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A Bitcoin BoomletTechCrunchBitcoin
is currently enjoying what politicos call a boomlet — a small bump that, while perhaps not impressive on a historical scale, is certainly notable. For bitcoin
at the moment, this means a price spike that has put the cryptocurrency into its ...
Posted on 30 November 2015 | 10:54 am
Posted on 30 November 2015 | 10:54 am
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Posted on 29 November 2015 | 7:01 pm
Dogetipbot has announced it will go open-source just over one year after raising $445,000 from investors including Blackbird Ventures.
Posted on 30 November 2015 | 3:50 pm
The Estonian Supreme Court has asked the country’s government to provide clarity in an ongoing court case involving bitcoin trading.
Posted on 30 November 2015 | 1:15 pm
The busiest day for bitcoin exchanges ever was recorded on 26th November, according to data provider Bitcoinity.
Posted on 30 November 2015 | 6:25 am
Bitcoin reputation startup Bonafide has elected to cease operations and commence liquidation less than one year after raising $850,000.
Posted on 29 November 2015 | 7:01 pm
Journalist John Biggs details why he thinks bitcoin will eventually succeed.
Posted on 29 November 2015 | 5:50 am
In a new interview with CoinDesk, Russia's Ministry of Finance opened up about bitcoin and blockchain technology.
Posted on 28 November 2015 | 6:18 am
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CoinDesk has rounded up some of the top bitcoin and blockchain-related headlines from across the globe.
Posted on 27 November 2015 | 10:30 am
Lloyd's held a seminar in London last week to highlight blockchain technology to insurance market participants as part of their modernisation plan.
Posted on 27 November 2015 | 9:00 am
Bitcoin compliance startup Polycoin was recently accepted into two incubators, one backed by Citi and the other by Nordea.
Posted on 27 November 2015 | 5:00 am
The Kenyan High Court heard a case brought by bitcoin startup BitPesa against mobile money giant Safaricom two days ago.
Posted on 26 November 2015 | 9:05 am
New York bitcoin exchange Coinsetter has instituted a new $65-per-month account fee, a move it says is aimed at offsetting its compliance costs.
Posted on 25 November 2015 | 12:31 pm
The Bank of England has launched a blockchain challenge, offering the winning students the possibility of a six-week paid internship.
Posted on 25 November 2015 | 10:55 am
West Virginia University’s Student Government Association is debating whether to use a blockchain-based voting platform for its upcoming election.
Posted on 25 November 2015 | 10:00 am
Visa Europe discusses why it is using the bitcoin blockchain as part of its new proof-of-concept for the remittance market.
Posted on 25 November 2015 | 7:00 am
Bitcoin industry startups are facing backlash over a new set of articles in which they have been portrayed as pivoting away from the cryptocurrency.
Posted on 24 November 2015 | 1:40 pm
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Post-trade services firm Kynetix is seeking to assemble a consortium of commodities market stakeholders to explore the use of blockchain tech.
Posted on 24 November 2015 | 12:05 pm
In May, Bitcoin Magazine reported that blockchain-based Governance 2.0 initiative Bitnation is developing a collaborative platform for DIY Governance based on the blockchain.
“Bitnation is a Governance 2.0 Operating System, designed to disrupt the nation-state oligopoly through offering more convenient, secure and cost-efficient governance services,” said Bitnation founder and CEO Susanne Tarkowski Tempelhof.
Bitnation is one of several emerging initiatives to empower connected global citizens with a growing range of options to bypass legacy governance systems based on nation states. The e-Residency program launched by the government of Estonia is another such initiative.
The program offers anyone, anywhere, a digital identity issued by the Estonian government and the possibility to start and operate a business online under Estonian regulations. The foreigners who become e-residents of Estonia are not automatically entitled to physical residency in the small Baltic state, but they can base their online financial life there.
Estonia, a country at the forefront of modern e-government, has been offering efficient online services to its citizens for more than a decade.
“By offering e-residents the same services, Estonia is proudly pioneering the idea of a country without borders,” proudly states the e-residency website. In particular, e-residents can digitally sign, verify and encrypt documents and contracts, establish an Estonian company online in 24 hours with a physical address in Estonia provided by an external service, and administer the company from anywhere in the world.
