BTC.com Mines First Ever Block With Software Not Based on Satoshi’s Original Code

On March 13 the Bitcoin network experienced a historic event. During the early morning hours, the first block from an alternative client, not written in Satoshi’s original C++ code, was mined on the mainnet.

Also Read: Speculation Decreases Bitcoin’s Dominance in Cryptocurrency Markets

Block 457010: The First Block Ever Mined By Client Not Written In Satoshi’s C++ Framework

Just recently the mining pool BTC.com mined the first block ever written in an entirely different codebase. The alternative implementation of the bitcoin protocol named ‘Bcoin’ is written in node.js. Bcoin was built by developer Christopher Jeffrey, the Chief Technical Officer at Purse and former employee for Bitpay.

Bcoin’s codebase is written in javascript (node.js.) and claims to be an advanced fullnode implementation. The protocol was developed by Purse CTO Christopher Jeffrey two years ago.

Jeffrey is a long-time developer of open source code and has contributed to many different projects. Bcoin has been in development for almost two years, and the 1.0.0 beta version was released this past February. The alternative Bcoin implementation has been tested on the Bitcoin testnet and is currently used in production within the backend and wallet system at purse.io. However, this is the first time a mined Bcoin block was battle-tested on Bitcoin’s mainnet as stated by the miners on Github:    

We just made the first Bcoin block: 457010

Bcoin Gets Some ‘Battle Testing’ On Mainnet

Bcoin’s node.js. protocol offers full blockchain validation, runs natively in browsers and apps, includes SPV mode, wallet infrastructure, mempool/miner configuration, and is Bitcoind compatible among other features. Furthermore, the alternative client provides support for many BIP proposals such as BIP70, BIP150, BIP151, and BIP152. The alternative client allows developers to test and experiment with a multitude of applications and scaling methods. Many open source programmers believe various implementations can help decentralization and can also uncover errors within the dominant client.    

“Multiple implementations are also good for standardization; in a monoculture, the dominant software becomes the standard, giving the developers of the dominant software a higher degree of control over the future development of the protocol than was originally intended,” explained Ethereum developer Vitalik Buterin back in 2013. “If there is only one implementation, errors get uncovered later rather than sooner, and the result is a sort of Talebian ‘stability breeding its own instability.’”

A tantalizing tweet from the Twitter account @bcoinio.

Moreover, Bcoin also supports other integrations such as MAST, the Lightning Network, Segregated Witness and more. Purse and Bcoin creator Christopher Jeffrey say they open sourced the protocol “to accelerate the next generation of killer apps.” Following the first block mined not written in C++, Bcoin developer Christopher Jeffrey stated:

Up until now, bcoin in production usually just meant the chain, mempool, and wallet code. Excited to see that the mining code is finally getting some battle testing.

Bitcoin.com spoke with Purse founder Andrew Lee about the recently mined Bcoin block and he said he’s very pleased with Christopher Jeffrey’s accomplishment.

“It’s a pretty significant milestone in the path towards decentralized protocol development,” Lee told Bitcoin.com. “I’m very proud of Christopher and what we’ve built at Purse/Bcoin. With hostility and fatigue at an all time high, the event gives me hope that we can come to a resolution that doesn’t involve a chain split.”

Additionally, on the weekend of March 24, a Bcoin Hackathon will be taking place in San Francisco at the Hackreactor HQ. Attendees will hear from Bcoin developer Christopher Jeffrey, as well as build cryptocurrency applications with the chance to win three prizes – including a 1BTC award and a signed copy of “The Internet of Money” written by Andreas Antonopoulos.

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Bitcoin ETFs Unlikely For The Foreseeable Future

Rejections Likely for Upcoming Bitcoin ETFs

The SEC’s decision to disapprove the proposed rule change for Coin ETF last Friday was primarily based on the nature of the bitcoin markets. The Commission claimed that Bats BZX Exchange must “have surveillance-sharing agreements with significant markets for trading” bitcoin or its derivatives and that those markets must be regulated for the rule change to be consistent with the Exchange Act. However, since “the Commission believes that the significant markets for bitcoin are unregulated”, the two criteria are not met.

