a non-volatile currency to get access to this market and 2) a dex to be able to trade all these financial assets. The rest are built on top of these blocks.
 
So far, together with our partners and community, we have worked on developing these building blocks with XSGD as a stablecoin. We are working on bringing a USD-backed stablecoin as well. We will soon have a decentralised exchange developed by Switcheo. And with HGX going live, we are also venturing into the tokenization space. More to come in the future.”
 
Additionally, they also have this ZILHive initiative that injects capital into projects. There have been already 6 waves of various teams working on infrastructure, innovation and research, and they are not from ASEAN or Singapore only but global: see Grantees breakdown by country. Over 60 project teams from over 20 countries have contributed to Zilliqa's ecosystem. This includes individuals and teams developing wallets, explorers, developer toolkits, smart contract testing frameworks, dapps, etc. As some of you may know, Unstoppable Domains (UD) blew up when they launched on Zilliqa. UD aims to replace cryptocurrency addresses with a human-readable name and allows for uncensorable websites. Zilliqa will probably be the only one able to handle all these transactions onchain due to ability to scale and its resulting low fees which is why the UD team launched this on Zilliqa in the first place. Furthermore, Zilliqa also has a strong emphasis on security, compliance, and privacy, which is why they partnered with companies like Elliptic, ChainSecurity (part of PwC Switzerland), and Incognito. Their sister company Aqilliz (Zilliqa spelled backwards) focuses on revolutionizing the digital advertising space and is doing interesting things like using Zilliqa to track outdoor digital ads with companies like Foodpanda.
 
Zilliqa is listed on nearly all major exchanges, having several different fiat-gateways and recently have been added to Binance’s margin trading and futures trading with really good volume. They also have a very impressive team with good credentials and experience. They don't just have “tech people”. They have a mix of tech people, business people, marketeers, scientists, and more. Naturally, it's good to have a mix of people with different skill sets if you work in the crypto space.
 
Marketing & Community
 
Zilliqa has a very strong community. If you just follow their Twitter their engagement is much higher for a coin that has approximately 80k followers. They also have been ‘coin of the day’ by LunarCrush many times. LunarCrush tracks real-time cryptocurrency value and social data. According to their data, it seems Zilliqa has a more fundamental and deeper understanding of marketing and community engagement than almost all other coins. While almost all coins have been a bit frozen in the last months, Zilliqa seems to be on its own bull run. It was somewhere in the 100s a few months ago and is currently ranked #46 on CoinGecko. Their official Telegram also has over 20k people and is very active, and their community channel which is over 7k now is more active and larger than many other official channels. Their local communities also seem to be growing.
 
Moreover, their community started ‘Zillacracy’ together with the Zilliqa core team ( see www.zillacracy.com ). It’s a community-run initiative where people from all over the world are now helping with marketing and development on Zilliqa. Since its launch in February 2020 they have been doing a lot and will also run their own non-custodial seed node for staking. This seed node will also allow them to start generating revenue for them to become a self sustaining entity that could potentially scale up to become a decentralized company working in parallel with the Zilliqa core team. Comparing it to all the other smart contract platforms (e.g. Cardano, EOS, Tezos etc.) they don't seem to have started a similar initiative (correct me if I’m wrong though). This suggests in my opinion that these other smart contract platforms do not fully understand how to utilize the ‘power of the community’. This is something you cannot ‘buy with money’ and gives many projects in the space a disadvantage.
 
Zilliqa also released two social products called SocialPay and Zeeves. SocialPay allows users to earn ZILs while tweeting with a specific hashtag. They have recently used it in partnership with the Singapore Red Cross for a marketing campaign after their initial pilot program. It seems like a very valuable social product with a good use case. I can see a lot of traditional companies entering the space through this product, which they seem to suggest will happen. Tokenizing hashtags with smart contracts to get network effect is a very smart and innovative idea.
 
Regarding Zeeves, this is a tipping bot for Telegram. They already have 1000s of signups and they plan to keep upgrading it for more and more people to use it (e.g. they recently have added a quiz features). They also use it during AMAs to reward people in real-time. It’s a very smart approach to grow their communities and get familiar with ZIL. I can see this becoming very big on Telegram. This tool suggests, again, that the Zilliqa team has a deeper understanding of what the crypto space and community needs and is good at finding the right innovative tools to grow and scale.
 
