Libbitcoin consensus theory
Eric Voskuil is a veteran Bitcoin developer and one of the lead maintainers of Libbitcoin, the first implementation of the Bitcoin source code. He also founded the CryptoEcon professional conference, which took place in Hanoi, Vietnam, in early The topic of funding Bitcoin development is important. Some companies will hire a Bitcoin dev, some won't.
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Libbitcoin consensus theory
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Content:
- Is Bitcoin safe? In-depth exploration of Bitcoin’s security model
- Mastering Bitcoin
- Competing with Bitcoin Core
- Cryptoeconomics
- Implementing a blockchain from scratch: why, how, and what we learned
- Bitcoin Governance: A Unique System That Serves Decentralization
- Waiting for Dark: Inside Two Anarchists' Quest for Untraceable Money
- Consensus 2021: 7 Questions for Bitcoin Anarchist Eric Voskuil
- Proof of Work Fallacy
Is Bitcoin safe? In-depth exploration of Bitcoin’s security model
We also discuss some common misconceptions and explain that if the Bitcoin Core repository becomes hijacked by nefarious actors or deleted, Bitcoin should be largely unaffected. One can categorise competing software projects with Bitcoin Core into three different groups:. Indeed if one does a software fork of Bitcoin Core and changes the consensus rules, most of the code is still likely to be written by the same development team, so it is not really competing against the team, but potentially launching a new coin whose code was written by that same team.
Like the above form of competition, many consider this form of competition risky, as it may increase the chance of unplanned chain splits, caused accidentally by different consensus rules. The alternative client needs to match the consensus behaviour of the software users currently run, even matching bugs or unintended behaviour in the majority client.
We are not going to repeat all those arguments in this report, where the primary purpose is to articulate the different types of competition.
Competition over the rules is far less likely to cause significant disruption than many people think. In reality large businesses and the community will quickly rally behind one coin and change the client they run to follow the economic majority or hashrate majority.
If the change in the rules is a softfork as opposed to a hardfork , it may be possible to prevent a chainsplit if the majority of miners upgrade. The debate on competing independent implementations. The network would therefore become more resilient. Diversity of the clients users run is therefore a key strength. So much of the design depends on all nodes getting exactly identical results in lockstep that a second implementation would be a menace to the network.
The MIT license is compatible with all other licenses and commercial uses, so there is no need to rewrite it from a licensing standpoint.
A second version would be a massive development and maintenance hassle for me. If the second version screwed up, the user experience would reflect badly on both, although it would at least reinforce to users the importance of staying with the official version. If someone was getting ready to fork a second version, I would have to air a lot of disclaimers about the risks of using a minority version.
Source: Bitcointalk. Therefore a better plan may be to have one dominant implementation which is highly scrutinized, to keep consensus bugs to a minimum. This way the network may be reliable. The competition can simply be in the white area, outside of the circles in the above venn diagram. This form of competition, which neither initiates a deliberate change to the consensus rules nor re-implements the code, is not controversial at all, as far as we can tell.
Therefore in theory Bitcoin never needs to suffer from the apparent problems of who controls a particular software repository in Github or arguments over who has commit access to the repository.
In our view, many of these apparent problems are based on a misunderstanding, by people who appreciate some of the risks of competing software projects, but fail to distinguish appropriately between the different types of competition. Therefore many seem to overestimate the power of the Bitcoin Core software repository, thinking that any competition is risky or somehow unacceptable.
Prior to , there was no software project named Bitcoin Core. There was some discussion about renaming Bitcoin-Qt and the reference implementation in general in IRC today; I thought some of you smart people might have good name ideas.
Oh good, about time. This has irritated me for a while. How about Bitcoin Core? Source: Bitcoin Foundation Forum. During the blocksize war, many characterised the debate as being Bitcoin Core vs miners or large businesses, with the Bitcoin Core side opposing hardforks and blocksize limit increases.
In our view the characterisation was mostly incorrect. However, many who made this characterisation then subsequently concluded that Bitcoin Core won, since there was no hardfork. This same group therefore currently overestimate the power of Bitcoin Core, in our view.
The rules are defined by the clients economically significant users currently run. These are typically previously released versions of Bitcoin Core. The Bitcoin Core software project cannot change what software users are running and the users are a lot more independent minded than many people think, in our view.
Even if Bitcoin Core had released a hardfork client, which increased the blocksize limit, it is not clear if the community would have upgraded. Therefore concerns about the Bitcoin Core software repository becoming deleted, hacked or hijacked should be far less of an issue than many people think. If this happens it will not affect clients users are already running and if further upgrades or improvements are needed, one can simply switch to a different repository or many different repositories, without worrying about any coordination problem or other risks.