The chance that significant markets for bitcoin will be regulated in the near future, if at all, is slim. The wider Bitcoin community has already come to understand this, and expects the Commission to reject the proposed rule change for Solidx Bitcoin Trust, as evident in chat rooms and forums online.

Confirming the community’s expectation is former Needham analyst, who is now Head of Research at Blockchain Capital LLC, Spencer Bogart. Citing how the grounds for disapproval of Coin ETF “were related to the dynamics of the underlying bitcoin markets” as opposed to something specific in the ETF filing, he told Bitcoin.com that:

The odds of approval are very low for both of the other two Bitcoin ETFs.

Bogart, who is famous for estimating a sub-25 percent chance of Coin ETF being approved by the SEC, now says that the chance for Solidx Bitcoin Trust is “extremely low”, noting that it is “likely to be rejected on the same grounds”.

Very Little Anyone Can Do

Furthermore, Bogart believes that both NYSE Arca and Solidx Management LLC, which is the sponsor of Solidx Bitcoin Trust, can do “very little” to better the chance of Solidx Bitcoin Trust being approved. Bogart said that he did not think NYSE Arca has a better chance of getting its rule change approved than Bats BZX Exchange, adding that:

NYSE would need to enter into “surveillance-sharing” agreements with all the major bitcoin exchanges around the world and they would need to have a reasonable chance of regulatory action against any manipulative trading activity that is detected. Both are unlikely.

Future Prospect of SEC’s Approval

The SEC noted on Friday that, in the future, “regulated bitcoin-related markets of significant size may develop” enough for a Bitcoin ETF to be approved. However, Bogart believes differently, stating that:

I don’t see the SEC approving a Bitcoin ETF for the foreseeable future. I think any major bitcoin investment products will need to be launched in other jurisdictions.

On February 24, NYSE Arca filed the first amendment to its proposed rule change relating to the listing and trading of shares of Solidx Bitcoin Trust under NYSE Arca Equities Rules 8.201. The comments are due on March 16. When the chance of approval is very low, exchanges sometimes withdraw their proposed rule changes. At press time, NYSE Arca has not done so and the Solidx team did not immediately respond to Bitcoin.com’s request for comment.

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Bitcoin Block Size Growth Plan ‘BIP100’ Gets Update

Bitcoin developers Tom Harding, Dagur Valberg Johannsson and Jeff Garzik have updated the code to BIP100, a “dynamic maximum block size by miner vote” code proposal which has been in the works for nearly two years. The BIP (short for ‘Bitcoin Improvement Proposal’) could serve as a solution to the ongoing debate over Bitcoin’s block size.

Also Read: New Bitcoin Caching Features Could Improve Block Verification

A BIP represents a design document meant to introduce new features and information to the Bitcoin community. BIPs represent a central avenue for communicating ideas to the distributed Bitcoin community.

BIP100 Puts Miners First

Jeff Garzik

The BIP would theoretically allow miners to vote on what the block size limit should be. Mr. Harding believes that miners are actually more invested in Bitcoin than other participants in the peer-to-peer network, and thus better equipped to make decisions.

“They invest in hardware that cannot be used for anything else, and they are the one group that will always, every day, be paid in bitcoin and no other currency”, the Bitcoin developer says. “In the aggregate, miners’ stewardship of the protocol secures Bitcoin. This was Satoshi’s design and it has proven correct beyond all expectations”.

When he first read BIP100, Mr. Harding did not like it. “I believed in June 2015 that miners might manipulate the block size in ways that were not in the best interest of all users”, he tells Bitcoin.com. “But over the next two years, it was we developers who showed ourselves unable to manage the maximum block size reasonably”.

The text for BIP100 puts vivid emphasis on the miners. “Miners directly feel the effects, both positive and negative, of any maximum block size change imposed by their peers”, reads the proposal on Github. “Larger blocks allow more growth in the on-chain ecosystem, while smaller blocks reduce resource requirements network-wide”.

According to the Github proposal, miners act as an “efficient proxy” for the Bitcoin system since they earn bitcoins when they create blocks.

