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Inflation Bug Still a Danger to More Than Half of All Bitcoin Full Nodes

Eight months after the discovery of the inflation bug, more than half of the full nodes on the bitcoin network are still running client versions susceptible to the vulnerability.

Figures published by bitcoin core developer Luke Dashjr show that more than half of the full nodes in the bitcoin network are still running client software vulnerable to the inflation bug discovered in September 2018.

This revelation poses some danger to the network, as software vulnerabilities are a clear and present danger to the fidelity of bitcoin (BTC). Now that the top-ranked cryptocurrency is in the midst of a positive price run, it is perhaps important that steps are taken to eradicate the inflation bug problem for good.

Most bitcoin full nodes still vulnerable to the inflation bug

As reported by Cointelegraph on May 8, research by Dashjr shows that more than 50% of full nodes on the bitcoin network are still running software versions of the bitcoin client that are susceptible to the inflation bug.

However, from that time, the figure has fallen slightly from about 60% to 54%. This means that, in the last few days, some full nodes have upgraded to a more recent client software update.

Back in September 2018, developers first discovered the inflation bug — which, in theory, could allow miners to inflate the total bitcoin supply beyond the 21 million BTC by spending multiple unspent transaction outputs (UTXOs) in the same transaction.

Given the nature of the bug, the developers kept it a secret, quietly releasing a new version of the client. An excerpt from the September 2018 common vulnerabilities and exposures (CVE) report released by Bitcoincore.org reads:

“In order to encourage rapid upgrades, the decision was made to immediately patch and disclose the less serious Denial of Service vulnerability, concurrently with reaching out to miners, businesses, and other affected systems while delaying publication of the full issue to give times for systems to upgrade. On September 20th a post in a public forum reported the full impact and although it was quickly retracted the claim was further circulated.”

One key takeaway from Dashjr’s analysis is the total number of full nodes on the bitcoin network. Most bitcoin literature sources put the number of full-node numbers at somewhere approaching 10,000.

However, Dashjr opines that this number is closer to 100,000 and that the reason for this discrepancy lies in the fact that many sources only account for nodes actively listening on the network.

Called listening nodes, these full nodes have open port connections that can be probed. However, not all full-nodes are listening nodes; some, hidden behind firewalls or configured to not actively listen for new connections, don’t have easily discoverable open port connections.

The severity of the inflation bug

To understand the severity of the inflation bug, it is important to know the mechanism by which the problem could be exploited. This process would involve a summary explaining of the double-spend attack, the inflation bug itself and the problems that could arise if left unchecked.

Bitcoin’s early success lends itself greatly to Satoshi Nakamoto’s — the creator of bitcoin — brilliant solution to the double-spending problem that had prevented the successful deployment and implementation of prior virtual currency systems.

By creating an immutable ledger with nodes validating transactions, it became almost theoretically impossible to spend the same UTXO in two different transactions.

The severity of the inflation bug

However, what happens when, instead of spending the UTXO in two different transactions, a malicious actor tries to use one transaction to spend UTXO multiple times? Because of the way bitcoin is engineered to work, this action would mean creating new coins virtually out of thin air, thus inflating the total supply — ergo, the inflation bug.

Several successive updates to the bitcoin software have tried to improve the blockchain’s immunity to the first type of double-spend attack. However, by the Core 0.14.x version of the bitcoin software client, developers began to notice there was a possibility of a distributed denial of service (DDoS) vulnerability in the software client.

The bug allowed a malicious attacker to crash nodes running the 0.14.x software version by attempting to spend the same UTXO twice. In this iteration of the bug, the objective would have been to crash as many nodes as possible and not necessarily inflate the total bitcoin supply.

In trying to fix the problem, the next released update, 0.15.0, included features that inadvertently allowed a malicious attacker to double spend the same UTXO in one transaction. Instead of causing a system crash, this new bug caused older software clients to recognize such double-spend transactions as valid.

Upon discovery, developers again released a new version of software before announcing it to the wider cryptocurrency community. However, several months after the issue ought to have been solved, it appears that more than half the full nodes on the network are still running client implementations vulnerable to the bug.

Cointelegraph spoke with Dashjr about the implication of the inflation bug, to which the bitcoin developer replied:

“The inflation bug is in practice a network-wide risk. It would allow a 51% miner attack to cause inflation (something such attacks can’t normally do). The inflationary chain would only be accepted by vulnerable nodes and light wallets.”

Expanding further on the dangers posed by the bug, Dashjr went on to say:

“It makes what was thought to be a full node, actually just a light wallet in that one respect. If more than a small minority use light wallets, miners get to make up the rules.”

All nodes have to do is upgrade

Whenever developers discover a bug of this nature, the solution is always to get nodes to upgrade to a newer version of software that hopefully has features that eliminate the problem. Sometimes, this process may lead to the emergence of another problem — as seen in 2018, when solving the DDoS bug caused the inflation bug to manifest.

When asked by Cointelegraph what should be done about the situation, Dashjr’s answer was simple and straight to the point:

“Everyone upgrading to a fixed full node.”

While this process is ongoing, does the bitcoin network face any credible risk stemming from the fact that half of the full nodes are vulnerable to the inflation bug? The answer to the question might lie in who really holds the true power in the network: miners or developers?