Actually, in the summer of , in some ways, a client competing with Bitcoin Core, Bitcoin UASF, overthrew Bitcoin Core and deliberately changed the networks consensus rules. Therefore, concluding that Bitcoin Core is all powerful, is the wrong lesson to learn from the blocksize war. Since it is a software fork of Bitcoin Core, it carries none of the risks of not being bug for bug compatible, like Satoshi was concerned about.
Therefore, if the Bitcoin Core repository gets hijacked or deleted, the codebase can still improve using the Bitcoin BitMEX Research client or any other set of clients. Following the resolution of the blocksize war, there is too much emphasis on the power of the Bitcoin Core software repository. In our view, these questions may illustrate one is missing the point of Bitcoin. Prior to and during the blocksize war, many thought it was miners, large businesses or Gavin Andresen.
One of the unexpected negative consequences of that war is that many seem to have switched their opinions to believing Bitcoin Core is incharge, an equally flawed view. The truth is, as hard as it is to appreciate, end users are ultimately in charge of Bitcoin. Of course this could be unrealistic, in reality, ASIC manufacturers, large mining farms, developers, large custodians, large exchanges and even an individual software repository are highly influential.
We may be idealistic in saying that users are ultimately in control. BitMEX offers a variety of contract types. All contracts are bought and paid out in Bitcoin. If it is determined that any BitMEX user has given false representations as to their location, incorporation, establishment, citizenship or residence, or HDR detects a user is from a Restricted Jurisdiction as described above, HDR reserves the right to immediately close their accounts and liquidate any open positions.
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Sign in. Log into your account. Password recovery. BitMEX Blog. Forgot your password? Get help. This includes both hardforks and softforks. Running such software can be considered risky in certain circumstances, as it can split the coin into two chains. Competition between independent implementations This form of competition occurs when Bitcoin is re-implemented without using the code from Bitcoin Core.
Typically a new coding language is used; to try to capture some advantages other languages may have. Other competing software projects which neither change the consensus rules nor re-implements the codebase One can compete with Bitcoin Core by neither trying to change the consensus rules nor by writing a new independent codebase. One can do this by creating a software fork of the project and then making only non consensus changes.
This type of competition does not share many of the risks mentioned above. In favour of competition Opposed to competition Competition over the rules should be encouraged, since this ensures the coin is flexible and able to adapt and compete.
The model of the status quo ruleset always prevailing mean that the rules may never change, even when the case is highly compelling, as in this contentious environment a minority will always oppose any change.
It is best to try to avoid competition over the consensus rules, as doing so is risky and damages the stability of the coin. In the event of a dispute, the existing consensus rules should prevail, this keeps the existing rules of the coin, such as the 21 million cap robust, a key and unique property of Bitcoin.
The disruption which can be caused by changing the consensus rules without widespread agreement, is therefore a highly desirable characteristic of Bitcoin. Changing the consensus rules should therefore occur in one of the following two ways: With widespread agreement across the community of coin users and technical experts.
Sufficient time must also be given for users to upgrade their clients If developers are unsure if a sufficient number of users will upgrade to the new rules, this could result in the launch of a new coin.
In favour of competition Opposed to competition Although one dominant implementation may protect the network from unexpected consensus bugs, it may leave the coin exposed to certain types of critical bugs, such as bugs which caused clients to crash or allow unexpected coin inflation to occur.
A recent example of this is CVE, a critical inflation bug only discovered in September Then in February , Gavin Andresen, a prominent Bitcoin developer, posted to the Bitcoin Foundation forum asking: There was some discussion about renaming Bitcoin-Qt and the reference implementation in general in IRC today; I thought some of you smart people might have good name ideas. Mike Hearn, another developer, then responded: Oh good, about time.
Conclusion Following the resolution of the blocksize war, there is too much emphasis on the power of the Bitcoin Core software repository. Share on. Platform Status. View Status Page. Crypto Trader Digest:.
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Mastering Bitcoin
We now offer a necessary follow-up on Bitcoin governance, by uncovering the decision making process for the top cryptocurrency. Bitcoin is the first example of a technology based on distributed, trustless consensus, where decisions typically revolve around network access, funding allocation, block size, reward systems, voting and transaction reversibility. Because of its distributed and decentralised nature, the Bitcoin ecosystem is shaped by various actors including mining pools, node operators, users, developers, exchanges, custodians and wallet providers. Even the media and advocacy groups have their say and these forces ultimately decide all together over critical governance issues either by reaching a consensus or by forking.
