Some people argue that there should be one dominant "reference" client (e.g., Core) and everyone should run that.  Others argue that there should be multiple competing implementation (e.g., Core, Classic, BTCd, Bcoin, Unlimited, XT).  What do you think?

[What we’re doing with Bitcoin Unlimited, simply]

What we’re doing with Bitcoin Unlimited, simply

Formatted article available on Medium here.

Bitcoin has no center. It has no Board of Directors. It has no CEO, no President, no Chieftain, Sheik or Shah. Bitcoin is a decentralized network made up of voluntary participants — only loosely connected — who come together for their mutual benefit. There are users who transact in bitcoin to take advantage of its privacy and convenience, and investors who hold bitcoin hoping to profit from its price appreciation. There are node operators whose computers validate and relay the transactions made by Bitcoin users, and there are miners — a special type of node operator — whose mining farms append blocks of new transactions to the permanent blockchain ledger, rewarding themselves for this service with 12.5 newly-minted bitcoins.

The fact that Bitcoin has no center—that Bitcoin is decentralized — is the very essence of its nature. It is this lack of a center that helps to ensure the integrity of Bitcoin as money. If Bitcoin had a center, users would have to trust it not to reverse or censor payments for political reasons, or reward itself unfairly with newly-created bitcoins. If Bitcoin had a center, it would be much less useful as peer-to-peer electronic cash.

And there is no doubt: Bitcoin is useful as electronic cash. One measure of its usefulness is the price of a bitcoin, which has increased from $1.08 six years ago, to $993 today.

A second measure of Bitcoin’s usefulness is how often it is used. The total volume of transactions processed by the Bitcoin network has likewise climbed from 1 transaction per minute six years ago to an average just shy of 3 transactions per second today.

A third measure of Bitcoin’s usefulness is the number of people using it. Due to Bitcoin’s pseudonymous nature, user-base estimates are often disputed, today ranging anywhere from hundreds of thousand to tens of million. But one thing that is not disputed is that the growth of Bitcoin’s user base was a primary driver increasing both the total volume of transactions and the price of a bitcoin.

Bitcoin’s lack of a center comes with a cost too: there is no conductor waiving his baton, coordinating the network participants while they play from a curated score. Even changes that are widely perceived as positive are difficult to roll out, as doing so involves communication and cooperation between the loosely-connected participants who make up the Bitcoin network.

The most pertinent example of a need for change is the “1 MB block size limit.” In 2010, Satoshi Nakamoto added a protocol rule that limited the volume of transactions committed to the blockchain to roughly 3 per second (3 transactions per second typically fills blocks up to the 1 MB limit). When the limit was added, it was 800 times greater than the natural transaction volume, and so the limit did not constrain the natural growth of the system (it served only as an anti-spam measure). But today, the network is “maxed out,” regularly hitting this limit, and no longer free to grow how it did during the first 7 years of its history.


Fig. 1. Transaction volume on the Bitcoin network is now constrained by the 1 MB block size limit enforced by approximately 90% of network nodes. If the block size limit were raised, the transaction volume wouldn’t immediately fill it, but would rather continue to grow similar to how it grew before hitting the limit.

How might we increase this limit, if Bitcoin has no center that can do it for us? To answer this question, we must first understand who it is that is enforcing the block size limit.

So who is it? Why can’t Bitcoin users make more than the 3 transactions per second on average today? The reason is related to the fact that when a payment is sent between two users, it doesn’t actually go directly from User A to User B; instead it is relayed to, and approved by, every node on the network. There are approximately 6000 accessible nodes, or assuming bitcoin has 5 million users, about 1 node for every 800 users.

When a miner finds a new block of transactions to add to the blockchain, each node checks the size of that block. If the block is larger than 1 MB (i.e., if it contains more than approximately 3 transactions per second worth of data), 9 out of 10 nodes today would reject that block as being invalid. No miner would risk intentionally producing a block larger than 1 MB because he knows that the network as a whole would reject it and his 12.5 BTC reward would be lost. And so even though miners may want to process more transactions per second, they don’t because effectively they can’t — the other nodes won’t let them.

We see then that to increase the limit — to allow miners to process more than 3 transactions per second —it is the people operating these nodes who must take action. Node operators must convincingly communicate to the miners that they are ready and willing to accept larger blocks. This is especially true for economically-significant nodes such as those running Bitcoin exchanges, payment processors, and web wallets. What we’re trying to do with Bitcoin Unlimited is give node operators a flexible set of tools to allow them to do this.