In 2018, bitcoin developer, Jimmy Song expressed the view that rogue miners trying to take advantage of the inflation bug would find it nearly impossible to succeed. For one, Song said that not every full node runs the bitcoin core, a large number prefer to deploy custom iterations of the bitcoin client.

The fact that some nodes do not run the core client already diminishes the attack because such nodes will reject the block containing the inflated UTXOs. If a significant number of miners reject the tainted block, then a chain split likely occurs.

Back in 2010, during the “value overflow incident” discovered in block 74,638, developers published a new update to the client in less than five hours, solving the problem. The block in question contained a transaction that created about 184 billion BTC for three addresses, with two addresses receiving 92.2 billion BTC and the miner responsible for solving the block getting 0.01 BTC.

The discrepancy only lasted for the next 53 blocks, and by block height 74,691, all traces of the value of overflow no longer existed on the network. Nodes that initially accepted the chain split with the tainted block soon began to revert to the chain split that didn’t contain the inflated block.

The same applies to the inflation bug: Once the split occurs, developers and others on the network would begin to notice, as Song explained in this excerpt of his blog post, which reads:

“Because of these irregularities, people on the network would soon have tracked this down, probably have alerted some developers and the core developers would have fixed it. If there was a fork, the social consensus at that point about which is the right chain would start getting discussed and the chain creating unexpected inflation would have likely lost out. If there was a stall, there likely would have been a voluntary rollback to punish the attacker.”

For Song, given the economics of the attack, it is unlikely that rogue miners would want to employ such a tactic. However, the bitcoin educator said that hackers working for countries with anti-bitcoin sentiments could exploit the bug to destroy the network.

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Bitcoin Core 0.18.0 Bets on Segwit Adoption and Hints at Offline Tx Signing

BTC

After several months of development, the Bitcoin Core 0.18.0 client was successfully launched with some modifications aimed at improving the efficiency of BTC mining and including some changes that in some way favor Segwit’s adoption.

One of the fundamental tweaks of this new update is that it
expects users to configure their software to be Segwit compatible. If this compatibility is not
supported, “getblocktemplate” command calls will fail, generating a lower
reward for the miners.

“Calls to `getblocktemplate` will fail if the segwit rule is not specified. Calling `getblocktemplate` without segwit specified is almost certainly a misconfiguration since doing so results in lower rewards for the miner. Failed calls will produce an error message describing how to enable the segwit rule.”

In this way, not only is the implementation of Segwit promoted, but they expect miners to achieve greater freedom and independence from their mining pools. The team also encourage miners to adopt this standard as a measure of increasing their profits.

Bitcoin Core: Focusing on Scalability and Convenience?

Another of the most important changes introduced with this update is the addition of an RPC known as joinpsbts. This allows to link several Partially Signed Bitcoin Transactions into a single common transaction. PSBTs also would be able to support offline txs.

This
client’s development team is determined to push for the adoption of Segwit.
They explain that according to their expectations, in one year the Segwit
standard should be globally adopted.

“Starting with Bitcoin Core 0.20 (expected about a year after 0.18), Bitcoin Core will default to native segwit addresses (bech32) that provide additional fee savings and other benefits. Currently, many wallets and services already support sending to bech32 addresses, and if the Bitcoin Core project sees enough additional adoption, it will instead default to bech32 receiving addresses in Bitcoin Core 0.19 (approximately November 2019).”

Not Everyone is Pro-Segwit

Segwit -or segregated witness- is an implementation that separates the tx signature from the transaction itself. In this way, miners can process more transactions in the same block, aiding the blockchain’s scalability.

How segwit works
With Segwit, signatures are outside the blockchain

This solution has been strongly criticized by BTC forks such as BCH and BSV, which state that the use of Segwit and other technological strategies reduce the transparency and credibility of the blockchain. Many skeptics believe Segwit makes on-chain scaling harder, and are convinced that increasing the block size is the best possible solution

The post Bitcoin Core 0.18.0 Bets on Segwit Adoption and Hints at Offline Tx Signing appeared first on Ethereum World News.

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Ethereum Has More Than Twice as Many Core Devs per Month as Bitcoin: Report

Ethereum has the most developers working on its base protocol of all cryptocurrencies, not counting community project developers.

Ethereum (ETH) has the most developers working on its base protocol of all cryptocurrencies, not counting community project developers, according to a report by crypto asset management firm Electric Capital. The report was published in a Medium post on March 7.

Per the post, the company fingerprinted over 20,000 code repositories and 16 million commits to obtain data, which reveals that on average 216 developers contribute code to ETH repositories every month. The company also specifies that this data “is undercounting the number of Ethereum developers since we do not include ecosystem projects like Truffle.”

Bitcoin (BTC), the largest of all cryptocurrencies by market capitalization, has a healthy developer base as well, averaging over 50 developers per month. The report specifies that this data does not include ecosystem projects.

An even more restrictive data set, which only considers contributions to core protocol, reveals that:

“Ethereum is by far the most active at 99 monthly developers on average.”

Bitcoin, on the other hand, has an average of 47 core protocol developers every month, making it the second most active.

