Hello

This is a bit technical.

I tried looking and did not found anything really specific about this.

I was looking at analyzing the blockchain, mainly using the blkxxxxx.dat files generated by the bitcoin core client.

If you look at the structure of a block, in this file, you have:

- magic number (4 bytes) - 0xD9B4BEF9
- Block length (4 bytes) - length of the block that follow
- Block header (80 bytes)
- Transaction count (var int)
- Transactions (multiple bytes) - A list of all the transactions for this block

Now, the block length above could be larger than the size of 'useful' data that follow (header/transactions).  So, there may be extra data at the end of the block, and indeed, this has surfaced in the news that there was some dodgy data that have been found there (but the subject of this topic is not on what's been found).

Now, my question is about the immutability of this 'extra' data.  The immutability of the blockchain is primarily based on the hash of the block header alone (only the block header is used when computing cryptographic hash).  However, the header itself contain a cryptographic merkel hash of all the transactions, so effectively this also make the transactions immutable.  The magic number also is fixed by consensus, so that is also immutable.

But apart from that, the immutability pretty much ends there, meaning that the following data could be modified:
- The block length
- The extra data.

So, effectively, on the blockchain, a specific block could be represented in a 'practically' infinite many possible way.  One could for example grow any block he receive from the network, store any arbitrary data there, and re-broadcast this new block.  Then, any other nodes would accept it (as long as it is under 1MB of size).

Am I right in my assumption?  What are the implications?  Could someone 'pollute' the network and flood it with 1MB blocks (which would effectively give a 500GB blockchain)?  Possibly not to that extent, because all but the newer peers (who still don't have the blockchain yet) already have their own copy of the blocks, but from an academic point of view, if you were to query this rogue node, you would get a 500GB blockchain.

On a more darker side, I could see for example that some parties could hide data there in the hope that enough peers on the network eventually propagate them.  For example, some political parties or spy agencies could take some blocks and append state secrets.  With the current Bitcoin clients all relaying the block 'as is', this would effectively make this extra appended data as semi-immutable (by majority consensus).  This would be more effective for new blocks, where a party controlling many nodes could broadcast this 'new' tempered block very quickly.  In that case, the network would be mixed with possible a large percentage of nodes having one version of a block, and the other half having a different version.  Technically both version of that block would be valid, and that alone would not create any fork.

However, this could very easily and effectively be fixable with a soft fork, by ensuring that any node receiving a block does strip any extra data (make the 'block length' the real size of the block/transactions set).  That would be backward compatible with any existing clients, and really be a 'free' fix.

I have not tried, but this could be easily be verifiable by querying many nodes for a specific block, and check if that all return the exact same block (taking a block which was found to have dodgy data in it).

Any thought, comments?

Regards,
Eric Hoffman

So, with China now going down, I think it's time Bitcoin exchanges ecosystem settle for a new reference.  Who could it be?

We need a Bitcoin-friendly country.  Why not Canada? :-)  And now with Jim Flaherty gone, we may at least have another break on Bitcoin pressure... 

... Well, not so to those who have lost their coins on the exchange, but if you look at Bitcoin as a whole, 50% of the time that BTC went down was due to Gox, and the other exchanges followed afterward.  We have come to rely on Gox for so long now.  Even though it's been shadowed when Bitpay started using an average of several exchanges instead of taking Gox price as the golden exchange rate, and with the Chinese taking over the (BTC) world, I'm sure everyone who followed BTC price had a Gox window open on their desktop.

Now it's over (let face it, even if it does re-open, it's as dead as 50btc.com, which suffered (presumably) the same problem).  So, people will get out and finally look past Gox.  We are free!

Whatever the price does from now on, be it if it goes up, or crash down, won't be because Gox ripple up or ankle the price down.

Just trying to see a bright side in those dark days... 

Want to buy cheap coins?  caVirtex is still "stucked" at 1000$

Why is it so low?  Especially with CAD/USD exchange rate getting lower those days, it should help in the other way...

Well, looking at the hashrate (finally) hitting a wall, I can only speculate that BFL have ended shipping en masse...

So, the world is taking a breath and getting ready for Gen2 ASIC?  Or is this there something I missed with the reason the hashrate stalled?

Is it just me or has the hashrate just had a MASSIVE surge?

Last half hour...

