Led 12

Lightning Network Without Invoices Brings Us Closer to Streaming Money

A new feature for Bitcoin’s Lightning Network (LN) implementation allows users to send funds instantly without needing to first create an invoice.


Sphinx Enables ‘New Use Cases’

The latest upgrade, ‘Sphinx,’ which developers describe as being a “work in progress,” is nonetheless already available to anyone.

“The coolest part about this new feature is that it can be used today in the wild as long as both nodes are updated to this branch!” author Olaoluwa Osuntokun wrote in a Github repository dedicated to the project.

The Lightning Network is a protocol currently active for Bitcoin and Litecoin which allows users to send tokens instantly and for a fee averaging less than 1 US cent.

The technology debuted on the Bitcoin network a year ago, and has grown rapidly, but remains in an experimental state as developers iron out stability and reliability issues.

At present, sending or receiving a transaction still requires some technical understanding, which has made Lightning an unattractive option for entry-level users despite its time and cost benefits.

Lightning’s ‘Best’ Feature Yet?

Sphinx, which Osuntokun says “allows users to start exploring a new set of use cases,” aims to solve that predicament.

It removes the need to create a payment invoice for a transaction, allowing more “spontaneous” activity and sidelining a major technical element potentially off-putting for novices.

“This is only a draft implementation and while it works today on mainnet out of the box (if both sides are upgraded) much this will likely change,” he added.

Sphinx caps a frenetic development period for LN which continued throughout 2018. Despite fluctuations, capacity, node and channel numbers have all reached new highs in recent weeks.

According to data from monitoring resource 1ML, Bitcoin Lightning’s capacity is now 571 BTC ($2,076,000) among 5234 nodes and 19,500 channels.

Sphinx meanwhile has already begun to see a warm reception, commentators variously saying it had attracted them to start using Lightning and that it was now the network’s “best” feature.

What do you think about the Lightning Network’s Sphinx? Let us know in the comments below!


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Led 03

MIT: Blockchains Will Become ‘Boring’ in 2019

‘Boring’ isn’t usually a word associated with blockchains. However, according to a recent article by MIT Technology Review, that’s exactly what they will become this year — as well as more useful.


You don’t have to be a crypto veteran to know that this industry is famously volatile. The highs and (mostly) lows of recent months are characteristic of the crypto space. An 80 percent drop in value from one year to the next is par for the course in this 10-year-old space. 80 percent increases in one month can also happen, just look at Ethereum.

Dangerous, volatile, unstable, speculative–these are all words you expect to hear when you mention cryptocurrency, but ‘boring’ doesn’t usually appear. And yet, according to MIT, that’s exactly what will happen in 2019:

In 2017, blockchain technology was a revolution that was supposed to disrupt the global financial system. In 2018, it was a disappointment. In 2019, it will start to become mundane.

2018 Was a Year of Disappointment – And Progress

While the focus for many has been on price throughout 2017 and 2018, a large chunk of the blockchain community has been getting on with business as usual. Yes, some of the magic may have left the blockchain space. That’s only natural after so much over-promising and marketing hype.

However, this year will see many excellent projects making good on their promises and delivering what they proposed in their ICOs. 2018 may not have been the best year for prices, but blockchain technology has seen more innovation than any other year.

If you need evidence of that, look no further than the progress the Lightning Network has made in this image below.

Institutions and Big Business Are Getting In

According to the MIT article, if you want a sign that blockchains will finally start to bear fruit this year, look no further than the fact the both Walmart and Wall Street are getting in on the game.

Walmart has been testing a private blockchain system for years and seeing success tracking foods around the world in the supply chain. In 2019, the global giant will make this system mandatory for its leafy green vegetable suppliers to join by Q3.

Moreover, despite the cryptocurrency market displaying worrying lows and losses in 2018, the parent company of the New York Stock Exchange, ICE, is bringing Bakkt to the market in early 2019 after an incredible first round of funding.

Bakkt just raised a sensational $182.5 million from big-name investors like Microsoft, Pantera Capital, and BCG.

Fidelity is also throwing its hat into the ring with a custody service for crypto assets called Fidelity Digital Assets. Whatever the outcome of Bakkt, Fidelity, and crypto this year, blockchain technology is being taken extremely seriously by institutions.

