Bitcoin, Cryptocurrency and Blockchain Discussion Thread

[willow_hiller]

I don't invest in BTC, and I'm not planning on opening a position, but I'm curious what folks here think about the potential double-spend yesterday. I read this article on the matter: Unpacking Bitcoin's Recent "Double-Spend" Event | Crypto Briefing

I find it a bit weird that CryptoBriefing discounts the possibility of an entity orchestrating a double-spend as unlikely because it would be costly:

Moreover, panic regarding possible double-spend attacks in the future has little basis. According to Dorier, the cost of conducting such an attack is in the millions.

But surely the cost of orchestrating a double-spend is irrelevant, because if you can consistently pull it off you could literally duplicate money.

 

[thx1139]

What am I missing with crypto currencies. How can something that is so volatile be a valid currency. Seems pricing of items would be crazy and being paid in bitcoin could be great or awful. I dont get it.

 

[Xepa777]

I don't invest in BTC, and I'm not planning on opening a position, but I'm curious what folks here think about the potential double-spend yesterday. I read this article on the matter: Unpacking Bitcoin's Recent "Double-Spend" Event | Crypto Briefing

I find it a bit weird that CryptoBriefing discounts the possibility of an entity orchestrating a double-spend as unlikely because it would be costly:



But surely the cost of orchestrating a double-spend is irrelevant, because if you can consistently pull it off you could literally duplicate money.

This is FUD the same way "battery cars are more likely to catch on fire right?" FUD.

This transaction is invalid. An accidental, conflicting transaction occurring during a regular re-org is not a double-spend. A double-spend is a specific kind of attack with intent to defraud. Even as far back as Chaum et al.'s '88 paper describing "repeat spender" detection, it's implied the concept is only relevant to an intentional attempt to re-spend the same currency token.

Here is what happened.

• Someone broadcast a TXN (T1)
  
  
• Rebroadcast same TXN but with different fee amount (T2)
  
  
• Simultaneously 2 competing pools solved PoW at same time
  
  
• Pool1 confirmed T1
  
  
• Pool2 confirmed T2
  
  
• Pool1 won. T2 marked as invalid.
  

This is literally how Bitcoin is designed to work. There is no "error", there is no "oh no!". Its why people have always said "wait for a few confs before accepting it". The vigor that this story is being pushed makes me think its a FUD campaign.

Also, one of the best Bitcoin thesis summaries I've seen on the internet here, from the Winklevoss Twins. Highly suggest everyone read this.

The Case for $500K Bitcoin

 

[willow_hiller]

This is literally how Bitcoin is designed to work. There is no "error", there is no "oh no!". Its why people have always said "wait for a few confs before accepting it". The vigor that this story is being pushed makes me think its a FUD campaign.

Thanks for the explanation. I'm not trying to spread any misinformation, just trying to gain an understanding.

That makes sense that conflicting transactions can arise when made/confirmed simultaneously, and it also makes sense that eventually the conflicts will be reconciled by a consensus of the distributed ledgers.

What doesn't make sense to me is why it takes 10 minutes for the conflicts to be resolved. Can that time be reduced, or is it baked into the ecosystem?

 

[heltok]

What am I missing with crypto currencies. How can something that is so volatile be a valid currency. Seems pricing of items would be crazy and being paid in bitcoin could be great or awful. I dont get it.

If you want your crypto holding to be denominated in something else, like USD, gold, tsla etc, just hold USDT/dai/tsla until you need to spend it. But then you will get inflated like USD and would have missed the 6M x increase over the last decade.

Most crypto people invest into crypto, then when they need to spend money, they take money from their investment. Sometimes the investment is up, sometimes it’s done, but in the end it’s still a part of your networth.

 

[heltok]

What doesn't make sense to me is why it takes 10 minutes for the conflicts to be resolved. Can that time be reduced, or is it baked into the ecosystem?

It takes 10min on average* for 1 confirmation. Sometimes less, sometimes much more. To be really safe wait 6 confirmations. It’s all about probabilities, but at 1 conf I feel safe enough.

