REALITY CHECK: Amazon alone would backlog 4mb blocks *during the off season*. On-Chain TXs cannot act as the payment layer, they should be solely developed to provide unbreakable *immutability.*

The argument I have consistently heard for larger blocks is that it wont greatly damage decentralization because drive space and bandwidth will scale to meet the growing costs of housing and validating the blockchain.

I think this argument ignores a most important reality of the Bitcoin technology. Today we seem to constantly compare bitcoin to VISA, as if it will be the measure of success. In a world of widely used digital currency, I think VISA capacity will look like the stone age.

The best analogy I can make is predicting internet usage by using AT&T call volume from 1980 as a benchmark. Where people once shared a single phone line to make a handful of calls (connections) per week, today most individuals have multiple devices that are always connected to the internet, exchanging millions of bits of information over thousands of dynamically routed connections throughout the day. Right now, sitting at your computer, try to count how many connections you have going. Or better yet, get a sniffer like Little Snitch and watch the endless communications happening behind the scenes.

Computers cannot open bank accounts and get debit cards. They can trade bitcoin. We are talking about the machine-payable web. Computers paying each other without their users even seeing, just like dynamic internet connections today. We will ultimately need a network that can secure 1000x or more than even the capacity VISA manages today.

Main Idea: I truly believe mainstream adoption of the first cryptocurrency will have nothing to do with a short-term 2x or 4x on-chain capacity increase. It will hinge on the first blockchain that manages to secure a 1000x increase without risking the open, decentralized immutability of its core chain.

2mb and 4mb blocks may not result in severe damage to the network's decentralization, but doing so before fixing the quadratic increase of signature-hashing still creates a serious attack vector. In addition, it is a drop in the ocean in terms of mainstream adoption. Amazon receives orders at 35 transactions per second throughout the year, and the 2015 holiday season saw volume spikes of 600 transactions per second. Amazon traffic alone leaves us with a growing mempool all year round even at 5mb blocks.

There is no world where Bitcoin can handle that kind of volume using base layer, on-chain transactions and still remain a decentralized network. Which means it will not be immutable, it will not be secure, and it will be run by only a handful of massive nodes that can be easily manipulated by politics.

TL;DR When the bitcoin community consists of scarcely a hundred thousand hodlers, some dark-webbers, and a few thousand devoted users, on-chain transactions work fine as the payment network. But Bitcoin cannot secure on-chain for a million or more active consumers and their everyday transactions while continuing to grant freedom from government and central bank manipulation. Much less, handle the countless future uses that Bitcoin enables. Amazon alone proves this. Please do not prioritize short-term adoption in hopes that we can all get rich if we just hard fork. Decentralization and security should be our top priorities. I've said this before and I'll say it again, this technology isn't about building a better Paypal, it is about changing the world.

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Bitcoin

REALITY CHECK: Amazon alone would backlog 4mb blocks *during the off season*. On-Chain TXs cannot act as the payment layer, they should be solely developed to provide unbreakable *immutability.* (reddit.com)

The argument I have consistently heard for larger blocks is that it wont greatly damage decentralization because drive space and bandwidth will scale to meet the growing costs of housing and validating the blockchain. I think this argument ignores a most important reality of the Bitcoin technology. Today we seem to constantly compare bitcoin to VISA, as if it will be the measure of success. In a world of widely used digital currency, I think VISA capacity will look like the stone age. The…

Bitcoin

BitGo Claims Its Software Not at Fault during Bitfinex Hack

BitGo has declared that its systems were not breached, and its software functioned correctly during the Bitfinex hack. Co-founder and CEO at BitGo, Mike Belshe, wrote on the company’s blog saying: Our job is to protect your Bitcoin and continue to improve the security of the service. BitGo systems were not breached in this attack and our software […]

The post BitGo Claims Its Software Not at Fault during Bitfinex Hack appeared first on CCN: Financial Bitcoin & Cryptocurrency News.

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replicating in python what the electrum wallet does during (deterministic) wallet creation

I am trying to replicate in python what the Electrum wallet does during (deterministic) wallet creation. IMHO the docs are a bit sparse on this one bit maybe because its only performed once for most users, all the tutorials etc. seem to focus on the GUI, and I was unable to work out the python code from the spesmilo github for electrum.

From what I can see, Electrum generates a random Wallet Generation Seed

  1. a 13-word mnemonic(or 12 words plus checksum?)

  2. which is unencrypted This is also the Master Private Key?

  3. Then the user enters a password/passphrase(or not) that encrypts the seed so it can be saved as a wallet(file)

  4. The wallet file can only be decrypted with the password/passphrase

  5. Then a Master Public Key is generated from the wallet [Anybody have more detail on this?].

  6. Then the 25-byte binary Bitcoin Address = {[MPK>sha256>RIPEMD160]+[MPK>sha256>RIPEMD160>versionByteadd>sha256>sha256>first4bytes]}

  7. which in turn is Base58Check encoded to the Bitcoin Address format

Can someone please check if my assumptions (1 to 7) are okay/correct me? Also, below is how far I got with python(probably grossly incorrect!):

from electrum import mnemonic import ecdsa import hashlib import base58 import getpass  mnemonicInstance = mnemonic.Mnemonic(lang='en') randseed = mnemonicInstance.make_seed() print "this is my 13 word wallet gen seed" + randseed private_key = mnemonicInstance.mnemonic_to_seed(randseed , getpass.getpass()).encode('hex') print "this is my private key: " + private_key #the line of code below failed!: sk = ecdsa.SigningKey.from_string(private_key.decode("hex"), curve = ecdsa.SECP256k1) vk = sk.verifying_key public_key = ('' + vk.to_string()).encode("hex") print "this is my public key: " + public_key ripemd160 = hashlib.new('ripemd160') ripemd160.update(hashlib.sha256(public_key.decode('hex')).digest()) middle_man = '' + ripemd160.digest() checksum = hashlib.sha256(hashlib.sha256(middle_man).digest()).digest()[:4] binary_addr = middle_man + checksum addr = base58.b58encode(binary_addr) print "this is my BTC address: " + addr 

(some of the above lifted from Shultzi’s github) I also consulted Andreas’ Mastering Bitcoin but not had much joy with this bit.

Recent Questions – Bitcoin Stack Exchange

Restrict the Bitcoin usage only during a particular period

I would like to know if its possible to use a Bitcoin at present in the following scenario.

When I send a Bitcoin to an another user,I set certain parameters on the Bitcoin, like it can only be used from this particular date to an another particular date. And restrict the usage of Bitcoin if its being used some other time.

Can I use it like this ?

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