Very simply:

    1. Bitcoin Unlimited allows a node operator to quickly and easily change his node’s block size limit.

    2. Bitcoin Unlimited allows a miner to quickly and easily change the maximum size of blocks his node will produce.

    3. Bitcoin Unlimited helps node operators and miners signal their block size preferences to the rest of the network.

Today, approximately 1 in every 10 network nodes is running Bitcoin Unlimited, with a median block size limit of 16 MB. As more and more node operators take similar initiatives and raise their node’s block size limits, miners become more and more tempted to produce larger blocks that contain more transactions. At some point — when miners are comfortable that a sizeable majority of the network is ready and willing to accept larger blocks — a miner will produce one, it will be accepted into the permanent blockchain ledger, and Bitcoin will be free to continue growing.

What we’re doing with Bitcoin Unlimited is that simple.

共识市场

Chinese translation of "The Market for Consensus."

Um Portão para Blocos-Excessivos: Como o Nodo da Bitcoin Unlimited lida com “Grandes” Blocos

Portuguese translation of "The Excessive-Block Gate: How a Bitcoin Unlimited Node Deals With “Large” Blocks"

[Bitcoin Unlimited has now proven empirically that individual nodes can increase their own personal block size limits and stay perfectly in sync with consensus.]

With the recent release of Bitcoin Unlimited, last time I checked, 0.6% of the network nodes had switched.  These nodes will accept blocks greater than 1 MB **TODAY**.  That is, they do not need to wait until something like BIP101 activates.

Bitcoin Unlimited has now proven empirically that individual nodes can increase their own personal block size limits and stay perfectly in sync with consensus. 

On the other hand, no rational miner would dare to publish a block greater than 1 MB today because it would certainly be orphaned.  But eventually when enough nodes have increased their own block size limits for what they will accept, a brave miner will produce a large block, it will be accepted into the Blockchain, and we'll look back at this debate and laugh. 

[A Visual Explanation of Subchains]

A Visual Explanation of Subchains

Subchains are a practical application of "weak blocks," which add security to zero-confirmation transactions and permit massive scaling of Bitcoin.




Fig. 1.  Each time a block that satisfies the weak target is found, the subchain is extended.   When a block satisfying the strong target is found, the subchain is closed, becoming a strong block, and a new subchain begins.




Fig. 2.  Miners cooperate to build subchains in order to process more transactions and claim more fees without incurring additional orphaning risk.  This illustration visualizes "idealized" ¼-difficulty subchains (also referred to as 4x subchains).  In practice, each strong block may contain more or less than four weak blocks, due to randomness.




Fig. 3.  Miners build subchains layer by layer (a – c), where each layer corresponds to the solution of a weak block.  To propagate blocks (weak or strong), miners need only send their Δ-block and a reference to the subchain’s tip (f), reducing the quantity of transmitted bytes.  When a nonce that satisfies the strong target is found, the subchain is closed thereby becoming a strong block (d), and miners begin working on a new subchain (e).


For further reading, please refer to "Reduce Orphaning Risk and Improve Zero-Confirmation Security With Subchains."

This animation is a unique visualization of the historical relationship between the average block size and the price of a bitcoin. Not only do the two quantities tend to grow larger together, the higher-frequency oscillations are often in phase too.

The animation was created in Mathematica from empirical (real) data downloaded from blockchain.info. I wrote a simple program to create a “true-to-scale” static image for an arbitrary month, looped through all the months of Bitcoin’s history, and then exported the resulting array of images as an animated GIF.

The cited 92% correlation is the Pearson’s correlation coefficient between the logarithm of the two time series. It is important to take the logarithm so that the correlation coefficient describes how the percent change in one quantity is related to the perfect change in the other.

P.S. The green rectangles are supposed to represent dollar bills

CROSS-POST NOTICE: This content was also submitted to https://www.reddit.com/r/Bitcoin/ but I am not permitted to share the link to the discussion over there. Please take notice of the following comment by /u/eragmus:

"Next time, I'd suggest explicitly letting people here know that you do not want that brigading to occur. Make it clear that you want discussion, instead of a mob. Honestly, make a good faith attempt and genuinely try to figure out the truth without any bias, and no in the world will have justification to ban or censor anything... Or if they do, I won't remain a supporter, at least."

I encourage you to freely participate in discussion at Reddit, up vote and down vote as you normally would, but I remind you that vote brigading is against Reddit rules.

This is a simple animated GIF that visualizes one possibility for how multiple protocol implementations might emerge over time.

Decentralizing development and supporting multiple forkwise-compatible implementations of the protocol is a worthwhile goal that will simultaneously make Bitcoin more robust and more responsive to the will of the Bitcoin community.

Cross-posted: https://www.reddit.com/r/Bitcoin/comments/3nhq5a/deprecating_bitcoin_core_visualizing_the/

[Question: is it possible for Bitcoin to enforce a rule that goes against the will of the market? How can we enforce rules that most of us disagree with?]

