“Do states dream of electric money ?” — Philip K. Dick (Reloaded)

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So Electricity. Many Efficiency. (Blade Runner)

No equation, no chart in this fourth part. Just a short discussion about the total cost of Bitcoin’s PoW. It will offer us the opportunity to introduce another fundamental property of PoW which makes it truly unique.

Is it really worth it ?

While our previous posts suggest that the efficiency of Bitcoin’s PoW has improved over time, they don’t address another source of concerns which is the total cost of the system.

Indeed, it seems legit to ask ourselves if this cost is really worth it. After all, we already know that alternate models (centralized systems, federations, etc) can be used for implementing monetary and/or payment systems and it’s often said that these models come with a lower environmental cost. …

“Be like the cliff against which the waves continually break; but it stands firm and tames the fury of the water around it.” — Marcus ‘Rocky’ Aurelius, Meditations of a Bitcoin miner

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In the previous parts of this series, we’ve started to investigate the efficiency of Bitcoin’s PoW. In this third part, we’re going to focus on a slightly different question: “Is the system running at its optimum ?”.

For this, we’ll first underline some points related to the effects of an increasing hashrate and we’ll introduce the Satoshi’s cliff, a 3D visualization illustrating the diminishing marginal security provided by older blocks. Then, we’ll define what could be considered as the theoretical optimum of the system and we’ll wonder how far is the system from this optimum. …

“Countless words count less than the silent balance between yin and yang” - Laotzi

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Hodling & Mining, the two dragons of Bitcoin (photo: Panels of Dragons Yin Yang)

In the second part of this series, we’re going to define a new metrics called the Price-Performance Ratio of Bitcoin’s PoW (PPR). Our goal will be to analyze the evolution of the actual efficiency of the system and to identify the factors driving its dynamics.

After having defined this new metrics, we will first witness its “surprising” correlation with the bitcoin’s market price. Going a bit further in our analysis, we’ll study the role played by hodling and mining. …

“Law I: Every UTXO persists in its state, except insofar as it is compelled to change its state by force impressed.” — Isaac Newton, Principia 2.0

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Newton diffracting an UTXO with payment batching

In the last years, a lot has been written about the “huge waste of energy” resulting from Bitcoin’s Proof of Work (PoW). In this series of four posts, we‘re going to challenge this widespread opinion by questioning the main metrics used to highlight the alleged increasing inefficiency of Bitcoin’s PoW.

In this first part, we‘ll first discuss the main utility of PoW in the Bitcoin protocol. Then, after a reminder of two important properties of Bitcoin’s PoW, we’ll define a mathematical formalization of this utility (Bitcoin.Days Secured) and we’ll use it to define two new metrics (Unit Cost and Average Cost). …

“The brain is at least twenty feet from his apparent forehead in life; it is hidden away behind its vast outworks, like the innermost citadel within the amplified fortifications of Quebec.” — Herman Melville, Moby-Dick

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The French Connection

In the first part of this series, we’ve started to draw a map tracing the boundaries of Moby Dick. While useful, this map remains rudimentary and very low def.

Improving this map will be the subject of this third part with the goal of finding new insights about the internals of the attacks and may be about their perpetrator(s). …

“You’re terminated, fucker.” — Sarah “JW” Connor, The Terminator

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Terminator 2: Judgement Day

In the first part of this series, we’ve observed the existence of an 8th wave of spam during S2 2016. In this second part, we’ll try to find the reasons explaining this occurrence.

Back to the basics

Two theories may explain the late occurrence of the 8th wave:

  • its fan-in transactions were created by the attacker during S2 2016 and immediately included in blocks,
  • its fan-in transactions were created before S2 2016 and first rejected by the miners before these ones change their mind during S2 2016 (for whatever reason).

A quick search in the archives (a.k.a. google search & statoshi.info) suggests that the second theory might be the right one. …

“Ignorance is the parent of fear.” — Herman Melville, Moby-Dick

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In the heart of the sea (*)

This is the first part of a series of 3 articles (part 2, part3) presenting the results of an analysis of the summer 2015 spam attack (a.k.a Moby Dick). This analysis was performed in collaboration with Antoine Le Calvez from p2sh.info.

Beyond the confirmation of known facts already described in academic literature or reported by users on social networks, our hope is that you’ll find in these articles a few new insights and may be a new perspective about this event.

Note that this study was realized on a best effort basis and is by no means exhaustive. No need to say that all errors or omissions are mine. More than ever, we encourage everybody (especially academics) to investigate the subject on their own. …

“Nothing is more practical than a good theory.” — Ludwig Boltzmann

Today, I’m thrilled to share Boltzmann, a tool which (I hope) will be useful to all developers working on Bitcoin wallets and services. It should help them to better quantify the degree of privacy associated to transactions built by their service (especially for those implementing privacy-friendly features like CoinJoin or BIP126).

What is Boltzmann ?

Boltzmann is a python script computing a set of metrics for a Bitcoin transaction :
* entropy of the transaction : a metrics measuring how many possible mappings of inputs to outputs are possible given the values,
* link probability between an input and an output : the probability that an input has sent some funds to an output,
* linkability matrix of the transaction : a matrix storing the link probabilities between inputs and outputs of the…

“You knock yourself down. You don’t think much of yourself. That’s an uncomfortable feeling. So you project it on others and say, ‘They don’t like me’.” - Flora Rheta Schreiber, Sybil: The Classic True Story of a Woman Possessed by Sixteen Personalities

Lately, a fellow bitcoiner contacted me, suggesting that I should try to use OXT in order to check if the recent growth of Bitcoin Classic nodes is a real sign of increasing popularity. I wasn’t very excited by the idea because I’m already convinced that using the number of nodes as a proxy for popularity is a very wrong idea. Because, you know, Sybil is a nice woman but she’s a bit too crazy... …

“Ask not what bitcoin can do for you, ask what you can do for bitcoin” - J.F. Kennedy (Biography - Apollo Editions)

Dear Brian,

First, I would like to apologize for the length of this letter and my crappy english.

A bit of context. During these last 12 months, I’ve been working on the development of an analytics platform dedicated to the bitcoin blockchain. Long hours spent on charts taught me a few things that I would like to share with you.

One of these things is that bitcoin is still a small economy and therefore it’s still possible that the activity of a single actor/service has a very noticeable impact. …



Developer of OXT (https://oxt.me)

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