The data also reveals that big platforms such as Eos (EOS), Tron (TRX) and Cardano (ADA) all have over 25 monthly core protocol developers on average.

Another point made in the report is that while the market lost about 80 percent since its peak, data shows that the monthly active developer base has fallen by only 4 percent. Moreover, according to the report, the number of developers working on public coin repositories has doubled over the last two years.

According to the company’s global data, over 4,000 developers per month contribute code to over 2,800 public coins. As the study notes, this data does not consider private, not yet launched or non-coin projects, such as the Lightning Network.

The report also points out that “many projects who [sic] are being abandoned by developers are forks of high network value coins.” For instance, Dogecoin (DOGE) hasn’t had developers for months while the Litecoin (LTC) developer base has fallen from 40 developers per month to just three over the last year.

The report also notes that both Bitcoin Diamond (BCD) and Bitcoin Gold (BTG) have had code contributions from under five developers since October 2018.

As Cointelegraph recently reported, Ethereum co-founder Vitalik Buterin has stated he was trying to solve Bitcoin’s limited functionality with the creation of Ethereum.

On the other hand, Twitter and Square CEO Jack Dorsey alluded to spending $10,000 per week on Bitcoin during a recent podcast.

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Rebasing of Verge’s (XVG) Code to that of Bitcoin Almost Complete

Ever since the Verge (XVG) network was hacked back in May, and millions of dollars of the digital asset fraudulently minted, there has been an effort by the project’s core developers to change the codebase of the platform. In late June, the team at the Verge project had announced that they were upgrading Verge’s codebase to Bitcoin Core v.0.13. This was due to the fact that this codebase offered updated security protocols and a solid foundation for the project to continue on.

It is with this background, that the team at Verge have announced that they have finished rebasing Verge to Bitcoin Core version 0.13. The next move is now be to move it to Bitcoin version 0.17. This in turn will mean that the Verge network will be on the latest Bitcoin core base code complete with all the new features accompanying the code.

The team at Verge goes on further to explain this by saying:

Anyone can fork Bitcoin Core, change a few lines of code, and have a new coin. Since Verge has been around for a while, and we have our differences, the challenge has been to merge those differences onto the latest Bitcoin Core. Features like Tor, multi-algorithm, stealth addressing, are the things that make Verge different from Bitcoin Core.

Market Performance after the Sudden Market Decline

XVG has not been spared by the current sudden decline in the crypto markets. In a period of less than 2 hours, Bitcoin (BTC) dropped from comfortable levels of $7,300 to those of $6,990. As a result,the entire market was affected. XVG is down 14.8% in the last 24 hours and is currently trading at $0.0159.

The general feel in the crypto community is one of concern with September 30th being the deadline for the SEC to make a decision on the CBOE sponsored Bitcoin ETF. With only 25 days till then, it will be a tense three weeks in the crypto markets as many expect another postponement or a complete rejection of the ETF by the SEC.

Disclaimer: This article is not meant to give financial advice. Any opinion herein should be taken as is. Please carry out your own research before investing in any of the numerous cryptocurrencies available.

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Bitcoin's Next Big Software Upgrade to Feature New Language for Crypto Keys

Bitcoin may be hard to use even with consumer-friendly tools, while running its core infrastructure is even harder. However, this isn’t stopping efforts to change that.

The global, volunteer developer group behind the most popular implementation of the software, Bitcoin Core, is soon to debut its 17th major software release, one which puts to code a number of highly-anticipated changes. Of particular emphasis is improving the software’s default wallet, where user’s bitcoin private keys are stored.

Perhaps the most interesting update is the debut of a new “language,” initially proposed by prominent bitcoin contributor Pieter Wuille, known for designing some of the most radical changes to bitcoin in recent years (including Segregated Witness, which helped chip away at bitcoin’s scalability problem last year).

The idea behind the new language is to add important extra information to keys. Or, as Bitcoin Core contributor Andrew Chow put it, it provides a “sane” alternative to the problematic “account” system that was recently ripped out of the software. Simply put, it allows users to name their different accounts. Like labeling one “donations” and another “savings.”

One other significant use case of the language is to make it easier to move keys from one wallet to another. As it stands, if a user tries to move a key from one wallet to another, they might lose some of the information about how the coins can be unlocked and sent to someone else.

That’s not a big problem for many transactions. After all, most transactions have pretty simple instructions: the owner must sign the transaction with a secret key, proving the coins are really theirs. But that’s not true for every transaction. For example, multi-signature transactions require more than one person to approve any spending.

Lightning transactions, a faster and more scalable type of payment that’s still in its infancy, are perhaps the most exciting example of this.

With this type of transaction becoming more common (lightning is thought to be the best way for the platform to scale to millions of users), the new language aims to ensure crucial information isn’t lost more regularly.

With this in mind, Wuille’s new language aims to tags each key in bitcoin (both public and private) with a “label” that describes what can unlock it, “changing the way we think about wallets,” Chaincode engineer John Newbery said in a talk describing the upcoming release.

To be clear, though, this release is just a small step, the first code change to put this into practice, Newbery said. But developers anticipate the language will weave its way through the codebase in future software releases.

Mobile bitcoin core?

Other changes in the latest release are iterative, first steps that developers hope will lead to something more.