In order to be deployed, BIP100 needs to garner a considerable amount of support from miners. “A simple deterministic system is specified, whereby a 75% mining supermajority may activate a change to the maximum block size each 2016 blocks”, reads the proposal. “Each change is limited to a 5% increase from the previous block size hard limit, or a decrease of similar magnitude”.

Tom Harding

Among adopting nodes, there will be no disagreement on the evolution of the maximum block size, according to BIP100. “The system is compatible with emergent consensus, but whereas under that system a miner may choose to accept any size block, a miner following BIP100 observes the 75% supermajority rule, and the 5% change limit rule”, the proposal reads.

“Excessive-block values signaled by emergent consensus blocks are considered in the calculation of the BIP100 block size hard limit, and the BIP100 calculated maximum block size is signaled as an excessive-block value for the benefit of all observers”.

Carrots, Sticks and Speed Limits

BIP100 has been in the making for nearly two years. The proposal was published first by Mr. Garzik, who runs the enterprise blockchain firm Bloq, and who enjoys waxing about the intersection of artificial intelligence and Bitcoin.

“Economic actors that wish to see the speed limit [block-size limit] at X or Y – thus dictating the free market – will lobby the Chief Scientist and other ‘core’ developers, individually, in private, in public, with carrots, and with sticks”, writes Mr. Garzik in the draft for BIP 100. “When [the] Bitcoin market cap [grows 10 times] or more, the lobbying [will be] even more intense. Yet there is no single human or commitment on the planet capable of picking a good speed limit”.

Does BIP100 offer a tenable solution to Bitcoin’s growth issues? Let us know in the comments below.

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New Academic Paper Suggests Bitcoin is Resistant to State Control

A new academic paper, entitled “Bitcoin: Order without Law in the Digital Age”, explores the “fundamental structure” of Bitcoin. The paper seeks to show “how its decentralized order contrasts with currency regimes”. Highlighting how technology has changed our lives, the paper notes how – with the advent of Bitcoin – even modern currency is not exempt from the steady march of technological progress.

Also Read: Could Bitcoin Affect Emerging Market Monetary Policy? 

The paper highlights how bitcoin can “perform the functions of currencies without the traditional law of currency”. The paper also adds that Bitcoin’s global and distributed approach to order without law, as opposed to more spatially-close communities, is novel. “Order without some forms of law is nothing new”, the paper reads. “But previously most forms of order without law depended on relatively close-knit communities”. 

Technology Changes Central Bank Money

“Software is eating away even a function as basic as currency”, concludes the paper. “The digital revolution is evolving from a phenomenon that changed the way we communicate, to an era that is producing innovations that disrupt many of our preconceived notions of law and governance”.

The paper, penned by John O. McGinnis and Kyle Roche, does not suggest that bitcoin will replace the US dollar, but that the digital currency could change people’s ways of life.

“Bitcoin’s sustained success and growth is proof that it is changing the way individuals and societies exchange value”, the paper argues. Bitcoin is significant for both its own order without currency law and for establishing a platform to help sustain other forms of non-legal order, according to the paper.

More Resistant to State Control

Venezuela has slowly transformed into a poster child for oppression against Bitcoiners.

“Bitcoin represents a potential third currency regime far more resistant to state control, because it is minted in no physical place, operates under encryption, and places a numerical ceiling on the number that can be created”, according to the paper’s abstract. “The trust required is not in any government but in the decentralized order of those who verify Bitcoin transactions”. Bitcoin has advantages over other currencies.

“As the Bitcoin ecosystem continues to grow, its non-legal order can help it climb the rungs of stability created by distrust in government”, state the authors. “Bitcoin’s order without currency law will facilitate other forms of order with less law”.

The Internet could provide an example of how technology disrupts longstanding institutions.

“Like the Internet, Bitcoin is multijurisdictional, and thus one sovereign cannot shut it down”, notes the paper. “Miners can move elsewhere and people can use it elsewhere. Additionally, if Bitcoin proves to be popular and widely used, its advocates will make it difficult for governments to shut down even within personal jurisdictions”.

Competition to State Issued Currencies

The paper surmises that, in certain nations, bitcoin could function as competition to fiat currencies.

