date:20150619

It all comes down to managing risk. If you’ve got a decent risk model with 
capped losses and safe recovery mechanisms…and it’s still profitable…it’s fine. 
But most payment processors and merchants right now probably don’t have 
particularly good risk models and are making many dangerous assumptions…and 
probably would not be able to gracefully handle very many risk scenarios.

- Eric Lombrozo


 On Jun 19, 2015, at 6:23 PM, Aaron Voisine vois...@gmail.com wrote:
 
  What retail needs is escrowed microchannel hubs (what lightning provides, 
  for example), which enable untrusted instant payments. Not reliance on 
  single-signer zeroconf transactions that can never be made safe.
 
 They don't need to be made cryptographically safe, they just have to be safer 
 than, for instance, credit card payments that can be charged back. As long as 
 it's reasonably good in practice, that's fine.
 
 
 Aaron Voisine
 co-founder and CEO
 breadwallet.com http://breadwallet.com/
 On Fri, Jun 19, 2015 at 6:09 PM, Mark Friedenbach m...@friedenbach.org 
 mailto:m...@friedenbach.org wrote:
 What retail needs is escrowed microchannel hubs (what lightning provides, for 
 example), which enable untrusted instant payments. Not reliance on 
 single-signer zeroconf transactions that can never be made safe.
 
 On Fri, Jun 19, 2015 at 5:47 PM, Andreas Petersson andr...@petersson.at 
 mailto:andr...@petersson.at wrote:
 I have some experience here. If you are seriously suggesting these
 measures, you might as well kill retail transactions altogether.
 
 In practice, if a retail place starts to accept bitcoin they have a
 similar situation as with cash, only that the fraud potential is much
 lower. (e.g. 100-dollar bill for a sandwich might turn out fake later)
 and the fraud frequency is also much lower.
 
 0-conf concerns were never a problem in practice. except for 2-way atms
 i have never heard of a problem that was caused by double spends.
 while adding these measures is generally positive, requiring them means
 excluding 99.9% of the potential users. so you might as well not do it.
 
 RBF as implemented by F2Pool just flat out lowers Bitcoins utility
 value. So it's a bad thing.
 
 for any online or automated system, waiting for a handful of
 confirmations was always recommended practice.
 
 Am 19.06.2015 um 22:39 schrieb Matt Whitlock:
  Retail POS merchants probably should not be accepting vanilla Bitcoin
  payments, as Bitcoin alone does not (and cannot) guarantee the
  irreversibility of a transaction until it has been buried several
  blocks deep in the chain. Retail merchants should be requiring a
  co-signature from a mutually trusted co-signer that vows never to sign
  a double-spend.
 
 
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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Andreas Petersson

I have some experience here. If you are seriously suggesting these
measures, you might as well kill retail transactions altogether.

In practice, if a retail place starts to accept bitcoin they have a
similar situation as with cash, only that the fraud potential is much
lower. (e.g. 100-dollar bill for a sandwich might turn out fake later)
and the fraud frequency is also much lower.

0-conf concerns were never a problem in practice. except for 2-way atms
i have never heard of a problem that was caused by double spends.
while adding these measures is generally positive, requiring them means
excluding 99.9% of the potential users. so you might as well not do it.

RBF as implemented by F2Pool just flat out lowers Bitcoins utility
value. So it's a bad thing.

for any online or automated system, waiting for a handful of
confirmations was always recommended practice.

Am 19.06.2015 um 22:39 schrieb Matt Whitlock:
 Retail POS merchants probably should not be accepting vanilla Bitcoin
 payments, as Bitcoin alone does not (and cannot) guarantee the
 irreversibility of a transaction until it has been buried several
 blocks deep in the chain. Retail merchants should be requiring a
 co-signature from a mutually trusted co-signer that vows never to sign
 a double-spend.  



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Re: [Bitcoin-development] Alternate HD path structure: BIP, blog, or wat?

2015-06-19 Thread Andreas Petersson

m/##'/0'/99'/0'

where 99 is the identifier for, say, counterparty


What is stopping you from using m/44'/9'/a'/c/i as descibed here:
http://doc.satoshilabs.com/slips/slip-0044.html

to avoid having an internal mapping from 9'- 0' to find out what
blockchain to query, this sounds like it should be trivial for any wallet.