Smart Contracts to Be Used for Real-World Issues

Ever since smart contracts came about, their potential for real-world use has been undeniable. But alongside that, the potential for great damage is also high. There are still many bugs in smart contracts that have to lead to huge losses in funds such as the Parity Wallet loophole.

However, smart contract technology has been improving and several companies will be showcasing smart contracts in the real world this year.

why use blockchain

The problem of “garbage in garbage out” (or in technical terms, having a trustworthy source of data in the form of an “oracle”) has been solved by companies like Chainlink launching the first, “provably secure, decentralized oracle network” ensuring the data is trustworthy using cryptography.

We can expect to see smart contracts used in the legal field and at basic contract completion level this year. There’s even the possibility of state-backed cryptocurrencies as eluded to by Christine Lagarde, head of the International Monetary Fund, as a way of accelerating financial inclusion.

It’s unlikely that FedCoin will happen next year. In fact, it’s rather unlikely that it will happen at all when you consider that adding a central authority to cryptocurrencies rather defies the point in the first place.

But with all the new projects launching in 2019–actual working solutions and not just ideas–real institutional funds and backing, blockchains may be getting boring but they are certainly going to start being useful.

Do you agree with MIT’s prediction? Share your thoughts below!


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Led 01

Bluewallet Lets You Send Bitcoin Lightning Payments from Your iPhone

Bluewallet appears to be setting the bar for the next generation of Bitcoin wallets. Available for both Android and iOS, it is the first to integrate the Lightning Network (LN) for super-quick and “unfairly cheap” transactions.


First Bitcoin Lightning Wallet on iOS

It should be mentioned that this review is largely aimed at users who are either not tech-savvy enough or don’t have have the time or both (like me) to set up their own Lightning nodes.

I’ve used a few iOS Bitcoin wallet apps over the years and all of these have their pros and cons. However, as far as simplicity, ease-of-use, and security are concerned, I can confidently say that Bluewallet is the best iOS Bitcoin wallet app I ever used. 

It combines the latest Bitcoin technology (SegWit, LN, Replace-by-fee etc.) with some nifty security features (plausible deniability) alongside the simplest user experience to date.

Note: Bluewallet did not pay me for this review and never contacted me.

I recently found out about this app, which was launched in early December, on Twitter. The wallet caught my attention since this is the first open-source Bitcoin wallet for iOS that supports Lightning Network so I decided to check it out.

As far as I can tell, it is the first wallet that allows you to:

  • Refill the LN wallet with an on-chain transaction without closing/opening a new one
  • Backup (export) the LN wallet with a QR code/URL
  • Use the same LN wallet across multiple devices

It should also be mentioned that while you control the BTC wallet’s private keys, the LN part is custodial by default running Bluewallet’s LNHUB+LND. But, if you already have your own LND node, you can run LNHUB software yourself (it’s open-source) by entering your URL in the Lightning wallet settings.

Not Many Options for iOS

Just like many other people, my first ever Bitcoin wallet experience was with Blockchain wallet in 2014. It was one of the first Bitcoin wallets available for both Android and iOS mobile platforms.

Currently, I’ve been using Edge wallet (formerly known as Airbitz) for the sole reasons that it is ‘secure’ (you control the private keys) and one of the few that supports SegWit (cheaper transactions) along with many altcoins like Monero and Ethereum.

While I believe Edge is one of the best wallets available for iOS today, I miss the watch-only address feature that Blockchain wallet always had — so there were always tradeoffs.

Watch-only addresses let you — as the name implies — only see the balance of your cold-storage wallets. So even if your Ledger Nano S is buried in a nuclear bunker, you could still safely monitor its balance from afar.

However, security should be paramount to every Bitcoin user. Thus, controlling your own private keys is a must and since there weren’t a lot of options for iOS – Edge wallet it was. (I’ve also tried the popular BRD wallet but I wasn’t a fan).

Blown Away By Simplicity

Setting up a wallet in Bluewallet took less than 20 seconds and you have a choice between a regular HD (hierarchical deterministic) wallet or SegWit. You can also import an existing wallet using your seed.

Done. Creating the Lightning wallet is just as quick.

You then have an option to encrypt (recommended) your wallet’s privet keys with a single password. This makes the experience similar to signing up for a new Gmail account — which makes the entire process very easy and familiar, particularly for those new to Bitcoin.