Partially Signed Bitcoin Transactions (PSBT) are another highly-anticipated change that fits the bill, coded up by Chow. (PSBT is a new format for transactions that are not fully signed yet that can be passed around until finally broadcast.)

This all sounds rather technical, but the thinking here is actually rather forward-looking, and could have an impact on a wide range of users.

Already, there are all sorts of hardware wallets on the market, small mechanical devices that are considered one of the safest ways of storing bitcoin, since it moves the keys that unlock them offline so they can’t be stolen by way of an internet connection.

But each hardware wallet – including Trezor, Ledger, and so forth – is kind of off in its own little world when it comes to how it engages with the software. In short, they aren’t compatible with all software wallets at once.

One of the easiest ways to use a hardware wallet is to leave it offline, but then connect it to a software wallet on a mobile device that makes it easy to actually make transactions.

It’s cool that this is possible – to get the security of hardware wallet but the convenience of a software wallet at the same time. The problem is that usually each hardware wallet only includes support for one or two software wallets. Trezor only supports the softwaare wallet Electrum, for instance. They can’t connect the Trezor to Bitcoin Core or whatever other software they want to connect to.

And users have long been complaining about how annoying this is. BIP 174 offers away around that. It’s a standard that every wallet can use.

Though, of course, it depends on whether wallets actually indeed choose to use it. The prospects are looking optimistic so far. Even though the code isn’t officially out yet, it’s attracted much enthusiasm, with one hardware wallet, coldcardwallet implementing the transaction signing method already.

As wallets pick up this standard, it will make Bitcoin Core in particular a bit easier to use because hardware wallets will easily be able to connect to the software.

“PSBT will enable Bitcoin Core to more easily support hardware wallets and have better offline, airgapped wallet setups. I’m actually working on hardware wallet support for Bitcoin Core by using PSBT,” Chow told CoinDesk, going as far as to argue that Bitcoin Core is a much safer way to use bitcoin than other software wallets.

“[SPV wallets] carry privacy and potentially security risks as they are trusting a third party to do the blockchain verification. Once Bitcoin Core supports hardware wallets, users can use Bitcoin Core instead, and because it is a full node, the user does not need to trust a third party that the everything has been verified correctly,” he said.

But the code change opens up a lot of options, even potentially boosting bitcoin smart contracts and privacy features. “PSBT also makes things like multisigs and CoinJoins easier to do,” Chow continued.

To this end, one user tweeted: “Excited to see all the interesting ways BIP174 will be used.”

And more

These are a couple of the changes developers are most excited about, but there are dozens of other upgrades rolled into the release. One is a “dynamic wallet creation” feature.

“A few releases ago, we introduced the ability to use multiple wallets in Bitcoin Core. However that required starting Bitcoin Core configured for multiple wallets. Now, we can load, unload, and create wallets when the software is already running,” Chow said.

Meanwhile, you might have heard of Coin Selection, an improved way of plucking up the coins go into a transaction. It’s so much better than the old algorithm that it greatly improves bitcoin’s scalability as a whole, even cutting fees.

Though the main code for the new feature was already added about six months ago, the algorithm is getting a small privacy boost in the 17th release.

That still doesn’t cover everything. The rest of the changes are to be described in more detail in the final release notes, which will be released at the same time as the final, tested code.

These might seem like small changes. Especially since few people use bitcoin and even fewer use Bitcoin Core. And there’s no question why. Bitcoin’s software takes up nearly 200 GB, about the size of a laptop. Downloading it and using it is a far cry from downloading and setting up the Venmo app on a smartphone in matter of minutes.

But the goal with these major code changes is to eventually get the code to the point where it’s not such a pain to set up, so maybe one day anyone who wants to utilize the full advantages of bitcoin can do so.

Locks image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Bitcoin's Biggest Startups Are Backing a New Effort to Keep Fees Low

2017 was a wake-up call for bitcoin supporters to say the least.

With so many people using the software amid a price boom, the fees for sending transactions swelled higher than ever before, even rising to as much as an average of $26 for a single transaction. It was a road with too many cars, leading to a veritable traffic jam.

Sure, the situation wasn’t long to last, as fees fell back to manageable levels, but the worry is this spike could always happen again – if, or dare we say it, when, bitcoin “goes mainstream.”

But fees don’t have to be as high next time there’s a spike in the cryptocurrency’s use, at least that’s the argument being put forward by those launching a new effort called Bitcoin Optech.

Led by bitcoin developer and Bitcoin Core contributor John Newbery, the effort is an attempt to help the companies that rely on the bitcoin software figure out what scaling technologies they’re missing, including those that will push fees lower.

Newbery told CoinDesk:

“Businesses were caught unawares. At the same time, there was lots of scaling tech that could have helped and that was well-understood, but they weren’t adopted yet.”

That gave him the idea that developers with knowledge of bitcoin’s underlying tech could be more aggressive in helping companies through such upgrades. For instance, the bug fix Segregated Witness (SegWit) activated last August, but bitcoin businesses were slow to adopt the change, even though it can cut fees by half.