To be honest, I haven’t covered everything (i’m also reaching the character limited haha). So many updates happening lately that it's hard to keep up, such as the International Monetary Fund mentioning Zilliqa in their report, custodial and non-custodial Staking, Binance Margin, Futures, Widget, entering the Indian market, and more. The Head of Marketing Colin Miles has also released this as an overview of what is coming next. And last but not least, Vitalik Buterin has been mentioning Zilliqa lately acknowledging Zilliqa and mentioning that both projects have a lot of room to grow. There is much more info of course and a good part of it has been served to you on a silver platter. I invite you to continue researching by yourself :-) And if you have any comments or questions please post here!
submitted by haveyouheardaboutit to CryptoCurrency [link] [comments]

[ Bitcoin ] Technical: Taproot: Why Activate?

Topic originally posted in Bitcoin by almkglor [link]
This is a follow-up on https://old.reddit.com/Bitcoin/comments/hqzp14/technical_the_path_to_taproot_activation/
Taproot! Everybody wants it!! But... you might ask yourself: sure, everybody else wants it, but why would I, sovereign Bitcoin HODLer, want it? Surely I can be better than everybody else because I swapped XXX fiat for Bitcoin unlike all those nocoiners?
And it is important for you to know the reasons why you, o sovereign Bitcoiner, would want Taproot activated. After all, your nodes (or the nodes your wallets use, which if you are SPV, you hopefully can pester to your wallet vendoimplementor about) need to be upgraded in order for Taproot activation to actually succeed instead of becoming a hot sticky mess.
First, let's consider some principles of Bitcoin.
I'm sure most of us here would agree that the above are very important principles of Bitcoin and that these are principles we would not be willing to remove. If anything, we would want those principles strengthened (especially the last one, financial privacy, which current Bitcoin is only sporadically strong with: you can get privacy, it just requires effort to do so).
So, how does Taproot affect those principles?

Taproot and Your /Coins

Most HODLers probably HODL their coins in singlesig addresses. Sadly, switching to Taproot would do very little for you (it gives a mild discount at spend time, at the cost of a mild increase in fee at receive time (paid by whoever sends to you, so if it's a self-send from a P2PKH or bech32 address, you pay for this); mostly a wash).
(technical details: a Taproot output is 1 version byte + 32 byte public key, while a P2WPKH (bech32 singlesig) output is 1 version byte + 20 byte public key hash, so the Taproot output spends 12 bytes more; spending from a P2WPKH requires revealing a 32-byte public key later, which is not needed with Taproot, and Taproot signatures are about 9 bytes smaller than P2WPKH signatures, but the 32 bytes plus 9 bytes is divided by 4 because of the witness discount, so it saves about 11 bytes; mostly a wash, it increases blockweight by about 1 virtual byte, 4 weight for each Taproot-output-input, compared to P2WPKH-output-input).
However, as your HODLings grow in value, you might start wondering if multisignature k-of-n setups might be better for the security of your savings. And it is in multisignature that Taproot starts to give benefits!
Taproot switches to using Schnorr signing scheme. Schnorr makes key aggregation -- constructing a single public key from multiple public keys -- almost as trivial as adding numbers together. "Almost" because it involves some fairly advanced math instead of simple boring number adding, but hey when was the last time you added up your grocery list prices by hand huh?
With current P2SH and P2WSH multisignature schemes, if you have a 2-of-3 setup, then to spend, you need to provide two different signatures from two different public keys. With Taproot, you can create, using special moon math, a single public key that represents your 2-of-3 setup. Then you just put two of your devices together, have them communicate to each other (this can be done airgapped, in theory, by sending QR codes: the software to do this is not even being built yet, but that's because Taproot hasn't activated yet!), and they will make a single signature to authorize any spend from your 2-of-3 address. That's 73 witness bytes -- 18.25 virtual bytes -- of signatures you save!
And if you decide that your current setup with 1-of-1 P2PKH / P2WPKH addresses is just fine as-is: well, that's the whole point of a softfork: backwards-compatibility; you can receive from Taproot users just fine, and once your wallet is updated for Taproot-sending support, you can send to Taproot users just fine as well!
(P2WPKH and P2WSH -- SegWit v0 -- addresses start with bc1q; Taproot -- SegWit v1 --- addresses start with bc1p, in case you wanted to know the difference; in bech32 q is 0, p is 1)
Now how about HODLers who keep all, or some, of their coins on custodial services? Well, any custodial service worth its salt would be doing at least 2-of-3, or probably something even bigger, like 11-of-15. So your custodial service, if it switched to using Taproot internally, could save a lot more (imagine an 11-of-15 getting reduced from 11 signatures to just 1!), which --- we can only hope! --- should translate to lower fees and better customer service from your custodial service!
So I think we can say, very accurately, that the Bitcoin principle --- that YOU are in control of your money --- can only be helped by Taproot (if you are doing multisignature), and, because P2PKH and P2WPKH remain validly-usable addresses in a Taproot future, will not be harmed by Taproot. Its benefit to this principle might be small (it mostly only benefits multisignature users) but since it has no drawbacks with this (i.e. singlesig users can continue to use P2WPKH and P2PKH still) this is still a nice, tidy win!
(even singlesig users get a minor benefit, in that multisig users will now reduce their blockchain space footprint, so that fees can be kept low for everybody; so for example even if you have your single set of private keys engraved on titanium plates sealed in an airtight box stored in a safe buried in a desert protected by angry nomads riding giant sandworms because you're the frickin' Kwisatz Haderach, you still gain some benefit from Taproot)
And here's the important part: if P2PKH/P2WPKH is working perfectly fine with you and you decide to never use Taproot yourself, Taproot will not affect you detrimentally. First do no harm!