There’s also a genius feature against $5 wrench attacks called Plausible Deniability.

Next, you’ll need some coin to play with. So refill your Bluewallet by sending an on-chain transaction with some BTC from another wallet. If you don’t have any — it’s possible to buy bitcoin (from Changelly) right from the Options menu.

The whole interface is the cleanest and most intuitive I’ve used to date. The wallet also lets you set a custom transaction fee when sending bitcoin.

Replace-by-fee is another useful feature. If you ever set a fee that is too low — you now have the option to set a higher fee (after you already clicked ‘send’) and speed up the transaction. 

Lightning Network Works But…

So I sent about $4 to my new BTC wallet. About 20 minutes lates after all the confirmations (at least 2), I sent about a few bucks in bitcoin to ‘refill’ my new Lightning address.

Bluewallet notes that your LN wallet is intended for day-to-day transactions because they’re faster and “unfairly cheap.”

After about five confirmations, the LN wallet had satoshis in it and was ready to strike. However, since only one LN wallet can be set up in the app (for now), it was impossible for me to try sending sats back and forth within the app.

So I told my friend to try it. Unfortunately, the LN wallet doesn’t yet support receiving (invoicing) lightning payments yet, so we were unable to send any Satoshis between each other.

Luckily, I did manage to send an LN payment of six cents to read a full article on Yalls.org. This went through instantly and without a problem as clicking ‘check payment’ on Yalls immediately showed that the payment has been sent.

A Glimpse into the Future of LN Payments

Using this wallet gives a glimpse into the future of paying with Bitcoin as LN grows and all the software issues are ironed out. Once LN payments will become seamless, using it should become second nature as transactions are literally instant at almost zero cost.

This should provide a great solution for merchants and in-store payments (e.g. Starbucks) as it eliminates the problem of having to wait for on-chain confirmations – a common criticism of using Bitcoin at brick-n-mortar locations.

Moreover, legacy digital payments (credit cards, Venmo etc.) are already instant and ‘cheap’ for users so the breakthrough will not come from speed. However, LN is not only “unfairly cheap” but also allows sending less than a satoshi – the smallest unit in Bitcoin. This means users are already sending tiny fractions of a penny, as recently reported by Bitcoinist.

Therefore, I believe, this technology will create new opportunities for online micro-payments and monetization of digital content, which could be a game-changer in the Information Age. In the meantime, however, this wallet will make it possible to ride a Lightning scooter.

Or maybe a Lightning beer?

Shortfalls

There are admittedly some shortfalls with Bluewallet. Though most of these gaps are expected to be filled later.

For example, the biggest problem right now is the inability to receive LN payments and make withdrawals from the LN wallet back to the BTC wallet. Therefore, you should only test the LN wallet with a small sum since you will not be able to get the satoshis back to your on-chain Bitcoin wallet (for now).

Software developer Irek Zielinski explains that upcoming versions of Bluewallet will support invoicing, which means bidirectional LN transactions.

Another issue is the lack of PIN or Touch-ID/Face-ID support. Though understandably, a lack of PIN code make it easier to use for the average joe, I’d like to at least have the option to set up a PIN code for accessing the app or some kind of 2-factor authentication for extra security.

Other features in the pipeline include:

  • Batch TX – the ability to pay multiple addresses with a single transaction, saving on fees and optimizing blockspace usage.
  • MultiSig TX – enhanced security as each transaction requires M of N signatures (with keys stored on different physical devices with BlueWallet).
  • Plugging in your Bitcoin Core node for “maximum sovereignty.”

These additions should make Bluewallet, hand down, the best wallet for both iOS and Android users and Bitcoin businesses, in particular. In whole, this is a great wallet if you’re looking to have the latest security features, ease-of-use, Lightning payments, and tired of waiting for Samourai Wallet to be released for iOS.

Have you tried Bluewallet? Share your experience below! 


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Lis 20

Bitcoin Public Full Node Count Surpasses 10,000

New data released by Coin Dance this week shows that the number of bitcoin public nodes made a significant jump. The reported 10,094 public nodes places the total number back over 10,000 for the first time since March.


Hard Core

Around 95 percent of the nodes are running Bitcoin Core, a proportion which has remained steady since early 2018. The Bitcore software follows not-so-closely behind, commanding just 2 percent of the nodes — 198 to Core’s 9648.

global currency

Then there are 56 nodes still running Bitcoin UASF, which was developed to counter miners’ reluctance to adopt SegWit back in August 2017. As Bitcoinist reported last month, many in the industry consider that movement as an emphatic victory for users over corporate interests.