265348 (Main Chain)     2013-10-22 15:59:43
265347 (Main Chain)     2013-10-22 15:57:53
265346 (Main Chain)     2013-10-22 15:55:46
265345 (Main Chain)     2013-10-22 15:56:14
265344 (Main Chain)     2013-10-22 15:54:54
265343 (Main Chain)     2013-10-22 15:52:43
265342 (Main Chain)     2013-10-22 15:50:48
265341 (Main Chain)     2013-10-22 15:47:08
265340 (Orphaned)       2013-10-22 15:39:21
265340 (Main Chain)     2013-10-22 15:39:47
265339 (Main Chain)     2013-10-22 15:34:18
265338 (Main Chain)     2013-10-22 15:32:57
265337 (Main Chain)     2013-10-22 15:32:16

13 blocks found...

The previous 30-minutes periods had between 4 and 7 blocks found (should be 3, but with higher hashrate it's understandable)

Just my observation...  Luck? 

Well, first thing first, I sincerely do hope that the U.S. finally hit a wall and, like a child, get to learn that there are boundaries in life...  Well, imagine your brother in law borrowing you 20$, then 20$ more, then 100$.  You tell him it's too much, and ask him to pay you back before loaning more money.  But you fear that by asking so, you end up your relationship and fear loosing all you have loaned so far, so you lean him 20$ more...  Well, the U.S. is just that, but with numbers no one can really grasp anymore (let alone some number that only does make sense for a mathematician)...  So, let the world go in tear if that's what it take, but for <insert your divinity's here>'s sake, this must stop.

Ok, rant done, what would happen with Bitcoins in the above scenarios, I see a few options.
- People will invest in BTC, in fear of loosing their 401(k), etc.  That will push price up.
- Gov will speed-up on criminalizing BTC, as they will see it as a fiat sink hole (safe heaven).  That will push price down.

So, what do you think?

My taught of the day, what's worth more?  Think about it?  Some BTC, with it's speculation, price rising and falling, but with well established limits, or something the majority of the mass call "fiat", which have clearly no boundaries, and which if you don't have enough, you just invent more, raise the roofs, as pleased?

- Even a fool with minimum common sense would be able to see that 1 BTC should be worth much more than 1000$.
- But it take a wise to see the irony of valuating BTC with something as futile as fiat.
- The enlighten hope that someday we'll drop fiat altogether for something much more noble as cryptocurrency, which does have hard mathematical limits, and can't be messed with by some high elite minority who decide one day that we need to raise some arbitrary limit here, tweek something there, etc.  in their favor just to evade years and years of misbehaving.

I may not have looked far enough, but I don't seem to find anything justifying this sudden sharp rise...

Well, almost 2 days now, we stagnate at 140$.  There's a jump once in a while to 145, and then it get all the way down to 140$.  It is as if someone is trying to control the price.

The point is that if it does that for too long, who will want to buy?  Each time there's an incentive for price to go up, it's a dead shot in the water...

The owner should put some sort of 'auto-scale' in his script.  Again, the data is off-scale...    Please fix! 

Well, I guess it depends if we can crush that 5121.468 BTC (at this time) wall...



I really didn't expect a rise in the first place.  Usually, the trend is to rise during the week, and tank during week-end, but we got the inverse situation.

Well, time will tell.

Just noticed...

Old:

120 Day BTC Volume   Fee
Less than 100   3.00%
Less than 300   2.50%
Less than 600   2.00%
Less than 1200   1.50%
Less than 2500   1.00%
Greater than 2500   0.50%

New:

120 Day BTC Volume   Fee
Less than 400   1.50%
Less than 800   1.40%
Less than 1200   1.30%
Less than 1600   1.00%
Less than 2000   0.80%
Greater than 2000   0.50%

So, the basic fee has been lowered from 3% to 1.5%.  That's good news for Canadian users

Well, this is all speculation  But people are fearing that Gox doesn't have the liquidity to pay everybody.  One theory I could have is that Gox played people's money.

Normally, in an exchange, people send their money and play their own money.  BTC price may rise and fall, people individually gain and lose money, but in the end, no money is really gained or loss, it's only TRADED.  One person will make money on the back of another less fortunate lad, or lose money to another person's gain.