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Re: [Bitcoin-development] Alternate HD path structure: BIP, blog, or wat?

2015-06-19 Thread Matt @ Envrin Group


Say you generate a child key using the path m/6'/4'/7'/99'/0/196, which 
is what your proposed path structure would be, and it results in the 
address 1DpY7PtPVURvjrGsdAjbZAZ7cL9GD8tc5w.

When the wallet notices a transaction in the blockchain that has 
1DpY7PtPVURvjrGsdAjbZAZ7cL9GD8tc5w as an output, it's going to have to 
lookup the address within its database to get the values 6/4/7/99/0/196, 
as there's no way to retrieve them from just the address.  So 
technically, you might as well just use m/account'/change/index if using 
hardened child keys, or m/change/index if not, as recommended, because 
the wallet will still function the exact same way.

Matt



On 06/20/2015 06:31 AM, Matt Smith wrote:
 I'm not sure I understand your question about the need to store paths in
 the wallet database -- there's no way to infer the path of an address
 inside an HD wallet from the address alone (short of an exhaustive
 search), and HD wallets need to store either the paths, addresses, or
 both that have been previously derived/used to monitor the blockchain
 usefully, but those facts aren't new or specific to this path format.

 The motivation for this path structure over standard bip44 is that it
 separates the concept of network (or which blockchain I'm using) and
 coin_type (or what kind of thing I'm sending over that blockchain).

 This is useful, for example, if I want to import a wallet into my
 application and I know that an account was in use at

 m/##'/0'/99'/0'

 where 99 is the identifier for, say, counterparty - I only need to check
 the addresses derived below that path for balances against
 counterpartyd. It may be worth pointing out that I expect multisig HD
 wallet imports to require master keys and a list of account paths – not
 a list of addresses, as it's very possible that a new address could be
 derived between the time when the wallet data was exported and when it
 will be imported.

 This use case might be very specific to our model, but the reason I
 figured we should request a BIP # for this is that to start using it, we
 need to pick a number for the purpose field and don't want to do it
 arbitrarily (and risk having to change it later) or overload 44 (which
 would be misleading).

 Did I either  a) answer  or  b) misunderstand  your questions?
 --
 Matt Smith | Gem
 https://gem.co | GH: @thedoctor



 On 6/19/15 2:25 PM, Matt @ Envrin Group wrote:
 Hi Matt,

 I think your best bet is probably just push it out privately via blog
 post / Github, and see if it gains any traction with other developers.

 I'm a little uncertain as to the relevance though.  All those variables
 (purpose, network, asset_type, account, change, index) need to be stored
 internally within the wallet database, as there's no way to retrieve the
 path used from just the address, correct?  In that case, what's the
 meaning of that exact path structure when a) it can't be retrieved from
 just the address, and b) the values will be stored internally within the
 wallet when you lookup the address.

 Matt


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Re: [Bitcoin-development] improving development model (Re: Concerns Regarding Threats by a Developer to Remove Commit Access from Other Developers

2015-06-19 Thread Tom Harding

On 6/19/2015 6:43 AM, Mike Hearn wrote:
 No surprise, the position of Blockstream employees is that hard forks
 must never happen and that everyone's ordinary transactions should go
 via some new network that doesn't yet exist.

If my company were working on spiffy new ideas that required a hard fork
to implement, I'd be rather dismayed to see the blocksize hard fork
happen *before those ideas were ready*.

Because then I'd eventually have to convince people that those ideas
were worth a hard fork all on their own.  It would be much easier to
convince people to roll them in with the already necessary blocksize
hard fork, if that event could be delayed.

As far as I know, Blockstream representatives have never said that
waiting for other changes to be ready is a reason to delay the blocksize
hard fork.  So if this were the real reason, it would suggest they have
been hiding their true motives for making such a fuss about the
blocksize issue.

I've got no evidence at all to support thoughts like this... just the
paranoid mindset that seems to infect a person who gets involved in
bitcoin.  But the question is every bit as valid as Adam's query into
your motives.



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Re: [Bitcoin-development] Concerns Regarding Threats by a Developer to Remove Commit Access from Other Developers

I don’t think the issue is between larger blocks on the one hand and things 
like lightning on the other - these two ideas are quite orthogonal.