Currently, establishing an Estonian bank account for the company requires one in-person meeting at one of the banks that recognize e-resident smart ID cards – currently LHV, Swedbank and SEB – but once the account is established e-residents can manage e-banking and remote money transfers from anywhere in the world.
An appealing feature of e-residency for entrepreneurs is that, in Estonia, company income is not taxed. Therefore, compliance is simplified and all income is available for re-investment. However, since e-residency doesn’t imply tax residency, e-residents are supposed to pay taxes at home for the money that they take out of the company.
Now, the Estonian government is partnering with Bitnation to offer a public notary service to Estonian e-residents based on blockchain technology.
“Via the international Bitnation Public Notary, e-residents, regardless of where they live or do business, will be able to notarize their marriages, birth certificates, business contracts, and much more on the blockchain,” states a joint press release.
"I'm delighted to work with Estonia's e-residency program to set a standard practice of competition of governance services on a global market, and to enable others to exercise self-determination and follow Bitnation's path to sovereignty,” said Tarkowski Tempelhof in the press release.
“The Republic of Estonia is on the forefront of innovation when it comes to e-governance,” Tarkowski Tempelhof told Bitcoin Magazine. “They’re mostly young and open-minded, eager to test new technologies to improve their services. Additionally, their processes are quite streamlined, which is original for being a government, and needless to say, very refreshing.”
If a couple gets married on the public notary, it doesn’t mean they get married in the jurisdiction of Estonia, or in any other nation state jurisdiction, notes the press release. Instead, they get married in the “blockchain jurisdiction.”
International Business Times notes that, besides marriages, blockchain technology can provides a worldwide legally binding proof of existence and integrity of contractual agreements for things such as banking, incorporating companies quickly and cheaply and generally empowering entrepreneurs and citizens around the world.
"In Estonia we believe that people should be able to freely choose their digital/public services best fit to them, regardless of the geographical area where they were arbitrarily born,” said e-Residency Program Director Kaspar Korjus. “We're truly living in exciting times when nation states and virtual nations compete and collaborate with each other on an international market, to provide better governance services."
In fact, the importance and potential impact of the Estonian government’s move shouldn’t be underestimated. Here we have the government of a nation state, a full member of the European Union, acknowledging a virtual nation as a legitimate partner for the development and gradual implementation of next-generation governance services.
“My aim is to see a world where hundreds of thousands or millions of governance service providers in a free global market competing through offering better services at a better value, rather than through the use of force within arbitrary lines in the sand,” Tarkowski Tempelhof told Bitcoin Magazine. “To that end, seeing nation state governments starting to provide governance services on a free global market as well, like The Republic of Estonia, is encouraging, and a step in the right direction. Now we need more nation state governments, as well as open source protocols joining the global market.”
Tarkowski Tempelhof added that, realistically, it’s more likely that small nations will adopt the technology in the short term.
“Countries and city states that come to mind are Singapore, Lichtenstein, Andorra, etc.,” she said. “We’re also likely to see nations in the developing world leapfrogging in terms of governance technologies.”
Photo Steve Jurvetson / Flickr(CC)
The post Estonian Government Partners with Bitnation to Offer Blockchain Notarization Services to e-Residents appeared first on Bitcoin Magazine.
Netki, a service aimed to simplify bitcoin payments, has officially released a beta of their Google Chrome browser extension, allowing customers to use email-esque Wallet Names such as ‘wallet.justin.me ‘ instead of lengthy 32 character public addresses. Netki users can now enter their Wallet Name anywhere on the web, and the extension will automatically replace the name with the appropriate public wallet address. They currently support bitcoin, litecoin, dogecoin, Factom (Factoids and entry credits), and Ether, among others.
Their new extension will allow Netki users to maintain their anonymity and save time across nearly any web-based blockchain application, including wallets such as Coinbase, Blockchain, and Uphold, exchanges like Kraken, Bitfinex, and CEX.IO, and other applications such as Fold and Purse.io.
The extension is available for free on the Chrome Web Store. And while an individual Wallet Name is available on Netki’s website for as little as $1.95 a year, ChangeTip users are given one for free. If you’d like to try the extension, sign up for a ChangeTip account on their website, navigate to the ‘Tips’ tab on the top left of the page, and activate your personalized Wallet Name by clicking on the personalized URL under the ‘Tip.me Page’ header on the left side of the page. Your new Wallet Name will be tied to the deposit address for your ChangeTip account, which you can use anywhere on the Internet with the new extension.