So, as long as each individual account is kept separate, then whatever people bring in or out of the exchange, be it fiat or BTC, then the exchange is still viable, and can have all the fiat/BTC liquidity required.

However, under the cover, the fiat sent to the exchange is just put in a big melting pot.  Some sort of money pool.  And how much each person still hold in fiat (or BTC) is just data bytes stored on a computer.  But this still works as good, and it's much simpler for the exchange operations.

So, as long as each individuals are treated independently, with their own assets isolated from other individuals, the game go on.  If the prices rise and fall, and someone gain or lose money in the end, then it's only their gain/loss.  The exchange is just providing exchange service, and the integrity stays on.

Now, let's speculate what would happen, if in a moment of great "illumination", Gox decided to invest in BTC, but didn't want to put it's own money in the pool.  Instead, it would just go to his main Gox pool account (after all, a lot of people keep fiat in their accounts for different, and legitimate, reasons).  Then, Gox actually play people's money.  It ends up as if Gox would withdraw from the money pool, and re-insert it under it's name, to buy BTC.  All this in hope that price will rise, and cash out (return what it took from the pool, and take out the profit).  But what happen is that the pool is now short.  What would happen if that the prices keep falling.  People more and more want to cash out.  The only problem is that the fiat pool is now drained.

The only options are:
- For Gox to insert fresh money in the poll (actually taking his loss at that time), but that most realistically won't happen (talking millions of $ here).
- Delay the cashout, in hope people reflow the fiat pool, so to pay out other investors wanting to cash out.  And hope that enough transactions occurs in the meantime so Gox has some revenue from transactions to help cover this up.  Well, seeing an increase in transaction fees would very highly back this theory up!

That scenario, although started faithfully, has now fully turned into a Ponzi-like scheme.

Note that this scenario is hypothetical and hopefully purely fiction.  But I think there's still reasons for concerns...

[may]

Well, for the anti-bears out there, think about this.  Sure it would be nice to see the price start to rise.  But, honestly, do you have any plausible reason why Bitcoin would go up?

- MtGox unfreezing payout?  Well, even if technically unfrooze, they still keep a 2 week delay.  Some say that it's because they really lack liquidity and they want to have some cash inflow to pay for the outflow (à la Ponzi).  In any case, we can forget that as the trend changer.
- Winlevoss fund?  Well, those things take time.  It won't happen tomorrow for sure.  And even if it happen soon, do you think people will invest just for that?  There's nothing to back it up except for the speculative/hype aspect of it.  Fundamentally, the hype is already gone, and there's no real economy put forward here.
- Paypal won't go Bitcoin for a while.  It's under U.S. laws and probably don't want all the hassle of registering, etc.
- Any big player jumping into Bitcoin?  Who would risk it?  The buzz is gone.
- Anything else?

On the negative side though there's just more and more that pile up against Bitcoin.

So, do you really just hold in hope that some magical power would suddenly change the trend?  In hope that it may rise for unforeseen reason?  Do you really think such a rise would be sustained?  How much do you think the price would rise over the course of several weeks?  10%, 20%, 50%?  Really, that sort of thing happened last time because there was sustained news, hype, media attention, coordinated turn of events.  Really, the buzz is gone.  People who had the chance to learn about Bitcoin already know about it by now.  The medias already have forgotten about it...  Old story, nothing new.

I'm telling you, the future does not look bright.  And I don't see anything that would sustain a rise, let alone a change of trend.  So, before speculating that the price may rise, and jump back in if it goes up by 5%, think more than a week ahead.  The golden days are behind.

I don't say that it's over, just that the magic is no longer there.  Price may stabilize, but the fundamental problem is there, Bitcoin is still and always had been a virtual speculative hype.  And it's now being seen as a threat by the U.S. govt./banks.  It will only get beaten more and more, and with more fierceness as the price go up, and as more people invest in it.

Bitcoin is still a child.  It's not seen anywhere as a serious option for the future.  Way too much fluctuation.  Way to much uncertainties.

That's my opinion, just my 2¢...  And please, lawful believers and undeniable bulls, put to good use your freedom of speech and don't hesitate to flame me!  That's what the speculative forum is for  But I think it's time to take a break for a moment and do a reality check.

Is it just me?

It seems like the graph didn't update since yesterday at http://bitcoin.sipa.be/

Seems like BTC has bottomed?  If we reach 80, people might just jump back in and panic buy?  Well, let's hope it happen

Of course, I could be wrong!