Taproot and Your Contracts

No one is an island, no one lives alone. Give and you shall receive. You know: by trading with other people, you can gain expertise in some obscure little necessity of the world (and greatly increase your productivity in that little field), and then trade the products of your expertise for necessities other people have created, all of you thereby gaining gains from trade.
So, contracts, which are basically enforceable agreements that facilitate trading with people who you do not personally know and therefore might not trust.
Let's start with a simple example. You want to buy some gewgaws from somebody. But you don't know them personally. The seller wants the money, you want their gewgaws, but because of the lack of trust (you don't know them!! what if they're scammers??) neither of you can benefit from gains from trade.
However, suppose both of you know of some entity that both of you trust. That entity can act as a trusted escrow. The entity provides you security: this enables the trade, allowing both of you to get gains from trade.
In Bitcoin-land, this can be implemented as a 2-of-3 multisignature. The three signatories in the multisgnature would be you, the gewgaw seller, and the escrow. You put the payment for the gewgaws into this 2-of-3 multisignature address.
Now, suppose it turns out neither of you are scammers (whaaaat!). You receive the gewgaws just fine and you're willing to pay up for them. Then you and the gewgaw seller just sign a transaction --- you and the gewgaw seller are 2, sufficient to trigger the 2-of-3 --- that spends from the 2-of-3 address to a singlesig the gewgaw seller wants (or whatever address the gewgaw seller wants).
But suppose some problem arises. The seller gave you gawgews instead of gewgaws. Or you decided to keep the gewgaws but not sign the transaction to release the funds to the seller. In either case, the escrow is notified, and if it can sign with you to refund the funds back to you (if the seller was a scammer) or it can sign with the seller to forward the funds to the seller (if you were a scammer).
Taproot helps with this: like mentioned above, it allows multisignature setups to produce only one signature, reducing blockchain space usage, and thus making contracts --- which require multiple people, by definition, you don't make contracts with yourself --- is made cheaper (which we hope enables more of these setups to happen for more gains from trade for everyone, also, moon and lambos).
(technology-wise, it's easier to make an n-of-n than a k-of-n, making a k-of-n would require a complex setup involving a long ritual with many communication rounds between the n participants, but an n-of-n can be done trivially with some moon math. You can, however, make what is effectively a 2-of-3 by using a three-branch SCRIPT: either 2-of-2 of you and seller, OR 2-of-2 of you and escrow, OR 2-of-2 of escrow and seller. Fortunately, Taproot adds a facility to embed a SCRIPT inside a public key, so you can have a 2-of-2 Taprooted address (between you and seller) with a SCRIPT branch that can instead be spent with 2-of-2 (you + escrow) OR 2-of-2 (seller + escrow), which implements the three-branched SCRIPT above. If neither of you are scammers (hopefully the common case) then you both sign using your keys and never have to contact the escrow, since you are just using the escrow public key without coordinating with them (because n-of-n is trivial but k-of-n requires setup with communication rounds), so in the "best case" where both of you are honest traders, you also get a privacy boost, in that the escrow never learns you have been trading on gewgaws, I mean ewww, gawgews are much better than gewgaws and therefore I now judge you for being a gewgaw enthusiast, you filthy gewgawer).