Netki, started in 2014 and described by many as the “DNS for Bitcoin,” has already partnered with companies such as ChangeTip, Gem, and Snapcard, whose users are automatically registered and given a personalized Wallet Name.
However, their ambitions are much larger. Wallet Names will allow individuals to remain ‘pseudo-anonymous’ on the public blockchain, mitigating serious privacy concerns for those whose real-world identities become associated with single, static public addresses.
In addition, Netki also built in support for Hierarchical Deterministic or HD Wallets, which allow users to automatically create a unique public address for each transaction related to a single Wallet Name. HD Wallets, when combined with Netki’s Wallet Name, can help individuals maintain anonymity on the blockchain without the hassle of managing dozens of public addresses.
Netki CEO Justin Newton also hopes their new extension, combined with individualized Netki Wallet Names, will allow new users to more easily understand and use bitcoin online.
“We are excited to release this Chrome extension as it now allows users to send using Wallet Names at all web-based blockchain and bitcoin services.," Newton said. "This is a significant step forward in the usability of blockchain technology to ensure easier mainstream market adoption.”
The post Netki Launches Google Chrome Extension to Simplify Bitcoin Wallet Addresses appeared first on Bitcoin Magazine.
Slush Pool, a Czech-based Bitcoin mining pool accounting for 6 percent of hashing power on the Bitcoin network, indicates it will re-enable connected miners to vote for a block-size increase through BIP (Bitcoin Improvement Proposal) 101. Slush Pool was the first mining pool on the Bitcoin network to allow miners to vote for BIP 101, but recently suspended this option due to sustained DDoS attacks on its servers.
Speaking to Bitcoin Magazine, Slush Pool operator Marek Palatinus said: “We're strengthening our infrastructure and we plan to enable BIP 101 mining again.”
The block-size dispute might reach a critical juncture over the next weeks, with the upcomingScaling Bitcoin workshop in Hong Kong in the first week of December, and the stated intent of several prominent Bitcoin companies to change their code to allow for bigger blocks that same month. As such, Bitcoin miners (and pools) might be faced with an important decision as to which code they will support.
Palatinus said that the effort to re-enable miners to vote for bigger blocks is unrelated to this “December deadline,” however.
“We're not focused on December with our decision, but we still think the block-size limit should be increased,” Palatinus explained. “Sometimes there are already blocks full of valid transactions, and there's not any particular reason why user experience with bitcoin transactions should be limited because of an arbitrary limit of 1 megabyte.”
He added, “We're close friends to Paralelni Polis, the first – and only? – bitcoin-only cafe and co-working space, located in Prague near our offices. We have real-world experience with day-to-day bitcoin transactions of common users. We also see issues related with transactions not going through the Bitcoin network and how it affects bitcoin acceptance. For this reason we consider this an urgent issue.”
BIP 101 – which is implemented in alternative Bitcoin implementation Bitcoin XT – is programmed to increase the maximum block size to 8 megabytes if a threshold of 75 percent of mining power accepts the change. Once activated, this limit is set to double every two years. Much like before, however, Slush Pool does not intend to force connected miners to vote for a BIP 101 block increase with their hashing power. Instead, individual miners will be given the option to cast such a vote if they want to.
“We personally hope BIP 101 will be adopted, but we do not want to enforce BIP 101 mining on our pool,” Palatinus said. “We believe in open discussion and democracy. For this reason we want to tell our miners about all options, explain their pros and cons, and let them individually decide by their mining vote.”
BIP 101 has received criticism within the Bitcoin development community, the main concern being that its exponential growth curve might lead to oversized blocks. While an increased block size would allow for more transactions on the Bitcoin network, “Decentralists ” fear that oversized blocks could further centralize mining and full nodes – in turn, potentially harming Bitcoin's censorship resistance.
Palatinus, however, believes the risks of BIP 101 are being exaggerated, explaining:
“Improved block compression solutions will be able to vastly decrease the risk of oversized risks in regard of centralization of mining. Additionally, Bitcoin's blockchain file is impractically big for common use already. Normal users don't run Bitcoin Core anymore, because there are many other easier and more user-friendly solutions for managing bitcoin than Core. For those who want to have a full copy for any reason, there won't be a much bigger difference.”