After peaking at 1.35k nodes at the time of the proposed fork, UASF nodes quickly dropped off after the success of their mission. The past year has seen numbers falling more steadily to their current level. The movement and consequent hard fork of BTC 00 and BCH, did however spur an impressive increase in node uptake.

Most software iterations are currently losing nodes to Bitcoin Core. One exception to this trend is Bitcoin Knots, which has seen 10 new nodes in the last week.

Lightning Bolt

Meanwhile Lightning Network continues to go from strength to strength, racking up 4000 nodes earlier this month. This caused the main net capacity to reach an all-time high of 118 BTC.

Why Node?

Any user can set up a bitcoin full node, and there are several reasons why you might want to. Apart from the warm and fuzzy feeling you’ll get from knowing you are helping the bitcoin network, that is.

Running a node gives users increased security and privacy, as there is no need to rely on third party service providers. It also gives users a choice in how the network develops, through the software implementation you decide to run. And it isn’t as difficult or expensive as you may think.

What are your thoughts on the jump in Bitcoin nodes? Let us know in the comments below!


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Zář 20

There’s a ‘Concerted Effort to Suppress Litecoin Price,’ Says Charlie Lee

Litecoin creator, Charlie Lee, took to Twitter, complaining about recent efforts to “suppress Litecoin price” with FUD spreading by those “shorting LTC and… that see Litecoin as a threat.”


Big Up Da Litecoin

Lee had a lot to say regarding accusations that Litecoin 00 had lost its edge in an increasingly oversaturated market.

Illustrating the high level of security in the network, he highlighted the miners’ lack of incentive to attack it, as this would devalue $150 million of hardware investment. He also mentioned Litecoin’s domination of Scrypt mining.

Regarding liquidity, Lee pointed out that Litecoin trades on virtually every exchange. Nine major payment processors support it, and the network processes $200 million of transactions every day.

Charlie Lee: LN Doesn’t Make Litecoin Obsolete

Rather than making LTC redundant technology, Lightning Network actually plays nice together with both Bitcoin and Litecoin, according to Lee. Many LN clients/apps support Litecoin, allowing atomic swaps, and even submarine swaps, using LTC to pay lightning BTC invoices. He adds:

Litecoin will always be the cheapest and fastest on ramp to Lightning Network.

Even if Litecoin’s only value were as a bitcoin test-net, Lee argues that its value is greater than the 3 percent of bitcoin’s market cap it currently represents.

Litecoin’s practical proof of SegWit utility enabled its adoption and activation on the Bitcoin network. This kind of testing is not possible on the real Bitcoin testnet, as valueless coins create no incentive for malicious actors to hack it.

Litecoin (LTC)

Charlie DOES Care and Litecoin IS Still Being Developed

Lee caused a scandal last year when, faced with accusations that he was acting for ‘personal benefit,’ he sold and donated all his LTC holdings. He has since stated that he will never buy back in, backing up his claims of “conflict of interest.” However, he also recently appeared to favor Bitcoin over Litecoin as an initial crypto investment.

Despite this, his tweets confirm that he is still working on Litecoin full-time and promoting Litecoin adoption. Countering suggestions that Litecoin has had no development in the past 6 months, he highlights two updates in the past 2 weeks. He also points out that it is good practice not to do development work “on the master branch, where people are looking.”

As would be expected, responses to the tweets vary from the “Litecoin rulez! Charlie is my hero!” school of thought to “Well why did you sell yours then?”

You can please some of the people, some of the time, eh?

Are there concerted actions being taken to suppress Litecoin price? Share your thoughts below!


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Srp 15

New Transport Layer bloXroute Promises to Solve Bitcoin’s Biggest Problem

bloXroute Labs and a team of Northwestern University students believe Bitcoin’s biggest problem, scalability, can be solved without affecting its chief virtue — decentralization.

Northwestern and bloXroute Labs Are Working to Solve Scalability Issue

Critics have always identified the limited number of transactions that Bitcoin’s 00 network can process as its most significant problem. They point out that this is what has prevented Bitcoin from becoming the most effective form of payment in the world.