Well, they say you learn by your mistakes...  I can tell you to never think that a stock (or Bitcoin in this case) can't go lower.  It can ALWAYS go lower.  Down to 50$, down to 10$, down to 1¢, end even lower.  I actually lost a few $ in stocks in the early 2000 in the telecom industry (well, that was mostly 'playing' money at the time for me but still, 2 grands gone up for used-to-be-50$-stocks that I thoughts would have bottomed at 1$, and 50¢, and 10¢, etc. ending up in bankruptcy).  Just think of the Nortel case for example...

So, if you go and buy because prices has lowered in the last few days, do it because you have a really good insight that there is reason for it to go up over long therm other than speculation.

That's the problem now, it's that Bitcoin is still held only be speculation, and it has no real backing economy yet other than some random companies here and there venturing in Bitcoins other than "another form of payment" added to their portfolio.  And, as opposed to gold, silver, and other tangible things that you can put aside (physically), for most of the people hearing about Bitcoins, it's still really too much "virtual" to be taken seriously (talking about newcomers hearing about Bitcoins for the first time).

Well, with the difficulty going up and prices going down, even with an FPGA setup I'm thinking of shutting it soon.  I make 3.54GH/s, taking 700W~900W.  In Quebec, electricity is cheap.  Around 7.5¢ per KW/h.  That sump up to around 40~50$ electricity per month, and I'm making around 200$ profit per months.  I remember the days where I had less hashing power and was making 500$+ per months.

Ok, still, it's 200$ (after electricity bill) per months, but it only seem that it will get worse (price tanking, diff rising, ...).  And with the summer heat coming (yeah, still 'coming'...  Shitty weather ), it's becoming a furnace in my room.

So, that's my situation.  Multiply that by a fair amount and you get the status of GPU miners.  So that's only fair to ask if anyone is still GPU mining?

Tough times... 

So, I thought that prices would just slowly raise up after having "slept" at 120~130$, but it looks like we are in a big depression.  Pretty much like in 2011.

Before the 200+$ peak, there was great expectation, opportunities, lot of good news, media attention picking up, perfect timing of events.  That was followed by a correction as the prices just raised too quickly.  Now however, it seems that people are just loosing faith in Bitcoins.  Go everywhere and you can see that there's general uncertainty over the future of Bitcoins.

The biggest problem now is how people perceive all of this U.S. regulations.  The regulations are mainly for avoiding money laundering.  The takedowns did have some legitimacy, for example, the Liberty Reserve was well known for tax evasion plots.  However, we are currently now in a void.  The U.S. would really need some big BTC exchange, who play along with the U.S. rules, to give more confidence.

Now, the world being what it is, for sure, a lot of people probably did invest in Bitcoins with questionable motives.  Big investors, wanting to hide some money away.  And there's probably a few cashing out while they still can.

But even for the 'good guys' out there, for sure there are other investors that are uncertain about Bitcoins future.  So they pull out.  That in turn drive the price lower, leading to more uncertainties, more doubts, and a general medium/long term downtrend. That's basically a bear market.

What will drive the price up now?  For a start, would need clearing uncertainties with the U.S. regulations (more precisely how people perceive it).  It would need some good news also, like big company accepting Bitcoins (read Amazon, Paypal, WalMart, etc.).  The last one is not a joke, remember who actually killed the HD-DVD in favour of the Blu-Ray...  Well, not 'killed', but tipped the balance

So, the future really is uncertain...  It may dip to nothingness, or may well flip side and go up to 1000$ in a few months.  'Satoshi Nakamoto' did invent a really great concept, and he was able to forecast a lot of things when he implemented the blockchain, but he surely could not have predicted how the very basic human nature would drive it's project

Well, it's just my theory...  My 2 cents worth (my 0.0002BTC worth!).

Well, FRC is just above parity with BTC.  In a few blocks, FRC difficulty will go much higher (it's been mined like crazy).  Probably 4x higher.  This means that profitability will lower 4-fold for FRC miners.  To stay at profit, the FRC exchange rate will have to go higher, no?

What do you think?  Would it be a good time to invest in FRC, in hope that the exchange rate raise to match difficulty increase (and have a much higher total FRC->BTC value)?