The 10min number was set by satoshi. He could have choosen a different number, other cryptos have different numbers. If this is changed(it can be) it is no longer Bitcoin but would be a new fork. Feel free to fork Bitcoin if you want, but good luck convincing everyone to follow your chain!

Ethereum have changed the number a few times between 17s to 13s. It might go a lot lower soon.

*(because of increased hashing power, between adjustments in can be lower)

 

[willow_hiller]

It takes 10min on average* for 1 confirmation. Sometimes less, sometimes much more. To be really safe wait 6 confirmations. It’s all about probabilities, but at 1 conf I feel safe enough.

Cheers. And it's my understanding that many of these transactions are essentially scripted contracts, right? How often are they scripted to reverse in a logical fashion when one or more transactions come into conflict and are resolved?

For e.g. person A has a wallet with 0.1 BTC, and manages to transfer 0.1 BTC to person B and person C in such a fashion that both transactions are confirmed simultaneously. Person C now believes they have 0.1 BTC in their wallet (and for all intents and purposes they do until the conflict is resolved) and creates subsequent transactions based upon that. Do all of Person C's transactions reverse when the original A to C transaction is voided? Can Person C's wallet balance go negative?

 

[heltok]

Cheers. And it's my understanding that many of these transactions are essentially scripted contracts, right? How often are they scripted to reverse in a logical fashion when one or more transactions come into conflict and are resolved?

For e.g. person A has a wallet with 0.1 BTC, and manages to transfer 0.1 BTC to person B and person C in such a fashion that both transactions are confirmed simultaneously. Person C now believes they have 0.1 BTC in their wallet (and for all intents and purposes they do until the conflict is resolved) and creates subsequent transactions based upon that. Do all of Person C's transactions reverse when the original A to C transaction is voided? Can Person C's wallet balance go negative?

It’s a ledger. He cannot send the same balance to both addresses in the same block, one transaction will fail.

What happens with double spends is that one chain becomes the longest for a few blocks, but then another chain catches up. This requires immense mining power and would be very costly and be very obvious. If 51% of hashing power was attacking Bitcoin and accomplishing this Bitcoin would die and a fork with a different hashing algorithm would continue from the same ledger.

 

[willow_hiller]

He cannot send the same balance to both addresses in the same block, one transaction will fail.

I thought that was what happened yesterday. Although it seems to have been accidental, and a really small probability of two blocks being mined simultaneously containing transactions from the same address.

On Jan. 20, at Bitcoin block height 666833, mining pools F2Pool and SlushPool both mined a BTC block simultaneously. The Bitcoin blockchain adds blocks one-by-one. Thus, only of them was eventually added to the major chain.

For ten minutes, nevertheless, transactions in both blocks showed confirmation.

A transaction from one set of addresses showed in both blocks with outputs of 0.00062063 and 0.00014499 BTC (total 0.00076562 BTC). The sending addresses had a total of 0.00071095 BTC only.

Hence, the input address received more Bitcoin than the sender held in the wallets.

 

[willow_hiller]

I thought that was what happened yesterday.

Alright, found a good explanation in a rather long twitter thread: https://twitter.com/aantonop/status/1352258125932371968

I like the explanation that confirmation of a transaction in a distributed system is probabilistic, with the probability approaching 100% as additional blocks are added. So waiting for 1 conf is like a 95% certainty.

 

[Klaas]

Bitcoin message blok 666.666
Bitcoin: a biblical message at block 666,666

 

[thx1139]

If you want your crypto holding to be denominated in something else, like USD, gold, tsla etc, just hold USDT/dai/tsla until you need to spend it. But then you will get inflated like USD and would have missed the 6M x increase over the last decade.

Most crypto people invest into crypto, then when they need to spend money, they take money from their investment. Sometimes the investment is up, sometimes it’s done, but in the end it’s still a part of your networth.

Thats an investment not a currency. A currency needs to be far more stabile. Suppose I agree to be paid in a cryptocurrency and my rent is due a couple days later. I got paid last Friday and my rent was due today and rent is US dollars.