Finally, Palatinus added that Slush Pool is open to alternative block increase proposals, too.
One alternative block-size proposal that has been gathering support is an incremental increase to 8 megabytes over four years time. Proposed as a temporary solution by Blockstream CEO and hashcash inventor Dr. Adam Back, this “2-4-8” option seems acceptable to a significant segment of the Bitcoin Core development team, as well as prominent industry members.
When asked by Bitcoin Magazine about the 2-4-8 quick fix, Palatinus said: “This will only move the same discussion to the future, not solving the real issue. However as a temporary solution – possible.”
The post Slush Pool to Re-Enable BIP 101 Bitcoin Mining appeared first on Bitcoin Magazine.
With Mike Hearn taking a step back from Bitcoin development to work for private blockchain startup R3, former Bitcoin Core lead developer Gavin Andresen indicated he might take over the lead of Bitcoin XT, the Bitcoin implementation programmed to increase the block-size limit through BIP (Bitcoin Improvement Proposal) 101.
Andresen, who shifted his efforts to Bitcoin XT earlier this year, told Bitcoin Magazine, reluctantly: “I might take over lead of XT, but I don't want to.”
It was announced last week that Hearn recently joined R3 as lead platform engineer, where the Google veteran and Bitcoin XT lead developer will work with some of the world's largest banks on distributed ledger-based protocols for global financial markets. Hearn confirmed to Bitcoin Magazine that he will do the minimum required to keep Bitcoin XT running, but won't actively develop or advocate the implementation any longer.
Hearn, a staunch advocate of a block-size increase in order to allow for more transactions on Bitcoin's network, implemented BIP 101 into Bitcoin XT this summer. With this patch, designed by Andresen, Bitcoin XT is set to increase the maximum block size to 8 megabytes if a threshold of 75 percent of mining power accepts the change. Once activated, this limit is set to double every two years.
On Reddit, Hearn detailed:
The implementation of BIP 101 in Bitcoin XT without industrywide consensus was considered controversial by many, in particular among the Bitcoin development community. Shortly after Hearn implemented the patch, however, several prominent Bitcoin companies stated their intent to upgrade their code to support BIP 101 by December of this year. As such, the timing of Hearn's departure could have been experienced as unfortunate by supporters of a rapid block-size increase. While the Bitcoin industry could still adopt Bitcoin XT, this seems unlikely with no active lead development.
Success of Bitcoin XT might therefore depend on Andresen taking over as lead developer, Hearn acknowledged when asked by Bitcoin Magazine. This idea – which was previously advocated by Coinbase CEO Brian Armstrong – was not dismissed by Andresen, though he is not keen to take such a step. Andresen, who is currently on MIT's payroll, explained:
I might take over lead of XT, but I don't want to. I stepped back from lead of Core because I got tired of the constant trivial decision-making needed to lead an active open source software project. I want to spend my time thinking about and working on bigger, longer-term issues; like: 'What are the benefits and risks of increasing the maximum block size?'”
BIP 101 itself currently garners little support among the Bitcoin development community, and seems very unlikely to be implemented in Bitcoin Core. Regardless, Andresen does expect that BIP 101 might be adopted by the industry at large. Either through Bitcoin XT, or by miners, companies and other users implementing the patch in their own software.
It depends on what comes out of the big Hong Kong meeting,” Andresen explained. “If the other developers can't make up their minds and reach consensus on a solution, then we'll have a messy, chaotic couple of months where companies and big mining pools or miners pick sides until a solution emerges. Though, in that case, I do expect that the most likely solution will be BIP 101, since it is the only solution with well-tested code they can download and run.”
Photo Web Summit / Flickr(CC)
The post Gavin Andresen: I Might Take Over Lead of Bitcoin XT appeared first on Bitcoin Magazine.
Coinbase has introduced the first U.S.-issued bitcoin debit card, the Shift Card, in partnership with Shift Payments. The Shift Card is a Visa debit card that currently allows Coinbase users in 24 states to spend bitcoin both online and at physical points of sale at more than 38 million merchants worldwide.
