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Andreas Antonopoulos Makes Bold Prediction on Bitcoin Consensus

Source: bitcoin

Antonopoulos

Andreas Antonopoulos surprised a crowd at a Berlin Bitcoin conference last week by claiming that, by the end of this year, Bitcoin’s consensus algorithm will be totally changed.

Also read: BitcoinAverage Report: Bitcoin Price Hits 2016 High

Antonopoulos: Bitcoin Will Become a ‘Hybrid’

The prediction comes after a much-publicized block size debate in which developers have disagreed on how to update the Bitcoin system in order for it to keep pace with growth in transaction demand.

Antonopoulos.com

“By probably the end of 2016 Bitcoin will have a hybrid of Proof-of-Work proof of stake system,” Antonopoulos told conference attendees in a video available on YouTube. “Because Lightning Network is a Proof-of-Stake system, and people haven’t yet realized that Lightning Network is a proof-of-stake system.”

The repeat Joe Rogan guest continued: “In order to set up a functioning channel on Lightning Network, you have to commit money to a multi-sig address, and the more money you have committed to a multi-sig, the [higher] transaction rate it can handle and the more fees it can generate locally. Only it’s a completely trustless proof-of-stake system based on Bitcoin transactions running on top and guaranteed by Bitcoin’s proof-of-work.” Antonopoulos notes he only realized this six months ago.

“I had to go to one of the developers who is writing it, just to make sure I am getting this right. He said, ‘yeah you could call it [a Proof-of-Stake].’”

According to Antonopoulos, Proof-of-Stake could play a large role in Bitcoin’s consensus algorithms in the future. He claims it could allow the Bitcoin network to scale with increasing transaction rates better than does the current Proof-of-Work model.

Proof-of-Stake is an alternative to Proof-of-Work consensus algorithms. They are both similar in that they attempt to provide consensus and prevent double-spending.

Proof-of-Work involves some type of work in order for a block to be produced. Proof-of-Stake requires users to put up some amount of coins which correlates with how much digital currency they can mine.

Bitcoin’s Proof-of-Work currently cannot scale due to the block size limit. Certain Bitcoiners say this might be solved with a Proof-of-Stake system.

A Proof-of-Stake system theoretically results in lower transaction fees as less computing power is needed to produce blocks. Bitcoin’s Proof-of-Work entails producing data, a time-consuming endeavor. Difficulty in Proof-of-Work systems can vary. Oft a random process, this trial-and-error method of computational problem solving can be designed  for a low probability for a block to be produced, as is the case with Bitcoin. Bitcoin’s Proof-of-Work  is based on the SHA-256 cryptographic hash function.

Lightning Network strives to use smart contract functionality in the blockchain for instant payments across its network of participants. The Lightning Network is designed as an added layer to the blockchain. It combines Bitcoin’s blockchain transactions with its native smart-contract scripting language. According to the Lightning Network, this means a “secure network of participants which are able to transact at high volume and high speed.”

Lightning wants to conduct transactions off-blockchain, removing the limits of using the blockchain: By making the transactions and scripts parsable, the smart-contract can be enforced on-blockchain. Only in the event of non-cooperation is the court involved – but with the blockchain, the result is deterministic.”

In February, Antonopolous tweeted: “I don’t get all the animosity and conspiracy around Lightning Network. I think it’s really [an] amazing innovation & great solution to scaling.”

Developers on Bitcoin.StackExchange are not as convinced as Antonopolous is about designating Lightning Network a pure Proof-of-Stake system. Staking usually entails updating a network’s status. One earns fees by helping to validate and secure the network. Lightning Network also offers a smart contract platform. Participants can earn fees by providing liquidity. Nodes on Lighting Network forward payments. Lightning Network does not verify nor secure transactions. Consensus, rather, is created by Bitcoin’s Proof-of-Work.

Bitcoinist.Net reached out to Lightning Network but did not hear back before publication.

What do you think about Antonopoulos’ comments? Let us know in the comments below!


Images courtesy of LondonReal, Andreas Antonopoulos. 

The post Andreas Antonopoulos Makes Bold Prediction on Bitcoin Consensus appeared first on Bitcoinist.net.

Andreas Antonopoulos Makes Bold Prediction on Bitcoin Consensus

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Dub 20

Bitcoin Core 0.12.1 Released, Focus on Block Size Scalability

Source: bitcoin

Bitcoin Core

Bitcoin Core has announced the release of a new update, Bitcoin Core 0.12.1. Focusing on scalability, this follows the “Capacity Increases Roadmap” they detailed December 23rd of last year, with Aprils focus to “deploy segregated witness (including Blocksize increase)” according to the table taken from the Bitcoin Core website below.  The release comes during a contentious time for Bitcoin as there are multiple side of an ongoing debate to increase the block size from 1 mb to 2 mb or larger.

Also Read:  Bitcoin Taxes 2016: Accurately Reporting Bitcoin Usage

Bitcoin Core 0.12.1 Changes

Multiple changes have been detailed that laid groundwork for the Lightning Network, a scalable network of instant Bitcoin and blockchain transactions powered by blockchain smart contracts. Bitcoin Core 0.12.1 also has the ability for up to 29 “parallel soft fork deployments at the same time,” thanks to BIP 9 “version bits.” Not only will it allow more changes to occur at the same time, but these changes will also happen in a faster and more decentralized manner.

The new update also looks to activate BIP 68 sequence locks, BIP 112 OP_CHECKSEQUENCEVERIFY and BIP113 Median time past, or collectively known as “CSV” deployment. However, miners cannot begin voicing support for or against these new changes until May 1st, 2016. BIP 112 is especially important for the Lightning Network, as it will allow Bitcoin to be used in numerous bi-directional payment channel situations.

While we have made some progress into scaling through the introduction of segregated witness, lipsecp256k1 verification, and now the various BIPs included with Bitcoin Core 0.12.1, we still have a long way to go before Bitcoin can rival the transaction capacities of payment networks like VISA or AMEX. The block size debate is also a problem that needs to be solved as well before Bitcoin can truly be a currency used by the majority of the people around the world.

How to Upgrade/Downgrade

To upgrade from an older version, make sure any instances on Bitcoin Core are shut down. Once this happens, run the installer of the new Bitcoin Core, and you’ll now be running the version. If you want to downgrade, note that 0.12.0 and later are not compatible with pre-0.12 versions, so you’d have to reindex when you start the earlier version of Bitcoin Core to make sure everything is functioning correctly.

Bitcoin Core update shows promise. It will be interesting to see what the next step is towards segregated witness and a larger block size.

What are your thoughts on the latest release from Bitcoin Core? Let us know in the comments below!

The post Bitcoin Core 0.12.1 Released, Focus on Block Size Scalability appeared first on Bitcoinist.net.

Bitcoin Core 0.12.1 Released, Focus on Block Size Scalability

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