“Central banks have often proven incapable of binding themselves to their redemption promises”, the authors suggest. “Their public law monopoly status gives them immunity from the legal and marketplace sanctions that ordinarily prevent commercial banks from reneging on their commitments”.

Additionally, central banks do not need to fear losing customers. Central banks can thus pursue policies that are not in the best interest of the public. Thanks to Bitcoin, citizens who have little trust in their nation’s currency regime are free to consider bitcoin. However, as reported first by Bitcoin.com, hyper-inflationary Venezuela has seen instances of government crackdown on Bitcoin users, lending credence to the claims made in the academic paper.

“Bitcoin’s greatest advantage over such state-issued currencies is that it has no political master to serve”, the paper reads. “Bitcoin grants an option to citizens of monetarily oppressive regimes to transact in something other than their state-issued currencies. In fact, we are already seeing Bitcoin gaining market share in transactions in nations such as Cyprus, Argentina, and China, where citizens have reason to doubt the value of the national currency”.

Bitcoin, the cyberpunk underground and not the product of legal institutions, is historically unique in this respect.

“Until recently, there has been no widespread currency that has been the creation of something other than legal regimes”, according to the authors.

Do you use Bitcoin for political or central bank motivated reasons? Let us know in the comments below.

Images courtesy of Shutterstock

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Antpool Points 75% Hashpower at BU, While Exchanges Confirm Listing a Split

According to reports, the large mining pool Antpool which commands 16.6 percent of the global hashrate is currently switching its mining configurations to support Bitcoin Unlimited. Meanwhile, popular bitcoin exchanges discuss listing another token in the event of a chain split. 

Also Read: Could Bitcoin Affect Emerging Market Monetary Policy? 

Antpool Dedicates 75% Hashrate Towards Bitcoin Unlimited

Over the past couple of months, the Bitcoin network scaling debate has intensified. Moreover, rather than just discussions taking place, many Bitcoin proponents are taking action with various ideas that theoretically could scale the decentralized currency.

For instance, people have proposed a user-activated soft fork (UASF) because Segregated Witness (Segwit) support has stalled. The idea has become popular amongst Segwit supporters and seems to be gaining traction with the proposal being pushed to Github. On the other hand, there are those who support Bitcoin Unlimited (BU) which will essentially increase the block size. Just recently Bitmain Tech founder Jihan Wu told the publication Bloomberg, “We will switch our entire pool to Bitcoin Unlimited.”    

On March 7 Antpool began signaling for BU, initiating a small percentage of its hashpower to support the alternative client. Ten days later, on March 17, the Chinese mining pool kicked it up a notch as reports reveal nearly 75 percent of Antpool’s hashrate is dedicated to BU. The author of the report explains the switch using a table from blocks 450000 to 457678. Reddit user “arnoudk” states:  

Antpool has just switched its usa3 nodes. Yesterday, it switched its usa1 nodes. Last week, it switched all of its Beijing nodes. In total, approx 75 percent of Antpool’s hashrate is now counting towards BU, and the remainder is voting neutral (No BU, no Segwit).

The Coinbase and Bitcoin Unlimited Meeting

Another interesting event this week was a meeting between Bitcoin Unlimited developer Peter Rizun and Coinbase staff. Rizun explains that exchanges and wallet companies like Coinbase support bigger blocks because “they have a fiduciary duty to preserve the assets of their customers.” Additionally, if a minority chain token arises Coinbase will support the chain, and allow the market to choose naturally. However, the exchange would prefer that the minority chain dies quickly in order to avoid market complexity.

Rizun also details the San Francisco-based company’s biggest concern is a replay attack, an issue Coinbase dealt with during the Ethereum hard fork. A replay attack is when a valid transmission is manipulated, fraudulently repeated or delayed resulting in exchange losses. Coinbase representatives also established that they would like to see more quality analysis from BU’s production releases.

“Two ideas mentioned were: (a) an audit of the BU code by an expert third-party,” explains BU developer Peter Rizun. “And (b) the use of “fuzzing tests” to subject our code to a wide range of random inputs to look for problems.”

Overall, things seem to be moving forward for BU after last week’s debacle with core developers. BU nodes have recovered, and mining support for the proposal is currently at 32.5 percent at the time of writing. Additionally, it’s been reported that 18 other popular cryptocurrency exchanges will list Bitcoin Unlimited in the event of a chain split. The replay attack is also mentioned in the participating exchanges’ statement as a primary concern.