“Merchant adoption has come a long way over the past few years, but it’s still difficult for people to make regular purchases with bitcoin,” notes the Coinbase announcement. “Buying gas at a local gas station or groceries at a neighborhood grocery store with bitcoin has not been possible in most cities in the U.S. Thanks to Shift Payments, it’s now possible to use bitcoin to buy gas, groceries, and much more. With the Shift Card, you can now spend bitcoin anywhere in the world that Visa is accepted.”
Coinbase users living in the states where the service is available can order a Shift debit card for $10 and link it to a Coinbase wallet. When the Shift debit card is used to make a purchase, the equivalent value of bitcoin (based on the current spot price of bitcoin on Coinbase) is debited from the user’s Coinbase bitcoin wallet. For certain transactions, such as gas purchases and dinner bills, Shift will debit more than the purchase amount, and refund the remainder to the user when the final payment amount is settled.
There are no annual fees, no bitcoin-to-dollar conversion fees, and no domestic transaction fees. Coinbase says there are no domestic transaction fees “for a limited time,” which seems to indicate that domestic transaction fees could be added in the future. There is a $2.50 ATM fee and a 3 percent international transaction fee. The daily ATM withdrawal limit is $200, and the default daily spending limit is $1,000.
The card isn’t available to users in New York, Florida, and many other states. Coinbase and Shift Payments say that they are working through legal and regulatory matters in the states where the Shift Card is not yet available.
Shift Payments wants to integrate all payment options available to a user in one debit card. Users can connect a Shift Card to multiple accounts to seamlessly spend all supported payment means, including digital currencies, with the same card.
“The Shift Card works like any debit card today,” notes the Shift website. “Connect your existing accounts and spend Coinbase or Dwolla, immediately and directly, everywhere Visa is accepted.”
The Shift card isn’t the first bitcoin debit card, but the availability of a Visa-branded bitcoin debit card from a major bitcoin exchange and wallet operator is likely to represent a quantum leap in the space.
“At the end of the day, what we’re trying to do is make bitcoin easy to use,” Coinbase vice president of business development and strategy Adam White, told Wired. “We want to make it easy to buy and sell bitcoin, and we want to make it easy to spend. A mainstream debit card based on bitcoin is a key element.”
Of course all U.S. bitcoin users already can spend their bitcoin by converting them to dollars and sending the dollars to their bank accounts, but the process is lengthy and probably overly complex for some users.
Therefore, the Shift Card is likely to make Bitcoin much more useful in daily life.
Wired notes that existing Coinbase customers are now likely to start spending more of their bitcoin, rather than just speculating, and new customers will be attracted to the digital currency because they can more easily spend it. Then, merchants will be more motivated to start accepting bitcoin, which could start a runaway feedback loop that will boost the Bitcoin ecosystem.
The post Coinbase and Shift Payments Introduce a Visa-branded Bitcoin Debit Card That Works Everywhere Visa is Accepted appeared first on Bitcoin Magazine.
As the bitcoin price has risen out of the $200’s over the past month, the price increase has driven another important event: more mining hardware is being brought online.
Miners earn revenue two ways. The first is with the block reward, which is 25BTC approximately every 10 minutes. The other way is with transaction fees. The block reward also acts as the mechanism in which new supply of bitcoin is generated. Because mining tends to reward those that can do the most work, miners deploy increasing amounts of hardware to try to be the first to mine each block. To keep a steady block creation rate, Bitcoin creator Satoshi Nakamoto put in place a rule that updates the network difficulty every 2016 blocks, or approximately two weeks.
According to Bitcoin Wisdom, the difficulty increase that took place today rose by 10.44%. The last time the difficulty increased by more than 10 percent was on November 5, 2014, when the difficulty increased by 10.05 percent. Further, Bitcoin Wisdom is predicting that the next bitcoin difficulty increase in 2 weeks will be 10.25%. The last time there were two double digit percentage increases in difficulty was August 19, 2014 and August 31, 2014.
But the increase in difficulty makes sense.
The next generation of bitcoin miners have been released by three of the top companies in the space. In August, Bitmain announced the launch of the Antminer S7, which contains the BM1385 ASIC. Each S7 can generate upwards of 4,850 GH/s while only using 0.25 J/GH of power.