Several techniques have been and are currently being implemented to address the issue of scalability and high transaction fees. Nevertheless, they are not good enough to compete today with Visa, for example.

bloXroute Labs identifies the problem that affects Bitcoin and other cryptocurrencies’ networks, as follows:

Specifically, they employ a trustless P2P network model to propagate transactions and blocks, which does not scale as the volume of transactions increases, a fact research has shown time and again. Indeed, if blocks and transactions were to be instantly propagated, immense blocks could have been mined at a rapid pace, until the limitation of designated processing units and flash storage arrays was reached.

Now, a team comprised of bloXroute Labs engineers and students and academics of Northwestern University believe they have found a trustless scheme to overcome this scalability bottleneck.Now, a team comprised of bloXroute Labs engineers and students and academics of Northwestern University believe they have found a trustless scheme to overcome this scalability bottleneck. According to Watch Market:

The Northwestern University proposal attempts to address some of those issues by creating an infrastructure that compresses the information on the blockchain before sending, with the propagation being it will go faster.

In this regard, bloXroute Labs proposes bloXroute, a transport layer that would run underneath, allowing Bitcoin and all cryptocurrencies to scale to thousands of chain transactions per second.

According to the whitepaper entitled bloXroute: A Scalable Trustless Blockchain Distribution Network,”

“bloXroute allows to safely increase the block size and to cut down the time interval between blocks, without increasing the risk of forks, and provides real-time support for immediate transactions with zero-confirmation (0-conf).”

The whitepaper stresses that by using bloXroute, the network becomes even more decentralized because it requires neither consensus nor a protocol change beyond adjusting system parameters.

Technological Advances Are Fueling Bitcoin Optimism

Novel technological initiatives that include SegWit, Lightning Network, and Atomic Multi-Path Payments over Lightning, and new features in Bitcoin Core 0.16.0, are also promising to help to address Bitcoin’s scalability issue.

For example, Lightning Network is growing and enabling faster transactions among nodes. As of this writing, Lightning Network boasts over 3,000 nodes, with a capacity of about 82 bitcoins.

The Northwestern University team started working in this project in March 2018, and claims to be moving forward to solving the scaling issue. According to Sarit Markovich, professor of strategy at Kellogg School of Management at Northwestern University,

“We are scaling at 100 times better than what Bitcoin 00 is doing now. And we are hoping for 1,000.”

Do you think the newest technological innovations are helping to solve cryptocurrencies’ scalability issues? Let us know in the comments below!

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Images courtesy of Pixabay, Wikimedia/by Rdsmith4

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Úno 27

Crashes And Failed Payments: Peter Todd Urges Caution Over Lightning Network

· February 27, 2018 · 11:30 am

Bitcoin Core developer Peter Todd has delivered a frank appraisal of the Lightning Network, suggesting it is technically insufficient in its current form.


Lightning’s Growing Pains

Writing about his “initial impressions” of Lightning’s testnet implementation on Twitter Monday, Todd questioned aspects including operational resilience and programming language.

“Initial impressions of Lightning on testnet: c-lightning segfaults a lot, and when it’s not crashing payments fail more often than not. Writing it in C – a notoriously dangerous language – doesn’t strike me as a good idea,” he wrote.

Since its mainnet debut at the start of the year, the Lightning Network has grown rapidly, but cryptocurrency experts and developers remain divided over whether the technology is ready for use at all.

Future Vulnerability Today

The most hotly awaited of the so-called ‘Layer 2’ Bitcoin network improvements, Lightning promises near-zero transaction fees and confirmation times.

This month, Microsoft threw its weight behind the project, pledging support for it as an off-chain Bitcoin scaling solution while pouring cold water over on-chain solutions such as block size increases.

On a technical level, however, the experimental state of Lightning remains evident. Figures including Bitcoin.org creator Cobra preceded Todd in voicing doubts about a consumer rollout given the untested nature of many of its features. The result, both say, could be lost funds.

“As for the Lightning protocol, I’m willing to predict it’ll prove to be vulnerable to DoS attacks in it’s (sic) current incarnation, both at the P2P and blockchain level,” Todd meanwhile predicted.

“While bad politics, focusing on centralized hub-and-spoke payment channels first would have been much simpler.”