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Bitcoin’s Other Scaling Problem

Although many Bitcoiners subscribe to laissez-faire political and economic beliefs of the libertarian variety, some “invisible politics” has reared its ugly head in the ‘Bitcoin Community’ thanks to the digital currency’s scaling issues. The growth of Bitcoin has created a variety of social governance problems that have left many in the ‘Community’ confused.

Also Read: Bitcoin Block Size Growth Plan ‘BIP100’ Gets Update

Bitcoin Governance

While focus has been largely on scaling Bitcoin at the technical level to make room for increasing transaction demands, the distributed governance of Bitcoin itself has proven difficult.

“There are two types of governance. Governance of a specific software project and governance over consensus rules,” submits Eric Lombrozo, Bitcoin developer and CEO of Ciphrex. “For historical reasons, the two have been conflated in the minds of many people.”

Mr. Lombrozo suggests problems could manifest in several ways.  “Governance over a particular software codebase doesn’t require universal agreement over all changes as long as it remains compatible with the existing network,” he says. “It’s only when compatibility is broken that it creates issues that affect everyone in the community.”

Further adding questions to Bitcoin’s social issues, when former Bitcoin developer Mike Hearn left Bitcoin for R3CEV, he lamented how Bitcoin had become “completely controlled by just a handful of people.”

Benevolent Dictator?

Critics have claimed Bitcoin needs a “benevolent dictator” to expand and onboard an increasing number of transactions. “Someone, or some group, must decide how to meet users’ requirements,” Reuters reported on the opinions of some in the Bitcoin space.

Cornell Computer Science professor, Dr. Emin Gun Sirer, cites Ethereum, a blockchain smart contract model, and its “benevolent dictator model” as a working example of distributed governance.

Vitalik Buterin, Ethereum founder and main programmer, in effect holds controlling decision-making power over that open-source creation community, some say (even though those who disagreee can fork the network).

Mr. Buterin has defended this model. “Over the last couple of years it’s become apparent that having a static protocol is just not a viable approach,” Buterin said at a blockchain conference. “Software has to evolve … and there has to be some mechanism for agreeing on how software is going to upgrade.”

Mr. Lombrozo points out, however, that Ethereum’s ‘benevolent dictator’ could not stop a split in the Ethereum blockchain, resulting in an duplicate version dubbed ‘Ethereum Classic.’

Gavin Andresen, Bitcoin’s former Chief Scientist, has discussed in YouTube videos how Bitcoin has evolved from a similar model after pseudonymous founder Satoshi Nakamoto’s departure.

“If you go back in history, it was really simple. It was whatever Satoshi decided at the beginning. That’s really where we started. We had one source code. We had one [pseudonymous] person who made all the decisions about what should Bitcoin be, how should it evolve, and what should it do,” he said.

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Bitcoin Could Face Ethereum-Style Split

Loss of public trust and utility, branding issues, a market capitalization crash, and a collapse of trust in the entire crypto-currency space. A contentious Bitcoin hard fork, which represents a change to the Bitcoin protocol requiring all nodes to update, could indeed result in two Bitcoins. Exactly this – a split network – happened in the wake of Ethereum’s choice to hard fork after the $56 million hack of the DAO, a decentralized investor-directed venture capital fund on Ethereum.

Also Read: Charlie Lee: “People Don’t Understand Segwit”

Hard Fork Could Lead to Duplicate Bitcoin Network

Not only might perceptions of Bitcoin suffer in the case of a Bitcoin fork, but so too could Bitcoin’s use-case as electronic cash. The issue of scaling Bitcoin has certainly been contentious, and if a fork is initiated with considerable opposition, there could be proponents claiming both versions of Bitcoin are the real one.

In a recent Medium post entitled A Fork in the Road, Bitcoin entrepreneur CEO Vinny Lingham highlights how, at least in the short-to-medium term, a network split would impact Bitcoin negatively.