Larger blocks aren’t really about addressing basic scalability concerns - for 
that we’ll clearly need architectural and algorithmic improvements…and will 
likely need to move to a model where it isn’t necessary for everyone to 
validate everyone else’s latte purchases. Larger blocks might, at best, keep 
the current system chugging along temporarily - although I’m not sure that’s 
necessarily such a great thing…we need to create a fee market sooner or later, 
and until we do this, block size issues will continue to crop up again and 
again and economic incentives will continue to be misplaced. It would be nice 
to have more time to really develop a good infrastructure for this…but without 
real market pressures, I’m not sure it will happen at all. Necessity is the 
mother of invention, after all. The question is how to introduce a fee market 
smoothly and with the overwhelming consensus of the community - and that's 
where it starts to get tricky.

——

On a separate note, as several others have pointed out in this thread (but I 
wanted to add my voice to this as well), maintenance of source code 
repositories is NOT the real issue here. The bitcoin/bitcoin project on github 
is a reference implementation of the Satoshi protocol…but it is NOT the only 
implementation…and it wasn’t really meant to be. Anyone is free to fork it, 
extend it, improve upon it, or create an entirely new network with its own 
genesis block…a separate cryptoledger.

The real issue regarding XT is NOT the forking of source code nor issues 
surrounding commit access to repositories. The real issue is the *forking of a 
cryptoledger*.

Open source repositories are meant to be forked - in fact, it is often 
encouraged. It is also encouraged that improvements be submitted for review and 
possibly merged back into the parent repository…although this doesn’t always 
happen.

However, we currently have no mechanisms in place to support merging of forked 
cryptoledgers. Software, and most other forms of digital content, generally 
increases in value with more copies made. However, money is scarce…by design. 
The entire value of the assets of a decentralized cryptoledger rests on the 
assumption that nobody can just unilaterally fork it and change the rules. Yes, 
convincing other people to do things a certain way is HARD…yes, it can be 
frustratingly slow…I’ve tried to push for many changes to the Bitcoin 
network…and have only succeeded a very small number of times. And yes, it’s 
often been quite frustrating. But trying to unilaterally impose a change of 
consensus rules for an existing cryptoledger sets a horrendous precedent…this 
isn’t just about things like block size limits, which is a relatively petty 
issue by comparison.

It would be very nice to have a similar workflow with consensus rule evolution 
as we do with most other open source projects. You create a fork, demonstrate 
that your ideas are sound by implementing them and giving others something that 
works so they can review them, and then merge your contributions back in. 
However, the way Bitcoin is currently designed, this is unfortunately 
impossible to do this with consensus rules. Once a fork, always a fork - a.k.a. 
altcoins. Say what you will about how most altcoins are crap - at least most of 
them have the decency of starting with a clean ledger.


- Eric Lombrozo


 On Jun 18, 2015, at 5:57 PM, Chris Pacia ctpa...@gmail.com wrote:
 
 On 06/18/2015 06:33 PM, Mark Friedenbach wrote:
 
   * Get safe forms of replace-by-fee and child-pays-for-parent finished and 
 in 0.12.
   * Develop cross-platform libraries for managing micropayment channels, and 
 get wallet authors to adopt
   * Use fidelity bonds, solvency proofs, and other tricks to minimize the 
 risk of already deployed off-chain solutions as an interim measure until:
   * Deploy soft-fork changes for truly scalable solutions like Lightning 
 Network.
 
 One of my biggest concerns is that these solutions (lightning network in 
 particular) could end up being worse, in terms of decentralization, than 
 would be a bitcoin network using larger blocks. We don't exactly know what 
 the economies of scale are for pay hubs and could very well end up with far 
 fewer hubs than nodes at any conceivable block size.
 
 Of course, it could also turn out to be fantastic, but it seems like an 
 enormous gamble to basically force everyone in the ecosystem to collectively 
 spend millions of dollars upgrading to Lightning and then see whether it's 
 actually an improvement in terms of decentralization.
 
 To me, a much more sane approach would be to allow people to voluntarily opt 
 in to those other solutions after we've had an opportunity to experiment with 
 them and see how they actually function in practice, but that can't happen if 
 the network runs out of capacity first.

Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

On Fri, Jun 19, 2015 at 09:37:49PM +0800, Chun Wang wrote:
 Hello. We recognize the problem. We will switch to FSS RBF soon. Thanks.

No worries, let me know if you have any issues. You have my phone
number.

While my own preference - and a number of other devs - is full-RBF,
either one is a good step forward for Bitcoin.

-- 
'peter'[:-1]@petertodd.org
03188926be14e5fbe2f8f9c63c9fb8e2ba4b14ab04f1c9ab


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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

On Fri, Jun 19, 2015 at 09:33:03AM -0400, Gavin Andresen wrote:
 I just sent the following email to F2Pool:
 
 
 I was disappointed to see Peter Todd claiming that you have (or will?) run
 his replace-by-fee patch.
 
 I strongly encourage you to wait until most wallet software supports
 replace-by-fee before doing that, because until that happens replace-by-fee
 just makes it easier to steal from bitcoin-accepting merchants.

Do you mean just full-RBF, or FSS-RBF as well?


Speaking of, could we get a confirmation that Coinbase is, or is not,
one of the merchant service providers trying to get hashing power
contracts with mining pools for guaranteed transaction acceptance? IIRC
you are still an advisor to them. This is a serious concern for the
reasons I outlined in my post.

Equally if anyone else from Coinbase would like to chime in that'd be
great.

-- 
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0d7110f3a176228445ed710afd332291384992ed89c5c1a7


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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Chun Wang

Before F2Pool's launch, I performed probably the only successful
bitcoin double spend in the March 2013 fork without any mining power.
[ https://bitcointalk.org/index.php?topic=152348.0 ] I know how bad
the full RBF is. We are going to switch to FSS RBF in a few hours.
Sorry.

On Fri, Jun 19, 2015 at 9:44 PM, Peter Todd p...@petertodd.org wrote:
 On Fri, Jun 19, 2015 at 09:33:05AM -0400, Stephen Morse wrote:
 It is disappointing that F2Pool would enable full RBF when the safe
 alternative, first-seen-safe RBF, is also available, especially since the
 fees they would gain by supporting full RBF over FSS RBF would likely be
 negligible. Did they consider using FSS RBF instead?

 Specifically the following is what I told them:

 We are
 interested in the replace-by-fee patch, but I am not following the
 development closely, more background info is needed, like what the
 difference between standard and zeroconf versions? Thanks.

 Great!

 Basically both let you replace one transaction with another that pays a
 higher fee. First-seen-safe replace-by-fee adds the additional criteria
 that all outputs of the old transaction still need to be paid by the new
 transaction, with = as many Bitcoins. Basically, it makes sure that if
 someone was paid by tx1, then tx2 will still pay them.

 I've written about how wallets can use RBF and FSS-RBF to more
 efficiently use the blockchain on the bitcoin-development mailing list:

 http://www.mail-archive.com/bitcoin-development@lists.sourceforge.net/msg07813.html
 http://www.mail-archive.com/bitcoin-development@lists.sourceforge.net/msg07829.html

 Basically, for the purpose of increasing fees, RBF is something like %50
 cheaper than CPFP, and FSS-RBF is something like %25 cheaper.

 In addition, for ease of implementation, my new FSS-RBF has a number of
 other restrictions. For instance, you can't replace multiple
 transactions with one, you can't replace a transaction whose outputs
 have already been spent, you can't replace a transaction with one that
 spends additional unconfirmed inputs, etc. These restrictions aren't
 set in stone, but they do make the code simpler and less likely to
 have bugs.

 In comparison my previous standard RBF patch can replace multiple
 transactions with one, can replace long chains of transactions, etc.
 It's willing to do more computation before deciding if a transaction
 should be replaced, with more complex logic; it probably has a higher
 chance of having a bug or DoS attack.

 You've probably seen the huge controversy around zeroconf with regard to
 standard replace-by-fee. While FSS RBF doesn't make zeroconf any safer,
 it also doesn't make it any more dangerous, so politically with regard
 to zeroconf it makes no difference. You *can* still use it doublespend
 by taking advantage of how different transactions are accepted
 differently, but that's true of *every* change we've ever made to
 Bitcoin Core - by upgrading to v0.10 from v0.9 you've also broken
 zeroconf in the same way.