Since it can help to improve the experience for all bitcoin users, many notable entities are interested in the effort, with investors Xapo CEO Wences Casares, entrepreneur John Pfeffer and bitcoin development group Chaincode Labs giving them the money to get the project off the ground.

The non-profit effort also boasts six member companies so far, including Coinbase, Square and BitGo, all who’ve expressed what they believe is a need for an effort like Bitcoin OpTech.

“By collaborating with leading engineers in this space, we’ll be able to achieve more than we could have by tackling these problems alone,” Coinbase lead bitcoin engineer Brock Miller said in a statement. Square strategic development lead Mike Brock said the company is “proud” to be working with OpTech.

Coming together

So far, Bitcoin OpTech has made contact with 15 to 20 bitcoin companies, saying they’re surprised by how excited they are to adopt various scaling technologies. “They’re saying something like Optech has been missing. and could be beneficial. It’s even bringing people together,” Newbery said.

In this way, it’s also helping heal relations between the various groups that have sprung up to support the decentralized bitcoin software. In the worst parts of bitcoin’s history, a rift has emerged between developers of the Bitcoin Core protocol and the industry’s companies, with the two different groups advocating for very different technical upgrades.

“The more engagement there is between industry and open source, the better,” OpTech’s announcement blog post explains.

To that end, they’ve identified a few key technologies that they can help business with right now.

Coin selection is a complicated problem dealing with the most efficient way of choosing which “coins” to send when a bitcoin users sends a transaction. Adding to the complexity, Bitcoin OpTech project manager Steve Lee stressed that the best selection technique often varies from wallet to wallet.

While “fee estimation” is another technical problem that’s hard to get right. Fee estimation tools in bitcoin wallets today often tell users they should pay fees much higher than they actually need to be paying.

Speaking about these very strategies, the Bitcoin Optech team, joined by Bitcoin Core contributor Andrew Chow, held their first workshop in San Francisco. Sponsored by Square, the event saw the developers go over some of these scaling technologies and what’s in it for the companies that adopt them.

Lee called this workshop a “good proof point” for what they’re doing in that more companies showed up than they could have hoped for. Six of the eight San Francisco companies they broached the topic to showed up at the workshop, demonstrating, in his mind, how hungry engineers at these companies are to learn about how to solve these types of problems.

“It’s hard to get their attention,” he said.

Catalyzing change

The Bitcoin OpTech team stressed, though, that they don’t want to be any sort of “central authority” telling bitcoin companies what they should and shouldn’t do.

Lee said they’re looking to be more of a “catalyst” for change.

By hosting more workshops similar to the above around the world, hopefully to give engineers the tools they need to make these scaling technologies on their own.

Meanwhile, they’ve been sending out weekly newsletters describing the most recent additions to Bitcoin Core, the most popular bitcoin client. And they have other ideas too, like creating a Slack group where member companies can keep in touch.

Another example of this is they’re looking to start what Lee calls an open-source “cookbook,” detailing various scaling changes bitcoin companies can adopt.

This documentation would be available to anyone, not just dues-paying members.

All that said, there’s a focus to Bitcoin Optech’s mission: technologies that businesses can add today

Maybe someday they’ll help companies other much-hyped technologies, such as lightning or Schnorr, since many bitcoin companies need to update their software in order to support these improvements.

But Newbery said that might be a while. They’re waiting until “they’re more advanced in their proposals.” Until then, they’ll be focused on well-understood strategies that bitcoin companies have yet to adopt.

Bitcoins and calculator image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Schnorr Is Looking Poised to Become Bitcoin's Biggest Change Since SegWit

Schnorr is coming…

In fact, the bitcoin upgrade arguably took its most significant step yet toward implementation last week when influential developer Pieter Wuille unveiled a draft outlining its technical makeup. With the release, the idea, one that’s been in the works by bitcoin developers for years, is one step closer to improving the scaling and privacy of the world’s most valuable cryptocurrency.

Effectively, this sets up Schnorr as the next big change to bitcoin, meaning it will be the largest code change since Segregated Witness (SegWit), a pivotal bug fix that prompted a drawn-out battle in the bitcoin community last year before ultimately being adopted.

At a technical level, adding support for Schnorr, a digital signature scheme, would give bitcoin users a new way to generate the cryptographic keys they need to used to store and send bitcoin. By doing so, it also paves the way for a number of exciting benefits, including tackling privacy and scalability, arguably two of bitcoin’s most worrisome problems.

“It is a building block for a variety of improvements,” Wuille told CoinDesk, adding there are even some further-out improvements that haven’t gotten a lot of attention quite yet. And while Wuille hopes the change will ultimately be adopted, he added it’s “ultimately up to the users” if they want to adopt it – as was the case with SegWit.

Co-authored by several top bitcoin developers, including the likes of Bitcoin Core contributor Johnson Lau and Gregory Maxwell, the technical, math-ridden proposal outlines the exact signature scheme that could be coded in bitcoin.

And while it’s far from that final goal, it’s a necessary piece.

Blockstream engineer and co-author Jonas Nick told CoinDesk:

“Standardizing Schnorr for bitcoin is a big step towards using it in bitcoin.”

A way forward

For one, the BIP draft helps to avoid future confusion by proposing a standard that ensures that all developers and merchants eventually implement the Schnorr signature code in the same way.