“If a split is portrayed badly in the media and creates confusion, we will possibly go into another 2 years of sideways and down,” wrote Mr. Lingham on March 15. “Do we have that much time again with other competitors on the heels? And let’s be frank, a Hard Fork is not Bitcoin dying. It’s Bitcoin duplicating. Now we have two Bitcoins, both won’t die, maybe one will. Which one is the real Bitcoin? Do not underestimate how many enemies Bitcoin has — a fork will just give them all the ammunition they need to confuse the market”.

Bitcoin exchanges have recently unveiled their contingency plans if Bitcoin splits in the wake of a hard fork, which involves them listing the duplicate Bitcoin on their exchanges as an alternative crypto-currency.

Before the Ethereum DAO hard fork, many believed that a minority chain in the case of a split would cease to persist. When the hard fork took place, an alternative blockchain to the original Ethereum deployment persisted (by some miners’ choice to stay with that chain), which itself claimed to be the original Ethereum. It called itself “Ethereum Classic” (ETC). Trading of ETC rivaled that of Ethereum (ETH) immediately after the split.

“There are some people who dismiss this problem in the Bitcoin community,” acknowledges the Ethereum Classic project coordinator who only goes by Arvicco. “But they are wrong to do so.”

An important aspect for any digital currency is its scarcity, which acts as an economic incentive for people to use a certain blockchain. If digital currencies risk splits, then their value is undermined. “Creating two networks destroys network effect,” Mr. Lingham suggests.

A Future with Many Bitcoins?

To the surprise of many, the Ethereum network split into two after a hard fork.

Wonders Arvicco: “If there is one Bitcoin with a 21 million coins limit today, and two Bitcoins with 42 million coins tomorrow, what prevent us from having 64 Bitcoins with 1.2 billion coins a few years from now?”

In another technical twist, if there were such a split as happened in the case of ETH and ETC, all bitcoin holders would have an equal amount of BTC and (theoretical) BUTC post-split. After the Ethereum split, cross-fork trading spiked between it and ETC, leading some to believe the same would happen in the case of a Bitcoin split.

As happened on Ethereum and Classic, this could result in cross-chain transaction replay. Transaction replay happens when transactions on one chain are replayed on the other chain, moving both types of coins.

“Imagine that as a result of fork, you got both Bitcoin (Core bitcoins) and BUTC (Bitcoin Unlimited bitcoins) on the same addresses,” explains Arvicco. “Now, you want to pay for something with BTC, but to your surprise the same amount of BUTC is also moving to the seller’s address, even though they were not supposed to.”

Another example would be if one wanted to get rid of their BUTC via an over the counter transaction. You get the payment and transfer your BUTC to the buyer. But, the ‘core’ bitcoins from the same address are also sent. This could damage user confidence and diminish the use-case for on-chain transactions.

Whereas Ethereum’s replay problem was mostly dealt with via ‘splitter’ contracts designed to separate ETH from ETC, Bitcoin does not have the scripting capabilities to deploy such contracts.

“The only practical way to mitigate the issue would be mixing the legacy coins with post-fork mined coins of different flavors, either BTC or BUTC,” he says. 

Developers could introduce incompatible transaction formats, which could preclude a second hard fork – this was the solution used on the ETH/ETC networks. Replay protection could also be introduced simultaneously with the first fork, but this option is not being publicly discussed by developers.

“In practical terms, both networks would be hardly usable for some time after a fork due to replay attacks,” believes Arvicco. “For normal users, it will be problematic to gain the knowledge how to protect themselves from it, so they’ll probably stop using the network altogether.”

Splitting Coins is Not Hard, for Some

Bitcoin Unlimited could trade under its own ticker post-split.

Many people are not worried about a split, including Bitcoin developer Peter Todd. “It’s easy to split Bitcoins via nLockTime, as the exact height of the different chains will definitely be different,” says Mr. Todd on Reddit. “I’ve been asked by two or three exchanges to evaluate their plans to do exactly that. IIRC one had invented the technique themselves, and one or two others I suggested it to them.”

But, while splitting his BTC from his BUTC via nLockTime might be easy for longtime Bitcoin developer Peter Todd, this might not be so for the common bitcoin user.

What are your thoughts about a potential Bitcoin split? Let us know in the comments.

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