In October, the Chinese mining firm BW announced that it was releasing its next stage bitcoin miner, which would contain a 14nm chip. Virgilio Lizardo Jr., head of international at Bitbank, told Bitcoin Magazine that the first batch of servers released would be 48 petahash total. For context, the current network has a hash rate of 550.5 PH/s.
Finally, the original creator of the ASIC miner, Avalon, announced that it was releasing its latest miner, the Avalon6, which would contain the new A3218 mining chip. Each miner would be able to generate 3.65 TH/s of hashing power. While these new miners have just hit the market, it is additional hardware that should come online over the coming weeks.
The reality is simple: As the price of bitcoin increases, the number of people who can make a profit mining increases. That encourages more participation in securing the network, which results in the need for a difficulty increase. As these next generation of bitcoin miners come online, it is expected that the difficulty will continue to counteract the additional hash rate in the network.
Jacob Donnelly is a freelance journalist and a consultant in the bitcoin/blockchain space. He runs a weekly digital currency and blockchain newsletter called Crypto Brief.
The post Mining Difficulty Increases by over 10% Due to Bitcoin Price Increase and next-Generation Chips appeared first on Bitcoin Magazine.
Bitcoin requires decentralization of miners (or mining pools) and full nodes to achieve what some consider its core property: censorship resistance. As such, the block-size dispute represents a trade-off. Bigger blocks allow for more transactions on the Bitcoin network, but take more time to propagate, favoring larger miners and pools, while the increased data transmission disincentivizes users to run full nodes.
Fortunately, there are proposals to increase Bitcoin's efficiency that reduce the risk of bigger blocks. One of the most promising innovations in this regard, are Invertible Bloom Lookup Table, or IBLTs. First introduced by Bitcoin XT and Bitcoin Core developer Gavin Andresen, this idea was picked up and is currently worked on as a side-project by Linux veteran and Blockstream's Lightning Network developer Paul “Rusty” Russell.
“If we can make this work, it means less bandwidth requirements and less block data, which should be good for network health all over,” says Russell.
So what problem do IBLTs solve?
Typically, all Bitcoin transactions are transmitted from node to node over the peer-to-peer network, to be stored by the mempools (the record of unconfirmed transactions) of individual nodes. When a miner finds a block, it includes (some of) these transactions in that block, and subsequently transmits this block over the same peer-to-peer network. Of course, this means that all transactions in the block are effectively sent over the network twice: once as a transaction, and once as part of a block.
Speaking to Bitcoin Magazine, Russell explained:
“We've got redundancy in blocks. Most nodes already know some of the content in that block; they have already seen it. If we can optimize that, we can speed up block transmission. That decreases centralization pressure because miners can get their blocks out faster, while the network works better ... it's all good.”
The Magic of IBLTs
The main problem – the reason we need IBLTs to solve this problem (rather than a straightforward compression algorithm) – is that the set of transactions included in blocks is often not exactly identical as those stored by the mempools of all individual nodes; the biggest difference being the latest transactions transmitted over the network before the block was found. Moreover, the mempools of all individual nodes usually differ from each other a bit, too. This makes it hard to know which transactions a miner included in the new block, without seeing the whole block.
That’s where IBLTs come in. IBLTs combine several mathematical tricks to enable set reconciliation. As such, they basically allow for two slightly different mempools to be compared and harmonized, without actually needing both mempools in full.
This works as follows:
At first, all transactions included in a block are written into a table, where each transaction starts at a different spot in that table. However, there are many more transactions than there is room in the table, so the result is hopelessly overlapping. This makes the IBLT very compact, but also unreadable and undecipherable for anyone who doesn't have access to any transaction data himself.
Anyone who does have transaction data, however, can compare the overlapping transaction data in the IBLT to his own transaction data by filling up an IBLT with his own transactions using similar logic. If both IBLTs end up looking exactly the same, it means all transactions match exactly.
But even if the IBLTs do not end up looking exactly the same, this can still be helpful, as long as the sets of transactions are fairly similar. In that case, the IBLTs can be compared in such a way that all identical transactions cancel each other out. The “leftovers” in the IBLT, then, can often be used to reconstruct the missing transactions.