 Having said that... honestly, zeroconf is pretty broken already. Only
 with pretty heroic measures like connecting to a significant fraction of
 the Bitcoin network at once, as well as connecting to getblocktemplate
 supporting miners to figure out what transactions are being mined, are
 services having any hope of avoiding getting ripped off. For the average
 user their wallets do a terrible job of showing whether or not an
 unconfirmed transaction will go through. For example, Schildbach's
 Bitcoin wallet for Android has no code at all to detect double-spends
 until they get mined, and I've been able to trick it into showing
 completely invalid transactions. In fact, currently Bitcoin XT will
 relay invalid transactions that are doublepsends, and Schildbach's
 wallet displays them as valid, unconfirmed, payments. It's really no
 surprise to me that nearly no-one in the Bitcoin ecosystem accepts
 unconfirmed transactions without some kind of protection that doesn't
 rely on first-seen-safe mempool behavior. For instance, many ATM's these
 days know who their customers are due to AML requirements, so while you
 can deposit Bitcoins and get your funds instantly, the protection for
 the ATM operator is that they can go to the police if you rip them off;
 I've spoken to ATM operators who didn't do this who've lost hundreds or
 even thousands of dollars before giving up on zeroconf.

 My big worry with zeroconf is a service like Coinbase or Shapeshift
 coming to rely on it, and then attempting to secure it by gaining
 control of a majority of hashing power. For instance, if Coinbase had
 contracts with 80% of the Bitcoin hashing power to guarantee their
 transactions would get mined, but 20% of the hashing power didn't sign
 up, then the only way to guarantee their transactions could be for the
 80% to not build on blocks containing doublespends by the 20%. There's
 no way in a decentralized network to come to consensus about what
 transactions are or are

Re: [Bitcoin-development] Mailman incompatibility with DKIM ...

2015-06-19 Thread Warren Togami Jr.

On Thu, Jun 18, 2015 at 11:56 PM, Mike Hearn m...@plan99.net wrote:

 We already removed the footer because it was incompatible with DKIM
 signing.  Keeping the [Bitcoin-dev]  prepend tag in subject is compatible
 with DKIM header signing only if the poster manually prepends it in their
 subject header.


 I still see footers being added to this list by SourceForge?


The new list currently has footers removed during testing.  I am not
pleased with the need to remove the subject tag and footer to be more
compatible with DKIM users.




 Opinions?


 I've asked Jeff to not use his @bitpay.com account for now.


I'm guessing DKIM enforcement is not very common because of issues like
this?

It seems that Sourceforge silently drops DKIM enforced mail like
jgarzik's.  LF seems to pass along their mail but mangles the header/body
and makes DKIM verification fail, which causes gmail to toss it into the
spam folder.  I think this behavior is slightly worse than Sourceforge
because it makes the poster think their message was successfully sent (it
is in the archive), but many subscribers never see it due to the spam
binning.

I don't see any good solution to this except an auto-reject for DKIM
enforced domain postings.  Yes this is rather terrible, but the instant
rejection is vastly better than Sourceforge silently dropping the post or
LF getting stuck in spam filters.

We should also auto-reject any other reason for mail getting stuck in the
moderation queue like including non-subscribers.  I considered
auto-rejecting spam too, but that could go horribly wrong as a false From
address could make the Mailman server into a spammer itself.  We may have
no choice but to silently drop spam for that reason.

Warren
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Re: [Bitcoin-development] Concerns Regarding Threats by a Developer to Remove Commit Access from Other Developers

Yeah, but increasing block-size is not a longterm solution.

Are you sure? That sort of statement is hard to answer because it doesn't
say what you think long term is, or how much you expect Bitcoin to grow.

Satoshi thought it was a perfectly fine long term solution because he
thought hardware would get cheaper as fast or faster than Bitcoin would
grow. You may disagree with him, but as we're talking about the future are
you 100% certain he was wrong? I did calculations a long time ago that
suggested even with today's hardware (+some software optimisations) it
would be feasible to keep up with Visa.