Though the full description can be read in the highly-technical BIP, the main idea is it describes the math necessary to produce Schnorr signatures, offering an alternative to Elliptic Curve Digital Signature Algorithm (ECDSA), the sole algorithm used to produce keys and verify transactions in bitcoin today.

Schnorr will have one thing in common with the signature scheme it seeks to crowd out, though. If plan is accepted, it will use the same mathematical “curve” that ECDSA uses to produce the keys, called “secp256k1.”

It’s a lot of tricky math, so it’s no surprise the release sparked technical discussion on the bitcoin developer mailing list.

But nothing major has come up so far and developers are optimistic, especially since one of Schnorr’s key benefits is that, unlike ECDSA, Schnorr’s security can actually be proved mathematically.

While Schnorr offers a number of improvements on its own, developers are also excited that it will also pave the way for a range of changes that can be built on top of it, such new privacy techniques.

Right now, it’s obvious when users send so-called “multi-sig transactions,” which are a more advanced type of transaction where more than one person is required to sign off on a transaction, because of bitcoin’s public ledger. But Schnorr pave the way for a technique that will make these transactions look the same as every other transaction.

Nick noted Schnorr will also lead these advanced transactions will be cheaper as well, an important improvement since transactions can grow very expensive in times of congestion.

And it seems like new tech built on top of Schnorr are being proposed on a regular basis.

“Due to the wealth of new discoveries lately I believe these technologies should be developed in a step-by-step basis, and my focus for a first step is just Schnorr and Taproot,” Wuille said, referring to the bitcoin improvement “Taproot” proposed earlier this year by another influential bitcoin developer Greg Maxwell to further improve bitcoin’s privacy.

Less detractors?

That said, there’s still a ways to go – Schnorr’s a massive project with many moving pieces.

While this BIP proposes a standard for developers to chime in on, Nick noted there’s also a code implementation that’s been in the works for ages, putting much of what’s in the BIP draft into practice.

Plus, once developers fight it out until they decide there are no longer any outstanding problems, developers need to come up with a way to actually add it to bitcoin, among other things.

“The specifics for how to deploy it in bitcoin are still being actively discussed,” Nick said.

Having been through a few so-called “consensus” changes in his years as a bitcoin developer, Wuille gave a particularly long list of things to do.

“Like any consensus change, it will be a long process involving fully fleshing out a draft for integration, publishing it, gathering comments from the technical community and ecosystem, writing implementations of both consensus rules and integration in wallet software, proposing a deployment plan, and if all goes well, get it activated,” he said.

In the email where he introduced the BIP, he added that if the BIP is “accepted” by the broader bitcoin community “we’ll work on more production-ready reference implementations and tests.”

Not to mention, there’s another potential stumbling block on everyone’s minds.

Schnorr is a particularly big upgrade. Although changes are being made to bitcoin every day, with code contributions coming from a diverse group of contributors stationed around the world, Schnorr is a rarer type of change, since it affects the most important rules in bitcoin.

SegWit was the last code change “consensus” change made to bitcoin, sparking a debate so big, those who disagreed with the change split off and created their own cryptocurrency with SegWit removed.

The most enthusiastic SegWit supporters even made hats to express their support for the code change. Blockchain consultant Francis Pouliot joked that similar advocacy hats should be made in advance of Schnorr, in case a similar vicious debate breaks out.

He’s not the only developer mulling this possibility.

“It looks for now there are less detractors than there was for SegWit,” developer Riccardo Casatta said, though adding he’s not taking any chances:

“You cannot say how things​ will go and as always, it is better to be patient.”

Welding laser image via Shutterstock

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A Long-Secret Bitcoin Key Is About to Finally Be Revealed

A long-held bitcoin secret is about to be revealed.

No, it’s not the identity of Satoshi Nakamoto, it’s a private key the cryptocurrency’s creator entrusted to several bitcoin developers that activates the protocol’s so-called “alert system,” once used to flash a text warning to those running the software in case something happened that could impact the security of their funds.

If you didn’t know bitcoin had a warning system like this, that’s because it was retired in 2016 due to security concerns and frequent confusion about its use.

“The alert system was a frequent source of misunderstanding about the security model and ‘effective governance,'” well-known Bitcoin Core contributor Greg Maxwell wrote in a public email from September 2016.

In short, some in the bitcoin community thought it could be used to change that network rules that unite users, which isn’t really the case. For example, a BitcoinJ developer once wanted to use the key to control fees, while a Bloq staffer pressed for Bitcoin Core developers to use the key to change the network’s mining difficulty.

Plus, developers were worried that if the wrong person got ahold of the key, they could broadcast false messages or potentially cause panic.

As such, to some, the reveal – being undertaken by Bitcoin Core contributor Bryan Bishop – is a long time coming.

“Folks, it’s going to be an interesting show,” Bishop tweeted, followed by a string of tweets cryptographically proving he’s in possession of the secret key, without fully revealing it quite yet.

The reveal is the final step to destroying the system. After Bitcoin Core developers released new code in 2016 without the alert system, in January 2017, a “final alert message” was broadcast, which – by law of the code – made that message unable to be overridden by any other messages in the future.