Lightning has also faced caution from Andreas Antonopoulos, who despite championing its technological promise saw regulatory woes forcing major cryptocurrency exchanges to avoid offering it.

This week meanwhile also saw Bitcoin Core release version 0.16.0, a major milestone incorporating full support for SegWit scaling improvements, itself a useful foundation for allowing Layer 2 solutions to spread.

What do you think about Peter Todd’s angle on the Lightning Network? Let us know in the comments below!


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Led 10

Bitcoin Fees Near-Zero as Company Launches Mainnet Lightning Payments

· January 10, 2018 · 6:00 am

Anonymous VPN service TorGuard has become one of the first consumer businesses to accept Lightning Network (LN) payments for Bitcoin.


‘Testnet Is So Boring’

In messages on Twitter staff since appeared to back up privately, TorGuard confirmed users can now pay for its services in Bitcoin using Lightning, significantly reducing transaction times and fees.

The news makes the company a pioneer of Bitcoin mainnet LN payments after the technology debuted as a testnet interface last month.

“Disclaimer: c-lightning is not production ready. TorGuard will cover loss of funds when sending us LN payments. Testnet is so boring,” tweets added.

One Transaction = One Satoshi?

Excited community members reacted broadly positively to a customer service representative similarly offering LN payments, seemingly unaware TorGuard had already publicly announced the new feature.

“Do you have (an) LN (mainnet) node up and running? If so, I can invoice you for 1 month of our service for only 1 satoshi,” the representative offered.

This last point appeared to cause contention, responses arguing the actual cost of a Lightning transaction would be significantly higher than the $0.‎00014167 quoted due to the need to open and close a channel before and after.

Bitcoin advocates have long championed Lightning as the crucial solution to the ongoing high transaction fees and slow confirmation times which have plagued the network since its mass uptake which began around one year ago.

While altcoins such as Bitcoin Cash and most recently Ripple have jumped on the problem as proof their offerings are more valuable than Bitcoin, early adopters remain confident that so-called Layer 2 updates such as LN payments will make such arguments null and void.

Late last month, Bitcoin-based cellphone top-up service Bitrefill also began using Lightning mainnet payments to fulfil customer orders as part of successful “limited testing”.

What do you think about the launch of mainnet Lightning Network payments? Let us know in the comments below!


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Srp 25

Segwit Activated: How it Works & What’s Next for Bitcoin

· August 25, 2017 · 4:00 am

Segregated Witness, or Segwit, has finally been activated by a super majority of the current hashpower on the Bitcoin network. Segwit fixes many bugs currently in the protocol, and allows for some scaling using an effective blocksize increase.


Almost two years of debate

In December of 2015, the source code for Segregated Witness (Segwit) was released. It was meant as a fix for the ever-problematic transaction malleability bug, which allowed for someone to change one or two characters of a transaction’s ID before it was cemented into the blockchain. Along with that, it provided a method of scaling Bitcoin. Doing away with the concept of a blocksize, a new metric was made called blockweight.

For years the software was not added to the Bitcoin protocol as it never garnered the necessary 95% of the hashpower needed to activate. It was to be implemented though means of a softfork, which meant it would comply with all currently consensus rules and be backwards compatible with those running old software and did not wish to upgrade.

Whether you believe that Segwit was a direct result of the grassroot approach of BIP148 forced miners to finally activate it after all this time, or the New York Agreement was the reason everyone came together to signal for Segwit, it is finally here.

A second BIP was released weeks ago to lower the activation threshold to 80% of the hashpower, but even with the lowered bar Segwit still achieved around 97% signaling and locked in during the beginning of August.

After the official lock-in period, the network allowed for two weeks to provide grade period of sorts for people to upgrade their software to work with Segwit.

How Segwit Works

There has been a ton of misinformation about Segwit, so this article will hopefully clear some things up of how it actually works. As stated earlier the whole idea of a blocksize has been gotten rid of. Instead, the network will now use blockweight.

There’s two types of data that are contained in a transaction. Firstly, there is actual transaction data, such as the address the coins are being sent to. Then there is the witness data, which is all the information that is only needed when the transaction is confirmed, and then that data is essentially never used again.

Segwit provides a “discount” to the witness data, and once committed to the blockchain it gets pruned. These 1000 1KB transactions would obviously fill the current blocksize of 1MB, but remember blocksize isn’t even a metric any more. It’s been replaced by blockweight, the new limit of which will be set at 4,000,000 “units.”