Taproot and Your Contracts, Part 2: Cryptographic Boogaloo

Now suppose you want to buy some data instead of things. For example, maybe you have some closed-source software in trial mode installed, and want to pay the developer for the full version. You want to pay for an activation code.
This can be done, today, by using an HTLC. The developer tells you the hash of the activation code. You pay to an HTLC, paying out to the developer if it reveals the preimage (the activation code), or refunding the money back to you after a pre-agreed timeout. If the developer claims the funds, it has to reveal the preimage, which is the activation code, and you can now activate your software. If the developer does not claim the funds by the timeout, you get refunded.
And you can do that, with HTLCs, today.
Of course, HTLCs do have problems:
Fortunately, with Schnorr (which is enabled by Taproot), we can now use the Scriptless Script constuction by Andrew Poelstra. This Scriptless Script allows a new construction, the PTLC or Pointlocked Timelocked Contract. Instead of hashes and preimages, just replace "hash" with "point" and "preimage" with "scalar".
Or as you might know them: "point" is really "public key" and "scalar" is really a "private key". What a PTLC does is that, given a particular public key, the pointlocked branch can be spent only if the spender reveals the private key of the given private key to you.
Another nice thing with PTLCs is that they are deniable. What appears onchain is just a single 2-of-2 signature between you and the developemanufacturer. It's like a magic trick. This signature has no special watermarks, it's a perfectly normal signature (the pledge). However, from this signature, plus some datta given to you by the developemanufacturer (known as the adaptor signature) you can derive the private key of a particular public key you both agree on (the turn). Anyone scraping the blockchain will just see signatures that look just like every other signature, and as long as nobody manages to hack you and get a copy of the adaptor signature or the private key, they cannot get the private key behind the public key (point) that the pointlocked branch needs (the prestige).
(Just to be clear, the public key you are getting the private key from, is distinct from the public key that the developemanufacturer will use for its funds. The activation key is different from the developer's onchain Bitcoin key, and it is the activation key whose private key you will be learning, not the developer's/manufacturer's onchain Bitcoin key).
So:
Taproot lets PTLCs exist onchain because they enable Schnorr, which is a requirement of PTLCs / Scriptless Script.
(technology-wise, take note that Scriptless Script works only for the "pointlocked" branch of the contract; you need normal Script, or a pre-signed nLockTimed transaction, for the "timelocked" branch. Since Taproot can embed a script, you can have the Taproot pubkey be a 2-of-2 to implement the Scriptless Script "pointlocked" branch, then have a hidden script that lets you recover the funds with an OP_CHECKLOCKTIMEVERIFY after the timeout if the seller does not claim the funds.)

Quantum Quibbles!