Question: is it possible for Bitcoin to enforce a rule that goes against the will of the market?  How can we enforce rules that most of us disagree with?

As an example, consider the block size limit.  When it was put in place five years ago by Satoshi, it served as an anti-spam measure.  It was actually 800x larger than Q* so the vertical line marked Q_max was actually 100 ft off the chart!  Since the production quota was to the left of the free-market equilibrium point, it didn't affect the market dynamics.  There was no economic pressure to change the limit.  



However, Bitcoin has grown tremendously over the past five years and I believe the limit is now serving as a political measure instead.  It is to the right of Q*, resulting in what economists call a "deadweight loss."  This is the total economic activity lost as a direct result of the quota.  It also represents the will of the market (people) clamouring for change.



If the market wants to be at Q*, but the production quota is forcing it to be at Q_max, what can a group do to continue to enforce the production quota against the will of the market?  How can the invisible hand be restrained?

[at least 40 votes were cast]

NOTE: THIS IS A REPOST OF THIS SINCE THAT POLL BROKE SOMEHOW.  NO NEED TO REPOST YOUR ADDRESSES IF YOU'VE ALREADY POSTED IN THAT THREAD.  

I am donating 50,000 bits to this experiment (0.05 BTC).  These bits will be divided between 5 lucky participant (chosen at random) if everyone can come to consensus and win!

Here's how the game works:

- It takes 100% consensus on the "100%" option to have a 100% chance of winning
- ...90% consensus on the "90%" option to have a 80% chance of winning
- ...80% consensus on the "80%" option to have a 60% chance of winning
…
- ...50% consensus on the "50%" option to have a  0% chance of winning
- You may change your vote as many times as you like

So basically, you want to come to consensus at as high a % as possible (to earn more) but it's also harder to achieve consensus at that higher level.  What shall you do??

The poll will close when either:

(a) consensus has been reached on any one of the options AND at least 40 votes were cast.
(b) Poll closes August 27, 2015, 03:40:10 AM UTC with no consensus.

If the poll closes with consensus, then I will make a comment in this thread that the poll is officially closed and note the current block height as reported by blockchain.info.  We will pick a random number from the block at a height 2 blocks above this one.  A random number will be calculated like:

   rand = 100% (hash of coinbase TX) / 2^256

If

   rand < % chance of winning

Then five people will win 10,000 bits each.  To pick the winners, I will hash all of the bitcoin addresses with SHA256 and select the five addresses with a hash closest to the hash of the coinbase TX from above.  

OTHER RULES: Post your Bitcoin address in a comment.  This might be a little messy so I have the right to call off the experiment if the number of votes is vastly different than the number of bitcoin addresses posted.  I also have the right to adjust the rules if I realize I screwed something up!!  

LASTLY: If consensus has been reached and I don't notice it, someone please post a comment along with a screen shot.  

[at least 40 votes were cast]

I am donating 50,000 bits to this experiment (0.05 BTC).  These bits will be divided between 5 lucky participant (chosen at random) if everyone can come to consensus and win!

Here's how the game works:

- It takes 100% consensus on the "100%" option to have a 100% chance of winning
- ...90% consensus on the "90%" option to have a 80% chance of winning
- ...80% consensus on the "80%" option to have a 60% chance of winning
…
- ...50% consensus on the "50%" option to have a  0% chance of winning
- You may change your vote as many times as you like

The poll will close when either:

(a) consensus has been reached on any one of the options AND at least 40 votes were cast.
(b) Poll closes August 28, 2015, 01:08:08 AM UTC with no consensus.

If the poll closes with consensus, then I will make a comment in this thread that the poll is officially closed and note the current block height as reported by blockchain.info.  We will pick a random number from the block at a height 2 blocks above this one.  A random number will be calculated like:

   rand = 100% (hash of coinbase TX) / 2^256

If

   rand < % chance of winning

Then five people will win 10,000 bits each.  To pick the winners, I will hash all of the bitcoin addresses with SHA256 and select the five addresses with a hash closest to the hash of the coinbase TX from above.  

OTHER RULES: Post your Bitcoin address in a comment.  This might be a little messy so I have the right to call off the experiment if the number of votes is vastly different than the number of bitcoin addresses posted.  I also have the right to adjust the rules if I realize I screwed something up!!  

LASTLY: If consensus has been reached and I don't notice it, someone please post a comment along with a screen shot.  