Competing with Bitcoin Core
Your understanding of censorship resistance is gravely mistaken [1]: Overcoming censorship is not possible in a PoS system, as the censor has acquired majority stake and cannot be unseated. As such PoS systems are not censorship-resistant and the theory is therefore invalid. Conversely, in Proof of Work systems, new miners could join the network at any time to challenge the majority miner censor. That is simply impossible under a Proof of Stake model with network censors. In addition to being vulnerable to total censorship, Proof of Stake consensus suffers from the misfeature of not even having a quantitative fork ranking protocol — i. Under adversarial conditions, the PoS chains pos1, pos2, and pos3 cannot be quantitatively ranked by hashing power the way the PoW chains pow1, pow2 and po3 could be, as there is no hashing power in PoS. Jude C. Nelson, who has a PhD in distributed systems from Princeston, critiques PoS better than anyone [2]: PoW requires less proactive trust and coordination between community members than PoS -- and thus is better able to recover from both liveness and safety failures -- precisely because it both 1 provides a computational method for ranking fork quality, and 2 allows anyone to participate in producing a fork at any time.
Cryptoeconomics
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Implementing a blockchain from scratch: why, how, and what we learned
Merchants purchase mining services that meet their rules for a satisfactory fee. There is a theory that mining services are subservient in this trade. This subservience is sometimes described as "asymmetry" or "users rule". This theory leads people to believe that mining can be strongly pooled as long as merchants are not centralized , as the economy can control the behavior of mining, rendering the system secure. The consequence of this invalid theory is complacency regarding the insecurity caused by pooling.
Bitcoin Governance: A Unique System That Serves Decentralization
Make no mistake. We are witnessing a high-stakes protocol standards battle play out in real time. But it also battles with itself as divergent forces push for either on-chain scaling or off-chain scaling, hard fork or soft fork , SegWit transaction format or original transaction format. Chronic forking is not synonymous with wealth management and prudent capital accumulation, which require stability and predictability. Importantly, smart contracts and non-monetary applications will also rely upon relative stability since the same native digital token also facilitates the proof-of-work security model. This article will examine how open-source governance was designed to work within the Bitcoin protocol and how users, miners and developers are locked in a symbiotic dance when it comes to potential forks to the immutable consensus. Solutions will be proposed and analyzed that maintain the decentralized nature of the resulting code and the blockchain consensus, while still permitting sensible protocol upgrades. Governance is not only about the particular method of change-control management, but also about how the very method itself is subject to change.
Waiting for Dark: Inside Two Anarchists' Quest for Untraceable Money
Connect and share knowledge within a single location that is structured and easy to search. Questions about the supply side of crypto-currencies including the rate and mechanisms by which coins are made available or unavailable in the economy and the affect of the money supply on the value and usefulness of currencies. Stack Overflow for Teams — Collaborate and share knowledge with a private group.
Consensus 2021: 7 Questions for Bitcoin Anarchist Eric Voskuil
RELATED VIDEO: 1.4 Conflict vs. ConsensusSearch icon An illustration of a magnifying glass. User icon An illustration of a person's head and chest. Sign up Log in. Web icon An illustration of a computer application window Wayback Machine Texts icon An illustration of an open book.
Proof of Work Fallacy
People often have disputes when discussing the consensus mechanism of different cryptocurrencies, mainly because they lack an understanding definition of the security models used by these cryptocurrencies to protect historical data in the ledger. Although the security model of each consensus mechanism is designed to prevent various theoretical attacks, it is important to understand the purpose of these models. The security model can be divided into two parts: assumptions and guarantees. If the assumption used as an input holds, the guarantee of the output of the safety model should also hold. Distributed ledgers are designed to provide an orderly record of events, because in a distributed system you cannot simply trust timestamps. When a new participant first joins a blockchain network, it will download all available blocks starting from the genesis block hard-coded in the software, and then verify the validity of the entire blockchain. One of the most important assumptions of the Bitcoin security model is that the vast majority of miners are honest — they are trying to protect the security of the blockchain, not trying to break it.
There's also live online events, interactive content, certification prep materials, and more. Mining is the process by which new bitcoin is added to the money supply. Mining also serves to secure the bitcoin system against fraudulent transactions or transactions spending the same amount of bitcoin more than once, known as a double-spend. Miners provide processing power to the bitcoin network in exchange for the opportunity to be rewarded bitcoin.
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