Now if you were really paying attention, you might have noticed this parenthetical:
(technical details: a Taproot output is 1 version byte + 32 byte public key, while a P2WPKH (bech32 singlesig) output is 1 version byte + 20 byte public key hash...)
So wait, Taproot uses raw 32-byte public keys, and not public key hashes? Isn't that more quantum-vulnerable??
Well, in theory yes. In practice, they probably are not.
It's not that hashes can be broken by quantum computes --- they're still not. Instead, you have to look at how you spend from a P2WPKH/P2PKH pay-to-public-key-hash.
When you spend from a P2PKH / P2WPKH, you have to reveal the public key. Then Bitcoin hashes it and checks if this matches with the public-key-hash, and only then actually validates the signature for that public key.
So an unconfirmed transaction, floating in the mempools of nodes globally, will show, in plain sight for everyone to see, your public key.
(public keys should be public, that's why they're called public keys, LOL)
And if quantum computers are fast enough to be of concern, then they are probably fast enough that, in the several minutes to several hours from broadcast to confirmation, they have already cracked the public key that is openly broadcast with your transaction. The owner of the quantum computer can now replace your unconfirmed transaction with one that pays the funds to itself. Even if you did not opt-in RBF, miners are still incentivized to support RBF on RBF-disabled transactions.
So the extra hash is not as significant a protection against quantum computers as you might think. Instead, the extra hash-and-compare needed is just extra validation effort.
Further, if you have ever, in the past, spent from the address, then there exists already a transaction indelibly stored on the blockchain, openly displaying the public key from which quantum computers can derive the private key. So those are still vulnerable to quantum computers.
For the most part, the cryptographers behind Taproot (and Bitcoin Core) are of the opinion that quantum computers capable of cracking Bitcoin pubkeys are unlikely to appear within a decade or two.
So:
For now, the homomorphic and linear properties of elliptic curve cryptography provide a lot of benefits --- particularly the linearity property is what enables Scriptless Script and simple multisignature (i.e. multisignatures that are just 1 signature onchain). So it might be a good idea to take advantage of them now while we are still fairly safe against quantum computers. It seems likely that quantum-safe signature schemes are nonlinear (thus losing these advantages).

Summary

I Wanna Be The Taprooter!

So, do you want to help activate Taproot? Here's what you, mister sovereign Bitcoin HODLer, can do!

But I Hate Taproot!!

That's fine!

Discussions About Taproot Activation

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The next XVG? Microcap 100x potential actually supported by fundamentals!

