A Lightning channel can be thought of as a string of beads stretched between two people. Referring to Fig. 1, Alice can pay Bob by pushing one of her beads to his side. If Bob also has a Lightning channel with Carol, Alice can pay Carol through Bob: she pushes a bead over to Bob, who then pushes a bead over to Carol. The fundamental rule — and the reason behind the Lightning Network’s liquidity problems — is that the beads can move from side to side but cannot leave the string they’re on.
That’s all you need to know…
You should resign from Bitcoin Unlimited if any of the following resonate with you:
- You don’t want bitcoin to be a peer-to-peer electronic cash system with instant transactions and low fees,
- You believe the quantity of block space actually produced should be managed by a group of experts rather than the free market,*
- You want protocol development based around one github repo and led by one dev team rather than multiple competing implementations,
- You do not value feedback from non-technical bitcoin users, or
- You are impressed by technobabble, a wheelbarrow full of degrees, and lawsuits against open-source bitcoin developers.
To…
Yesterday, I posted a quiz on Twitter to explore the cost of liquidity trapped in a channel on the Lightning Network. In this article, we work out the answers to the quiz questions.
A) What initial channel balance minimizes Company A’s cost per payment?
To answer this question, we need to find an equation for the cost per Lightning payment as a function of the initial channel balance, Bi, and then solve for the value of Bi that minimizes that cost.
To begin, note that the expected lifetime of the channel in days (tf) and number of payments (n) (because Company A pays once per day) is
Channel lifetime: tf =n=…
Yesterday I posted a quiz on Twitter about routing payments across the Lightning Network.
The correct answer was “(A) 1 coin.” Below is an animation that shows the flow of money for one of the possible routing paths.
Bitcoin Unlimited (BU) is hiring a full-time web developer. His or her duties will include maintaining and adding new functionality to the Bitcoin Unlimited website. The developer’s immediate tasks will be to:
- Add a “blog section” to the Bitcoin Unlimited website so that BU members can post updates and articles without going through the “GitHub pull-request” process. (As BU’s site uses nodeJS, candidates should have experience working with this platform.)
- Build a site dedicated to the Gigablock Testnet Initiative. In addition to providing background information on the initiative, the site will host a “Gigablock Testnet” block explorer, and provide real-time…
In order to reduce transaction fees, improve confirmation reliability, and provide additional capacity for the growing number of bitcoin users, the bitcoin network is being upgraded, mid-November, at block 494,784.
For the majority of bitcoin users, the upgrade will be seamless — no action is required on their part.
Technical details, simplified
Every ten minutes, on average, a miner finds a solution to the “bitcoin mining puzzle,” which allows her to issue herself 12.5 new bitcoins. It is through this process that new bitcoins enter circulation (Fig. 1).
Miners can also include a digital fingerprint (root hash) of recent transactions when mining, as…
The best part of the Silbert Accord is that it was negotiated between the relevant parties: the producers of block space (miners) and the consumers of block space (Bitcoin businesses on behalf of their users). Bitcoin has a tendency of annihilating gate keepers and this meeting was a step towards the disintermediation of another group holding bitcoin back: the developers themselves.
The notion that developers represent a group of “wizards” that know better than the businesses and miners who work each day growing the Bitcoin economy is absurd. Would you want a Bitcoin developer running your mining farm, deciding how…
“The upgrade to larger blocks must be decisive and absolute.”
After visiting with Coinbase on 16 March 2017 and with Bitpay on 20 March 2017, this is the message that resonates inside me: “the upgrade to larger blocks must be decisive and absolute.” The community does not want the blockchain to split. A split would threaten Bitcoin’s network effect, cause confusion in the media, and create unnecessary work for many Bitcoin businesses. This article presents my perspective on what is happening in Bitcoin and how I suspect the upgrade to larger blocks will unfold (hint: it will be anticlimactic). It…
Bitcoin has no center. It has no Board of Directors. It has no CEO, no President, no Chieftain, Sheik or Shah. Bitcoin is a decentralized network made up of voluntary participants — only loosely connected — who come together for their mutual benefit. There are users who transact in bitcoin to take advantage of its privacy and convenience, and investors who hold bitcoin hoping to profit from its price appreciation. There are node operators whose computers validate and relay the transactions made by Bitcoin users, and there are miners — a special type of node operator — whose mining farms…
Bitcoin Unlimited’s consensus layer is concerned with preserving the money property of Bitcoin. Blocks that are potentially problematic to accept for technical reasons are dealt with in a different layer where network consensus is not critical. This article describes how Bitcoin Unlimited’s excessive-block logic works from the perspective of a single node. A follow-up article will describe how this “node-scale” behavior facilitates the emergence of a fluid and organic block size limit at the network scale.
Bitcoin is money. If you agree with that, then you probably also agree that Alice shouldn’t be able to create bitcoins out of thin air, that Bob shouldn’t be able to spend the same bitcoin twice, and that Carol shouldn’t be able to freely spend bitcoins that belong to Alice or Bob.
These properties — that we all intuitively recognize good money must have — are enforced by each node on the Bitcoin network. As described by Satoshi Nakamoto:
The enforcement of these rules takes place in each node’s consensus layer. We call it the consensus layer in part because…
Peter R. Rizun
Bitcoin Unlimited, Chief Scientist