 

[TMThree]

This is FUD the same way "battery cars are more likely to catch on fire right?" FUD.

This transaction is invalid. An accidental, conflicting transaction occurring during a regular re-org is not a double-spend. A double-spend is a This is literally how Bitcoin is designed to work. There is no "error", there is no "oh no!". Its why people have always said "wait for a few confs before accepting it". The vigor that this story is being pushed makes me think its a FUD campaign.

yep. That's why you wait for a few confirmations. Which is also why BTC is considered slow for transactions. I wouldn't want to use it at a point of sale.

 

[MXWing]

Thats an investment not a currency. A currency needs to be far more stabile. Suppose I agree to be paid in a cryptocurrency and my rent is due a couple days later. I got paid last Friday and my rent was due today and rent is US dollars.

We can decide when to lock in the amount of BTC and how much variance each way is acceptable.

Anything even Pokémon cards can be used as currency.

 

[heltok]

Thats an investment not a currency. A currency needs to be far more stabile. Suppose I agree to be paid in a cryptocurrency and my rent is due a couple days later. I got paid last Friday and my rent was due today and rent is US dollars.

If you cannot handle the swings then invest less in Bitcoin and more into some stable coin.

Everyone has a different risk tolerance, many people are okay with the swings in crypto and use it as investment/currency interchangeable. Some people prefer to only use it as a currency, some as an investment. If you really want a specific use case there probably is a way to accomplish it as it is Turing complete.

 

[MXWing]

If you cannot handle the swings then invest less in Bitcoin and more into some stable coin.

Everyone has a different risk tolerance, many people are okay with the swings in crypto and use it as investment/currency interchangeable. Some people prefer to only use it as a currency, some as an investment. If you really want a specific use case there probably is a way to accomplish it as it is Turing complete.

Or if someone is so skittish about buying the “top” they can take a 10K investment and average in over 10 tranches.

No argument on if they underpaid or overpaid.

Weird as heck how ev owners and investors are so scared about technology.

 

[willow_hiller]

Weird as heck how ev owners and investors are so scared about technology.

To be fair, buying BTC is less like buying TSLA and more like buying a fleet of Cybertrucks in anticipation of robotaxis. It's an investment in the technology itself, rather than an investment in an entity creating the technology.

 

[MXWing]

To be fair, buying BTC is less like buying TSLA and more like buying a fleet of Cybertrucks in anticipation of robotaxis. It's an investment in the technology itself, rather than an investment in an entity creating the technology.

When it's proven and beats Gold as an asset class, it's going to be a million per coin and people will switch to Satoshis as unit of measure.

I think anyone who doesn't go at least 1% of their portfolio into BTC is a fool. The risk reward ratio is incredible. 1% of portfolio can be recovered from in the event of the total loss. Being out of position entirely is madness.

Fidelity Digital Assets Group.. Other major banks spinning up crypto divisions. Paypal, Cash App and soon Venmo will have support.

Institutions own it now.. not just technophiles.

Boomers I get the hesitation.. but mentally spry Xennials like my peers.. what the heck..? Jump in and grab a BTC. There's more multimillionaires in the world than whole units of BTC that will ever get produced

 

[thx1139]

If you cannot handle the swings then invest less in Bitcoin and more into some stable coin.

Everyone has a different risk tolerance, many people are okay with the swings in crypto and use it as investment/currency interchangeable. Some people prefer to only use it as a currency, some as an investment. If you really want a specific use case there probably is a way to accomplish it as it is Turing complete.

Thats not my point. It is not currency if it swings so dramatically. I would never want to be paid in Bitcoin or price items in Bitcoin.

 

[MXWing]

Thats not my point. It is not currency if it swings so dramatically. I would never want to be paid in Bitcoin or price items in Bitcoin.

Ehhh so you wouldn’t accept 10,000 Bitcoin for two pizzas?

Bitcoin Pizza Day: Celebrating the $80 Million Pizza Order

Swings go both ways.