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Author Topic: What happens when a new minable coin is issued ?  (Read 740 times)
lentzaj
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September 11, 2017, 07:37:53 PM
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Let's get back to the birth of BTC to make my question clearer. A the very first beginning, nobody was mining it. And then some miners get involved, first blocks of transaction were validated. At a point I guess, there were less than 20 miners. Where was the trust in the BTC network with such a small amount of miners ? They could agree together on how to store the transaction history and for example send all the BTC to one specific address. Any explanation would be greatly appreciated. Sorry if this question was silly....


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DannyHamilton
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September 11, 2017, 07:47:06 PM
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Let's get back to the birth of BTC to make my question clearer. At the very first beginning, nobody was mining it.

Well,  before the very beginning nobody was mining it. AT the very beginning Satoshi was mining it. There isn't a beginning until someone mines the first block. Hal Finney was likely mining it as well.

And then some miners get involved, first blocks of transaction were validated.

In the case of bitcoin, the earliest blocks contained ONLY the 1 transaction that pays the miner his block reward.  There were no other transactions yet.

At a point I guess, there were less than 20 miners.

Very likely true for a while.  Yes.

Where was the trust in the BTC network with such a small amount of miners?

There wasn't any.

Bitcoin was considered to be an interesting experiment.  Since there wasn't any trust, bitcoins didn't have any value.  You could get them for free, and people sent them to others for free. Trust developed over time.  As trust increased, the demand for bitcoins increased, and as a result the exchange rate increased.

They could agree together on how to store the transaction history and for example send all the BTC to one specific address.

This is not possible.  Miners cannot include invalid transactions in their blocks.  If they do, then all nodes, wallets, merchants, etc would reject the invalid block.  Miners can only choose which VALID transactions to include in their block.

So it would be possible for colluding miners to engage in a double-spend attack, or to prevent transactions from being confirmed. However, it would not be possible to just take bitcoins from others (unless they start over with a new blockchain from the earliest block that mined any of the bitcoins that the person is holding).

lentzaj
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September 13, 2017, 04:34:20 PM
 #3

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This is not possible.  Miners cannot include invalid transactions in their blocks.  If they do, then all nodes, wallets, merchants, etc would reject the invalid block.  Miners can only choose which VALID transactions to include in their block.

Thanks for providing this explanation. But how could the VALIDITY of a transaction be determined ?

Do you have any good reference for non-techies to share ?

Many thanks for your help !


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jackg
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September 13, 2017, 04:42:53 PM
 #4

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This is not possible.  Miners cannot include invalid transactions in their blocks.  If they do, then all nodes, wallets, merchants, etc would reject the invalid block.  Miners can only choose which VALID transactions to include in their block.

Thanks for providing this explanation. But how could the VALIDITY of a transaction be determined ?

Do you have any good reference for non-techies to share ?

Many thanks for your help !

Generally anything that breaks the main protocol rules of all/most nodes.
These include:
Spending an input that has already been SENT and CONFIRMED by the network. This used to be a problem in the bitcoin protocols a while back.
Also, anything that uses an invalid input or output script.
Also, just to state it, any transaction above 1MB in size would never confirm on the network (it's very unlikely we'll see this, but if we do the transaction will have to be broken down smaller by the person sending it).


Edit: sorry, largest transaction that can be accepted is actually about 999.8kb. However, transactions bigger than 100kb may not be stored in the mempool.

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September 14, 2017, 08:42:33 AM
 #5

^ Your transaction should be valid if you can see it on your client, if its the reference client or any client that is in compliance with the protocol rules.

Thanks for providing this explanation. But how could the VALIDITY of a transaction be determined ?

Do you have any good reference for non-techies to share ?

Many thanks for your help !
For the transaction to be valid, the inputs of the transaction must be able to be found in the mempool. A transaction can be valid if the inputs are unconfirmed, though not neccesarily all the time. It CANNOT be valid if the signatures of the transaction do not meet the requirement stated by the output to send it.

Other than that, the more confirmations you have, the harder it is to reverse it. Absolutely nothing to do with the validity.

DannyHamilton
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September 14, 2017, 10:11:57 AM
 #6

For the transaction to be valid, the inputs of the transaction must be able to be found in the mempool.

This is not true.

There is no requirement that any transaction ever be in anybody's mempool.

Transactions often sit in the mempool while waiting to be included in a block, but they don't have to.

A transaction can be valid if the inputs are unconfirmed, though not neccesarily all the time.

That tells us nothing about how the validity is determined.

It CANNOT be valid if the signatures of the transaction do not meet the requirement stated by the output to send it.

Having a valid input script is only one of several requirement.  The input script is typically (when spending P2PKH outputs) a valid signature AND a public key.

There are other requirements as well.  For example, the sum of the value of the outputs must NOT exceed the sum of the value of the inputs (except for the generation transaction), and the outputs must not include any invalid OP codes.

Other than that, the more confirmations you have, the harder it is to reverse it. Absolutely nothing to do with the validity.

I don't think there were any questions about reversing transactions. Please try to stay on topic.

ranochigo
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September 14, 2017, 12:24:34 PM
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For the transaction to be valid, the inputs of the transaction must be able to be found in the mempool.

This is not true.

There is no requirement that any transaction ever be in anybody's mempool.

Transactions often sit in the mempool while waiting to be included in a block, but they don't have to.
I was actually referring to UXTO instead, wasn't exactly very sober when typing this.
A transaction can be valid if the inputs are unconfirmed, though not neccesarily all the time.
That tells us nothing about how the validity is determined.
I was referring to jackg's post about how he phrased it.
Quote
These include:
Spending an input that has already been SENT and CONFIRMED by the network.
Other than that, the more confirmations you have, the harder it is to reverse it. Absolutely nothing to do with the validity.

I don't think there were any questions about reversing transactions. Please try to stay on topic.
Well, the first sentence and this is directed towards Reflector's statement which says that confirmations are needed for a transaction to potentially be valid.

wasn't exactly very sober when typing this.

In the future, please refrain from giving technical advice when you are not sober.  You are likely to cause more confusion and could result in causing someone to lose significant amounts of money.

Apologies, had just woken up from a tired day of studying at that time and didn't really check the whole post before posting. It wasn't my intention to provide anything misleading.

DannyHamilton
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September 14, 2017, 03:48:49 PM
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wasn't exactly very sober when typing this.

In the future, please refrain from giving technical advice when you are not sober.  You are likely to cause more confusion and could result in causing someone to lose significant amounts of money.

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September 16, 2017, 07:26:33 AM
 #9

Let's get back to the birth of BTC to make my question clearer. A the very first beginning, nobody was mining it. And then some miners get involved, first blocks of transaction were validated. At a point I guess, there were less than 20 miners. Where was the trust in the BTC network with such a small amount of miners ? They could agree together on how to store the transaction history and for example send all the BTC to one specific address. Any explanation would be greatly appreciated. Sorry if this question was silly....
That is absolutely possible. The value of a coin depends on the user's purchasing power and usage. Initially bitcoin also has low prices afterwards. Computer experts began to mine more. And they developed the BTC out of more and more convenient.

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