The way the new unit system works is the number of units in a transaction is simply the number of bytes of transaction data multiplied by four. Witness data is, as said before, discounted. The bytes of the witness data are essentially a direct translation to units at a 1:1 rate.

So, for example, let’s say there’s 1000 transactions in the mempool, all at 1KB of data. Now let’s say in each of the transactions, 400 bytes is witness data and the other 600 bytes is transaction data. The 600 bytes for transaction data is now worth 2,400 units, while the witness data is now worth 400 units giving the whole transaction a weight of 2,800 units. All of these transactions together will only take up 2,800,000 of the 4,000,000 units, leaving room for more transactions.

Once the transaction is confirmed by the network, the not needed witness data will be pruned off the blockchain, to save storage space and decrease bandwidth use.

How Do I Actually Use SegWit?

For those of you expecting an immediate sign that Segwit is helping everything, I’m sorry to let you down. In reality, it could be weeks or even months before Segwit really starts to have widespread adoption.

Segwit transactions can only be sent from Segwit addresses. So, every single address that currently contains coins would have to send them to a Segwit address before we see the full effect of the upgrade. And even then, there could be a decent chunk of users who still don’t trust Segwit and don’t want to use it. Which is perfectly fine, that’s the point of a softfork. It doesn’t force users who don’t agree to it to upgrade to it.

For you to use segwit and send segwit transactions, you’ll need to send your coins to wallet that generates Segwit addresses. Otherwise, it will just be a normal transaction.

Moving forward, Segwit was an important setup to the upgrading and scaling of the Bitcoin network, which has been woefully overloaded in the past several months. Segwit opens the door to better implementation of the lightning network, which can allow for transactions to be sent off chain for pennies.

Coming in November, the second half of the New York Agreement is set to take place calling for a doubling of the blockweight to even further scale the network though means of a hardfork.

Will you be using segwit from here on in? How do you think this will effect the network? Let us know in the comments below!


Images courtesy of Shutterstock, Segwit.co

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Kvě 10

Litecoin Activates SegWit Today As Price Nears $40

· May 10, 2017 · 9:48 am

SegWit activation day is here for Litecoin as the fourth-largest cryptocurrency gains another 38% in price.

Litecoin Passes $35, Lee Remains Cool

With just several hours to go before its “locked-in” status changes to “activated”, investors are celebrating as Litecoin’s price per token exceeds $35.

The surge marks a turnaround in the altcoin’s fortunes, prices having suffered earlier this week as assets across the board hemorrhaged value.

Poloniex, a major altcoin exchange, experienced slowness and loading problems, which some pointed to as a major cause of panic selling resulting in a broad comedown.

On Twitter Wednesday, Litecoin creator Charlie Lee appeared naturally upbeat, noting nonetheless that this was just the start for his cryptocurrency.

SegWit Still King For Investor Confidence

The rags-to-riches story has been marked by overwhelming investor appetite for SegWit. The confidence that accompanied Litecoin locking in the technology appeared to engulf any misgivings or even alleged attempts to derail the process.

This in turn led to a rapid U-turn for two other altcoins, namely SysCoin and Vertcoin, which both successfully activated SegWit and benefitted from giant price rises.

As in the case of Litecoin, criticism that SegWit activation was simply a tool for developers to make money did not stop trading interest.

Now, Litecoin will no doubt be eyeing the next step in the chain – introduction of Lightning Network transactions.

Lightning Network Brewing

“The activation of segwit on Litecoin allows us to deploy Lightning on an active production blockchain,” Lightning’s Olaoluwa Osuntokun wrote in a blog post last week.

“With our ultimate launch, we’ll be able to examine monetary incentives within the network, observe the emergent properties of the networks’ channel graph, and see the rise of production services and applications built on top of the network.”

A survey conducted by Lee meanwhile suggested Litecoin users were keener on harboring their funds long term than testing Lightning.

Lee himself stated that he intended to both “hodl” and test the technology.

Across the altcoin board meanwhile, only a modest recovery is noticeable, while Bitcoin is also down from its near $1800 highs. The figures will likely be music to the ears of experts such as Vinny Lingham, who repeated warnings about “bubbles” in recent public comments.

What do you think about Litecoin after SegWit activation? Let us know in the comments below!


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