So rather than needing to transmit full blocks over the peer-to-peer network, nodes can transmit the much smaller IBLTs instead. This requires less data to be sent around and is much faster.
And it gets better. In Russell's design, not even all of the transactions included in new blocks need to fit in the IBLTs. Instead, connected nodes on Bitcoin's peer-to-peer network fine tune which transactions to send to peers. This could increase propagation time and decrease data usage even more.
“Gavin's original idea was that the miner would produce the IBLT, and send every node on the network the same one,” Russell said. “But when we started playing with the concept, it turned out it's very fast to generate IBLTs. So why not have every node do it? Generate IBLTs per peer, because each node has a much better idea of how close its mempool has been to a peer; they're sending this stuff back and forth all the time.”
Moreover, connected nodes can continually learn to understand each other's behavior. So once a node receives an IBLT from the network, and constructs a valid block out of it, it knows how many transactions it was missing. Additionally, it learned over time how many transactions his peer typically differers from him. That difference – the transactions it had to construct plus the usual difference between the two peers – is what the node will include in the IBLT and send to its peer.
As such, the IBLT system can improve over time, limiting the amount of data to transmit over the network to the bare minimum.
“The IBLT must roughly be twice the data size of the transaction difference,” Russell explained. “So out of all the transactions one node didn't know were in a block, plus the transactions that node thought were in the block but weren't... basically double that, and that's how big the IBLT needs to be. So if the differences are small, it will work really well.
“Ideally, if we can cram this thing into two IP packets,” he said. “We are lightning fast.”
Specific details of IBLTs and Bitcoin can be found on Russell's blog and Andresen’s GitHub contribution.
The post How the Magic of IBLTs Could Boost Bitcoin's Decentralization appeared first on Bitcoin Magazine.
In September Bitcoin Magazine reported that nine global banks were pooling resources to fund R3, a next-generation global financial services company focused on applications of cryptographic technology and distributed ledger-based protocols within global financial markets.
R3 will seek to establish consistent standards and protocols for this emerging technology across the financial industry in order to facilitate broader adoption and gain a network effect, according to an R3 press release.
Several other top banks joined R3 soon thereafter.
Now, five more banks – ING, BNP Paribas, Wells Fargo, MacQuarie and the Canadian Imperial Bank of Commerce – are joining R3, Reuters reports. R3, now supported by most of the world’s major banks (with notable exceptions in China), represents the first high-profile collaborative project to find out how blockchain technology can be used in finance.
Thirty banks across the world are now partnering with R3, signaling a significant commitment to collaboratively evaluate and apply this emerging technology to the global financial system.
“The combined strength of our technology team and the diverse global footprint of our member banks clearly differentiates us and puts us in a unique and exciting position within the distributed ledger space,” said R3's CEO David Rutter. “The R3 collaborative model is the best way to quickly, efficiently and cost-effectively deliver these new technologies to global financial markets. We look forward to welcoming more players to our growing team as the initiative continues to develop and evolve.”
Richard Gendal Brown, IBM's former executive architect of banking innovation, joined R3 in September as chief technology officer. In a recent post on his personal blog, he introduced his senior leadership team, which includes James Carlyle, formerly chief engineer at Barclays Personal and Corporate Bank, who joined R3 as chief engineer, and Bitcoin code developer Mike Hearn, who joined R3 as lead platform engineer. Ian Grigg joined R3 as architecture consultant, and Tim Swanson joined R3 as head of research.
Gendal Brown’s team will focus on the basics of fintech applications for banks and financial firms: “[W]hat properties does a technology platform need to possess if it is going to enable the world’s banks – and other firms – to deploy shared platforms to record, manage and report on their contractual agreements with each other and with their customers? What is the irreducible set of functional requirements we must provide? What are the non-negotiable non-functional requirements?”
A press release on ING Bank's website announced that, by joining R3, ING is taking the next step with blockchain technology to collaborate on research, design, and engineering that will advance innovative solutions for clients that meet banking requirements for security, reliability, performance, scalability, and auditing. ING Group, a Dutch multinational banking and financial services corporation headquartered in Amsterdam, had more than 48 million individual and institutional clients in more than 40 countries in 2013.