Still, the private key needs to be displayed publicly so there’s no possibility of reputation attacks against those developers that hold it.

Bishop told CoinDesk he plans to release it soon, though he’s not sure about the exact date, adding:

“It’s time. I’m thinking about releasing the private key early July at Building on Bitcoin, though it’s not finalized yet.”

Danger for altcoins

Still, it isn’t as easy as it sounds.

Revealing the key is potentially dangerous for any cryptocurrencies that used an older version of bitcoin’s code to create their cryptocurrency and have not disabled the alert key mechanism in their own code.

“If the copycats have not disabled the alert system, nor changed the alert key [public key], and if they have not sent what’s known as a final alert message, then once the [bitcoin] keys are released, anyone will be able to send alerts on those [other] networks,” Bishop told CoinDesk.

It’s happened before actually. Litecoin creator Charlie Lee recounted on Twitter just last week how the lesser-known Feathercoin protocol (which copied litecoin’s code) received litecoin’s alert about upgrading to the latest litecoin client.

And while that isn’t a particularly nefarious example, Bishop said, controlling what alert messages are sent on various networks “sounds dangerous.”

As such, in Maxwell’s 2016 email, he said he had spent and would continue spending some time searching through other cryptocurrency codebases. If they were found to contain the alert key code from bitcoin, he vowed to notify those projects to remove that code.

Maxwell concluded:

“At some point after that, I would then plan to disclose this private key in public, eliminating any further potential of reputation attacks and diminishing the risk of misunderstanding the key as some special trusted source of authority.”

Reputation on the line

But, two years later, neither Maxwell – nor any other Bitcoin Core developer – has revealed the key.

“It’s something we have wanted to release for a few years. Nobody took any action, though,” Bishop said.

But by now, the projects susceptible to this vulnerability have had time to remove the code and upgrade. Although, some of those projects might not have developers anymore, even though users and still trading and using the cryptocurrencies, which could mean there’s been no update.

That said, Bishop’s giving these projects one last chance by sending messages on Twitter and through other channels.

Adding pressure that could prioritize the reveal, though, is that Bishop and others are worried about attacks on their reputation. For instance, if the private key was compromised and used to sign a message with bad intentions, it could be blamed on one of the Bitcoin Core developers who’s known  to have the key.

“Nobody knows the full list of people that have access to the private key. A message could be signed by the private key, and the secrecy is a liability because some of the people who have the key are known in public to have the key,” Bishop said, pointing to the fact that those with the key that are unknown could blame people who are known to hold the key for nefarious messages.

Bishop recently used the alert key (without revealing it) to sign a simple text message that he then tweeted out, displaying how it could be used to trick users or cause confusion within the community.

Plus, he told CoinDesk, there are other long-standing vulnerabilities within the alert key setup that he plans to disclose when he reveals the key to the public.

As such, Bishop concluded:

“It would be better if the key was released.”

Antique keys image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Bitcoin Core Version 0.16.1 Officially Released

Bitcoin Core version 0.16.1, a new major version including new features and performance improvements, has been officially released, according to an announcement made June 15.

The new release reportedly includes “new features, various bugfixes and performance improvements, as well as updated translations.” Notably, this Bitcoin Core version removed miner block size recalling the deprecation of the “-blockmaxsize” option for miners to limit their blocks’ sizes in version 0.15.1. It states that miners now should apply “-blockmaxweight” option if they want to limit the weight of their blocks.

Additionally, the upgrade affected wallets which were created in 0.16 and later. They are “not compatible with versions prior to 0.16 and will not work if you try to use newly created wallets in older versions,” the release says.

The previous Bitcoin Core client version was released at the end of February, and provided “full support” for Segregated Witness (SegWit) scaling technology, which is designed to reduce processing and wait times, as well as transactions fees. Bitcoin Core developer Jimmy Song, then commented on the most notable feature of Bitcoin Core version 0.16.0, saying that “native SegWit support (bech32) is going to get much more adoption as a result of this update. This will reduce block bloat and encourage more wallets in the ecosystem to adopt bech32.”

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There's Another Bitcoin Core in Town – And It's Trolling Bitcoin Cash

Has a cryptocurrency by trolls, for trolls, finally been created?

If not, the cryptocurrency bitcoin core (BTCC) certainly comes close. And no, we’re not using the derogatory other name for the cryptocurrency most often referred to as bitcoin – the one that legendary crypto investor and bitcoin cash booster Roger Ver likes to berate. Rather, BTCC is a new cryptocurrency, which ironically enough came about from a fork of bitcoin cash. Well, a hard fork of a bitcoin cash hard fork that is.

It’s all a bit confusing, but after bitcoin cash’s November 2017 hard fork, which was executed to fix the cryptocurrency’s mining algorithm, a small group resisted, splitting the blockchain and creating a new project called “bitcoin clashic.”

But because bitcoin clashic didn’t address the issue, it faded away after a few months.

Yet, another small group of ever-persistent developers forked bitcoin clashic – fixing its issues but leaving the updates from bitcoin cash’s most recent hard fork – a couple weeks ago to create bitcoin core (BTCC).

Or in the words of the BTCC Twitter account:

“We are the cool cousin that’s a good wingman. Unlike the other one hating and trying to steal ur [sic] girl.”