What’s up team? I have a hot one for you. XVG returned 12 million percent in 2017 and this one reminds me a lot of it. Here’s why:
Mimblewimble is like Blu-Ray compared to CD-ROM in terms of its ability to compress data on a blockchain. The current BTC chain is 277gb and its capacity is limited because every time you spend a coin, each node needs to validate its history back to when it was mined (this is how double spending is prevented). Mimblewimble is different - all transactions in a block are aggregated and netted out in one giant CoinJoin, and only the current spending needs to be verified. This means that dramatically more transactions can fit into a smaller space, increasing throughput and lowering fees while still retaining the full proof of work game theory of Bitcoin. These blockchains are small enough to run a full node on a cheap smartphone, which enhances the decentralization and censorship resistance of the network.
The biggest benefit, though, is that all transactions are private - the blockchain doesn’t reveal amounts or addresses except to the actual wallet owner. Unlike earlier decoy-based approaches that bloat the chain and can still be data mined (XMR), Mimblewimble leaves no trace in the blockchain, instead storing only the present state of coin ownership.
The first two Mimblewimble coins, Grin and Beam, launched to great fanfare in 2019, quickly reaching over $100m in market cap (since settled down to $22m and $26m respectively). They are good projects but grin has infinite supply and huge never-decreasing emission, and Beam is a corporate moneygrab whose founding investors are counting on you buying for their ROI.
ZEC is valued at $568m today, despite the facts that only 1% of transactions are actually shielded, it has a trusted setup, and generating a confidential transaction takes ~60 seconds on a powerful PC. XMR is a great project but it’s valued at $1.2b (so no 100x) and it uses CryptoNote, which is 2014 tech that relies on a decoy-based approach that could be vulnerable to more powerful computers in the future. Mimblewimble is just a better way to approach privacy because there is simply no data recorded in the blockchain for companies to surveil.
Privacy is not just for darknet markets, porn, money launderers and terrorists. In many countries it’s dangerous to be wealthy, and there are all kinds of problems with having your spending data be out there publicly and permanently for all to see. Namely, companies like Amazon are patenting approaches to identify people with their crypto addresses, “for law enforcement” but also so that, just like credit cards, your spending data can be used to target ads. (A) Coinbase is selling user data to the DEA, IRS, FBI, Secret Service, and who knows who else? (B) What about insurance companies raising your premiums or canceling your policy because they see you buying (legal) cannabis? If your business operates using transparent cryptocurrency, competitors can data mine your customer and supply chain data, and employees can see how much everyone else gets paid. I could go on, but the idea of “I have nothing to hide, so what do I care about privacy?” will increasingly ring hollow as people realize that this money printing will have to be paid by massive tax increases AND that those taxes will be directly debited from their “Central Bank Digital Currency” wallets.
100% privacy for all transactions also eliminates one HUGE problem that people aren’t aware of yet, but they will be: fungibility. Fungibility means that each coin is indistinguishable from any other, just like paper cash. Why is this important? Because of the ever-expanding reach of AML/KYC/KYT (Anti-Money Laundering / Know Your Customer / Know Your Transaction) as regulators cramp down on crypto and banks take over, increasingly coins become “tainted” in various ways. For example, if you withdraw coins to a mixing service like Wasabi or Samourai, you may find your account blocked. (C) The next obvious step is that if you receive coins that these chainalysis services don’t like for whatever reason, you will be completely innocent yet forced to prove that you didn’t know that the coins you bought were up to no good in a past life. 3 days ago, $100k of USDC was frozen. (D) Even smaller coins like LTC now have this problem, because “Chinese Drug Kingpins” used them. (E) I believe that censorable money that can be blocked/frozen isn’t really “your money”.
Epic Cash is a 100% volunteer community project (like XVG and XMR) that had a fair launch in September last year with no ICO and no premine. There are very few projects like this, and it’s a key ingredient in Verge’s success (still at $110m market cap today despite being down 97% since the bubble peak) and why it’s still around. It has a small but super passionate community of “Freemen” who are united by a belief in the sound money economics of Bitcoin Standard emission (21m supply limit and ever-decreasing inflation) and the importance of privacy.
I am super bullish on this coin for the following reasons:
Because it doesn’t have a huge marketing budget in a sea of VC-funded shitcoins, it is as-yet undiscovered, which is why it’s so cheap. There are only 4 Mimblewimble-based currencies on the market: MWC at $162m, BEAM at $26m, GRIN at $22m, and EPIC at $0.4m. This is not financial advice and as always, do your own research, but I’ve been buying this gem for months and will continue to.
This one ticks all the boxes for me, the only real problem is that it’s hard to buy much without causing a huge green candle. Alt season is coming, and coins like this are how your neighbor Chad got his Lambo back in 2017. For 2021, McLaren is a better choice and be sure to pay cash so that it doesn’t get repossessed like Chad!
  1. A https://www.vice.com/en_us/article/d35eax/amazon-bitcoin-patent-data-stream-identify-cryptocurrency-for-law-enforcement-government
  2. B https://decrypt.co/31461/coinbase-wants-to-identify-bitcoin-users-for-dea-irs
  3. C https://www.coindesk.com/binance-blockade-of-wasabi-wallet-could-point-to-a-crypto-crack-up
  4. D https://cointelegraph.com/news/centre-freezes-ethereum-address-holding-100k-usdc
  5. E https://www.coindesk.com/us-treasury-blacklists-bitcoin-litecoin-addresses-of-chinese-drug-kingpins
  6. F https://www.youtube.com/channel/UCWkTxl5Z6DNN0ASMRxSKV5g
  7. G http://epic.tech/whitepaper
  8. H https://medium.com/epic-cash/epic-cash-on-uniswap-22447904d375
  9. I https://epic.tech/wp-content/uploads/2019/09/figure-3.1.jpg
Links:
submitted by pinchegringo to CryptoMoonShots [link] [comments]

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If you want to know how to mine Bitcoin, there are two different steps you can take – go through a cloud mining company or buy and use purpose-built hardware. though be aware there are a lot The solution, Bitcoin advocate Vijay Boyapati explained, is for most trades to occur at a second layer on top of the Bitcoin blockchain. In the second layer, transfers will happen at much lower fees. Sites to mine bitcoin for free are the ones which provide free Cloud mining service to the users. Also, If you are looking to mine bitcoin for free so you have to do a lot of research as there are many scammers out there. Lastly, Discussion forum sites such as Bitcointalk.org may be very beneficial to collect information about a particular site Bitcoin mining is the traditional way to accumulate/earn bitcoins since bitcoin was discovered by Satoshi Nakamoto.In the beginning stage, a lot of people have mined an unimaginable amount of bitcoins in the shortest time, just by using a regular PC. Technicalities aside though, we know that it takes, on average, 10 minutes to mine one bitcoin block and be rewarded with 6.25 bitcoins. So using these numbers, it would take 1.6 minutes to mine one bitcoin. But that is on a global basis, using the global bitcoin hash rate (computing power).

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