“We are very excited about joining the R3 consortium and taking an important step forward in our payments innovation strategy,” said Mark Buitenhek, ING Global Head of Transaction Services. “We want to make the most of what blockchain technology has to offer our customers and the best way to achieve this is through global collaboration. Working together, we will develop innovative banking solutions for our clients with consistent standards and protocols guaranteeing widespread adoption. We are convinced that this initiative brings together unique sets of expertise and experience in electronic financial markets, distributed ledgers and blockchain technologies.”
The rapid rise of R3 shows that the adoption of blockchain technology in the financial sector is reaching a point of no return. On the other hand, it can also be interpreted in the context of the ongoing trend toward appropriation of blockchain technology by the mainstream financial world, which many early adopters and Bitcoin purists consider a disturbing trend.
The post ING and Other Top Banks Join R3 to Take the Next Step with Blockchain Technology appeared first on Bitcoin Magazine.
Bitcoin is designed as a peer-to-peer network, where nodes randomly connect to other nodes. Transactions and blocks are transmitted over this network by these nodes, until each node receives all the latest transactions and blocks. This works quite well, as the distributed model makes Bitcoin relatively censorship-resistant; there is no central point of control to shut down or pressure into compliance.
But there are other, more centralized alternatives for transmitting transaction data, too. The best known of these is “the” relay network, introduced in 2014 and maintained by Bitcoin Core developer Matt Corallo: “It's centralizing, but, hopefully, democratizing.”
Corallo's relay network serves two distinct purposes. First, it adds diversity to Bitcoin. Rather than just needing to rely on the peer-to-peer network, Bitcoin users can opt to receive transaction data and blocks through an alternative channel. This makes it harder to successfully attack the Bitcoin network; the relay network functions as a fallback. But the second, and more important reason, is a potential decrease of network latency.
Speaking to Bitcoin Magazine, Corallo explained:
The peer-to-peer code in Bitcoin Core is pretty gnarly. It's stable and it works, but it's not very efficient, and it's not very fast. The resulting network latency is a problem, especially for miners. It can sometimes take 10, 15 seconds before they receive newly mined blocks. If you're a miner, 10 seconds is like 1.5 percent loss in revenue. That is potentially a big deal. You don't want that.”
Some of the bigger miners (typically mining pools) have therefore come up with an alternative solution. Rather than using the peer-to-peer network to transmit new blocks, they have created an alternative – private – network. If one of these miners finds a new block, that miner immediately sends it over to the other miners on their private network, meaning all these miners can start mining on the new block immediately.
The problem, of course, is that this disadvantages all miners not using this private network. When a select group of miners starts mining on a new block faster than other miners this select group gets a head start every time one of them finds a block. This is especially worrisome because it is typically the bigger miners who have the time and resources to set up private networks. Smaller miners might, therefore, become less profitable and eventually drop off the network entirely, which centralizes mining even further.
A Leg Up
Corallo's relay network is essentially a hub-and-spoke network, which consists of servers set up in eight well-connected Internet traffic hubs: New York, Seattle, Amsterdam, Beijing, Tokyo, Singapore, Hong Kong and Novosibirsk (located in central Russia). Additionally, the relay network uses a fairly basic compression algorithm. Any Bitcoin node can connect to the nearest hub on Corallo's relay network, and send and receive transactions and blocks to and from other connected nodes.
But unlike Bitcoin's original peer-to-peer network, Corallo's relay network is centrally controlled: by Corallo. This means that users of the network need to rely on Corallo, most importantly for maintenance. (Though this doesn't stop the peer-to-peer network from propagating transactions and blocks in the mean time, of course.)
The relay network is not the most reliable thing,” Corallo acknowledged. “There is no service-level agreement ... once in a while servers go down and I don't fix it right away... sometimes I'm sleeping, or drunk.”
But absent better alternatives, the relay network can still save small miners on cost, meaning they can increase their profit, and remain competitive, Corallo hopes.
It's democratizing in the sense that larger miners do something like this already,” he said. “The relay network gives smaller miners a leg up, since they don't need to spend a proportionally large portion of their resources to establish these types of relay networks themselves. So it's centralizing in some ways, but, hopefully decentralizing, in others.”
The post How a Bitcoin Backbone Gives Small Miners a Leg Up: Matt Corrallo's Relay Network appeared first on Bitcoin Magazine.