That comment, while irreverent, speaks not only to the fact that BTCC is supposed to complement bitcoin (instead of compete with it as bitcoin cash is generally positioned as), but also that the BTCC devs are, in part, trolling Mr. Ver.

See, Ver has made it his mission to paint bitcoin cash as the “real” bitcoin – a protocol that better represents what Satoshi Nakamoto, the pseudonymous creator of bitcoin, would have wanted. And while it’s not the original chain, Ver very often renames bitcoin, “bitcoin core” (after the name of the team behind bitcoin’s main software implementation), and has even went so far as to label bitcoin cash, “bitcoin” and bitcoin, “bitcoin core” on his website bitcoin.com.

While no one has a trademark over the bitcoin name, many are outraged by Ver’s antics, contending that his categorizations will confuse new investors. And the developers behind BTCC seem to be aligned with those opposed to Ver.

The original BTCC website (which has since been altered) trolled Ver by arguing that BTCC is, in fact, the currency Ver was really talking about when he speaks about the “real” bitcoin. And BTCC’s Telegram channel is filled with messages like “I can’t take Roger Ver no more.” Even the cryptocurrency’s main block explorer is called “truevisionofsatoshi.com,” referencing a tagline that many bitcoin cash supporters have taken to.

Plus, the team behind BTCC has also taken to poking fun at other notable bitcoin cash supporters, including John McAfee, the brash entrepreneur that made his money off anti-virus software and now shills crypto tokens on Twitter for a price.

And since trolling is a much-appreciated method for showing disdain in cryptocurrency circles, BTCC is getting plenty of attention.

Pseudonymous bitcoin subreddit moderator BashCo said that the cryptocurrency has a serious element, too, since it takes attention away from what many claim are fraudulent acts of rebranding by Ver. In this way, it might be helpful to think of BTCC as a monetized piece of performance art, one only made possible by cryptocurrencies.

Bashco told CoinDesk:

“BTCC is interesting to me because it disrupts malicious attempts to rebrand bitcoin in order to promote an imposter coin.”

Branding debate

Backing up, bitcoin cash’s launch sparked an ongoing debate over bitcoin’s “branding.”

This war started when those opposed to bitcoin cash started calling it “bcash.” While those using bcash explained that the nickname was in an effort to eliminate confusion between bitcoin cash and bitcoin, the supporters of bitcoin cash didn’t like the new moniker.

According to bitcoin cash supporters like Eli Afram, the Bitcoin Cash Australia founder, giving bitcoin cash that nickname was more than just a helpful signal.

“When bitcoin cash first forked, many in the Bitcoin Core camp were so threatened they couldn’t even call it by its name or even its ticker for short and referred to it as ‘bcash,'” Afram argued to CoinDesk.

Since then, this naming war has gone through many iterations.

As mentioned, bitcoin cash supporters see the cryptocurrency as the “real” bitcoin since it upped the block size, allowing for more transactions to happen on the network with lower fees – what they see as Satoshi’s real interest in creating a cryptocurrency in the first place. Yet, detractors say it’s not that easy – since bitcoin has amassed a huge network worth billions of dollars, technical work has to be slow and steady so as not to disrupt the technology from its use as a store of value.

Still, bitcoin cash proponents have begun calling bitcoin “bitcoin core.”

As such, those in favor of bitcoin cash aren’t seeing the new bitcoin core (BTCC) cryptocurrency as a humorous meme.

“Bitcoin core (BTCC) was created to make people think bitcoin core (BTC) is bitcoin,” said Ryan X. Charles, the co-founder and CEO of Yours, which notably moved from bitcoin to bitcoin cash after the hard fork.

Ver told CoinDesk that BTCC isn’t “even worth commenting on.”

And all this prompted Afram to say:

“There’s going to be an eternal naming war.”

A chain kept alive

But even with most people thinking BTCC is just a silly effort to fight back against bitcoin cash semantics, the developers behind the cryptocurrency, at least in their own words, trying to distance themselves from the naming war.

“The original [bitcoin cash] was kept alive as an experimental testbed, and in case there was ever a use for it to make a positive contribution to bitcoin. It was, and is, a labor of love,” an anonymous spokesperson for BTCC told CoinDesk.

Although, according to the spokesperson, the BTCC team doesn’t exactly mind being seen as a bit of a joke, but he or she went on to claim the developers are taking the cryptocurrency more seriously.

“Some members of the community decided to have some fun and leverage the publicity,” the spokesperson said. “However, the Bitcoin Core developers are committed to delivering a unique value proposition, adhering to core values and offering increased speed and enhanced privacy.”

The spokesperson even said the BTCC developers have a hard fork planned soon that will upgrade the protocol; the developers want to add confidential transactions, a privacy feature that hides user balances since they believe bitcoin doesn’t go far enough to protect people’s privacy.

Still, these comments are hard to take seriously since the cryptocurrency’s official Twitter account and Telegram channel is full of trolling comments.

Even well-known cryptocurrency thought leaders such as Casa engineer Jameson Lopp are tweeting about it in a joking manner, while bitcoin investor Alistair Milne quipped in response:

“Trolling level 10001.”

Trolls image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.