The purpose of this thread is to discuss the various ways in which Bitcoin is centralized, and the risks imposed by each form of centralization.  To start the discussion, here is a graph that illustrates the centralization in nodes, mining and development:



Source: https://www.reddit.com/r/bitcoinxt/comments/3i37m6/centralization_in_bitcoin_nodes_mining_and/

With the recent removal of the "Gold Collapsing. Bitcoin UP" thread [my favourite thread to chat in], I've become unsure what the rules are for posting here at this forum.  In particular:

1.  Are we allowed to talk about non Bitcoin Core implementations of the protocol?

2.  Are we allowed to discuss proposals that, if adopted by >50% of the hash power, would result in a hard fork?

3.  Are we allowed to criticize the moderators?

4.  Can I post /u/raisethelimit's lasted comic?  [lol it involves a CONSENS-A-TRON^TM]

[fixed-price bid]

I'm accepting bids to create a webpage that allows users to digitally sign or verify files with a bitcoin private key, as shown below.  Everything should occur client side.  Most of the code required is already open source and used at http://www.proofofexistence.com/ and https://brainwallet.org/#sign.  If you are interested in doing this work (just the coding--no hosting/management required), then place your fixed-price bid in this thread.  Dealing gracefully with invalid inputs is expected.  

1.  I want one tab on the page that allows a user to select a file, paste a private key, and then produce the digital signature (all done client side):



2. And I want another tab on the same page to allow a user to verify a signature:



If you place a bid and I accept, then I expect to see meaningful progress within 1 week.  

I reserve the right to not select any bid, if none are satisfactory to me.  I am willing to escrow the funds with a forum member who I trust.  

*EDIT: format for the signatures has been clarified in this post two below.  

[...So, if you could press a button and instantly the community would have access to a well-written/researched peer-reviewed "review article," what topic (or topics) would you pick?]

When I discovered Bitcoin in early 2013, I was blown away by the brilliant ideas and content generated by this largely informal and online community.  At the same time, as a new member trying to learn about Bitcoin, it was difficult for me to distinguish the "signal from the noise" when the media consisted of forum posts, blogs, and self-published papers.  What I wanted was an authoritative way to identify high-quality cryptocurrency research that was generally accepted as accurate and important by experts in the field.  

Something that I think would help increase the signal-to-noise ratio is efforts aimed at aggregating and filtering this content.  Basically, seeking out the relevant work generated across both formal (journal papers, conference proceedings) and informal channels (forums, reddit, github, etc) and packaging it into neat and tidy review articles with thorough referencing.  The purpose of this thread is to discuss what topics related to Bitcoin would be best served by such review articles...

...So, if you could press a button and instantly the community would have access to a well-written/researched peer-reviewed "review article," what topic (or topics) would you pick?

Reading Andrew Poelstra's recent paper "On Stake and Consensus" got me interested in better understanding how various proof-of-stake schemes (cPOS, dPOS, etc.) work.

In particular, for each PoS scheme I want to know:

1.  After leaving the network for some length of time, how does a node determine the current state of the blockchain?

2.  How are new blocks added to the blockchain?

I'm finding it difficult, however, to extract the signal from the noise in the literature I find. Does anyone know of a concise but complete technical description of the various PoS schemes in use?


==================
SOME RESOURCES:

Original thread by QuantumMechanic:
https://bitcointalk.org/index.php?topic=27787.0

Nxt white paper:
http://wiki.nxtcrypto.org/wiki/Whitepaper:Nxt

Neucoin white paper:
http://www.neucoin.org/en/whitepaper/download

Bitshares PoS:
http://wiki.bitshares.org/index.php/DPOS

Wikipedia article:
http://en.wikipedia.org/wiki/Proof-of-stake

Bitcoin PoS wiki:
https://en.bitcoin.it/wiki/Proof_of_Stake

https://github.com/ConsensusResearch/articles-papers/blob/master/multistrategy/multistrategy.pdf

https://raw.githubusercontent.com/vbuterin/scalability_paper/master/scalability.pdf

Question for the experts out there:

Let

    Q1 = k1 * G

and
  
    Q2 = (k1 + n) * G.

If Q1, Q2, G, and n are known, is it still difficult to determine k1?

What about if

    Q2 = n * k1 * G?


Q_i is a secp256k1 curve point (public key), k_i is a private key, and G is the secp256k1 base point.

These are two slides for a presentation on mobile NFC payments at this event in Seattle on Wednesday.  The event is really about conventional payments, but one of the speakers asked if I had any PointPoint slides on Bitcoin + NFC so I made these up.  Let me know what you think.  

Quick question that Google doesn't seem to know the answer to: do X.509 certificates (the kind used in the new bitcoin payment protocol) support signatures using bitcoin's secp256k1 elliptic curve?  It seems that RSA is the most commonly used.