Hardware improvements can be unintuitive. There's a spreadsheet here that
lets you play with various parameters.

https://docs.google.com/spreadsheets/d/1PJvrAAOVYVszfRRLhKqd1R9lRiOAImzAfdeb6ajATEY/edit#gid=1451669128

(note: the spreadsheet says avg txn size is 250 bytes, but if you check the
formula for the middle column, it does actually use 500 bytes as the
multiplier hard coded).

Necessary higher fees are a logical consequence of lower subsidies.
Bitcoin was basically free to use at the beginning because miners got paid
with new coins at the expense of those who already hold coins.
Eventually there needs to be a mechanism which matches supply and demand.

That's not clear either, I'm afraid.

Remember that there's an upper limit on how high Bitcoin fees can go. When
fees become higher than what the banking system charges, many users won't
use Bitcoin for moving money around anymore. Fees cannot really go much
higher than that even if you assume the currency is still attractive for
other reasons, because people would just sell their coins for fiat, move
the fiat, and buy back the coins the other side.

The way mining will be funded in future is an open question. There are
differing proposals. Still, even with a higher hard block size limit,
miners can always refuse to mine transactions that don't include a
particular fee. So if you're worried about this, miners aren't being forced
into any particular policy.
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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee


 For instance, if Coinbase had
 contracts with 80% of the Bitcoin hashing power to guarantee their
 transactions would get mined, but 20% of the hashing power didn't sign
 up, then the only way to guarantee their transactions could be for the
 80% to not build on blocks containing doublespends by the 20%.


This seems to be more of a problem with centralized mining than zeroconf
transactions.

Speaking of, could we get a confirmation that Coinbase is, or is not,
 one of the merchant service providers trying to get hashing power
 contracts with mining pools for guaranteed transaction acceptance? IIRC
 you are still an advisor to them. This is a serious concern for the
 reasons I outlined in my post.


We have no contracts in place or plans to do this that I am aware of.

However, we do rely pretty heavily on zeroconf transactions for merchant
processing, so if any significant portion of the mining pools started
running your unsafe RBF patch, then we would probably need to look into
this as a way to prevent fraud.

In the long term, I would love to see a safe, decentralized solution for
accepting zeroconf transactions. However, right now there is no such
solution supported by any wallets in use, and I don't think breaking the
current bitcoin behavior for everyone is the best way to achieve this.

Adrian
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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

On Fri, Jun 19, 2015 at 09:33:05AM -0400, Stephen Morse wrote:
 It is disappointing that F2Pool would enable full RBF when the safe
 alternative, first-seen-safe RBF, is also available, especially since the
 fees they would gain by supporting full RBF over FSS RBF would likely be
 negligible. Did they consider using FSS RBF instead?

Specifically the following is what I told them:

 We are
 interested in the replace-by-fee patch, but I am not following the
 development closely, more background info is needed, like what the
 difference between standard and zeroconf versions? Thanks.

Great!

Basically both let you replace one transaction with another that pays a
higher fee. First-seen-safe replace-by-fee adds the additional criteria
that all outputs of the old transaction still need to be paid by the new
transaction, with = as many Bitcoins. Basically, it makes sure that if
someone was paid by tx1, then tx2 will still pay them.

I've written about how wallets can use RBF and FSS-RBF to more
efficiently use the blockchain on the bitcoin-development mailing list:

http://www.mail-archive.com/bitcoin-development@lists.sourceforge.net/msg07813.html
http://www.mail-archive.com/bitcoin-development@lists.sourceforge.net/msg07829.html

Basically, for the purpose of increasing fees, RBF is something like %50
cheaper than CPFP, and FSS-RBF is something like %25 cheaper.

In addition, for ease of implementation, my new FSS-RBF has a number of
other restrictions. For instance, you can't replace multiple
transactions with one, you can't replace a transaction whose outputs
have already been spent, you can't replace a transaction with one that
spends additional unconfirmed inputs, etc. These restrictions aren't
set in stone, but they do make the code simpler and less likely to
have bugs.

In comparison my previous standard RBF patch can replace multiple
transactions with one, can replace long chains of transactions, etc.
It's willing to do more computation before deciding if a transaction
should be replaced, with more complex logic; it probably has a higher
chance of having a bug or DoS attack.

You've probably seen the huge controversy around zeroconf with regard to
standard replace-by-fee. While FSS RBF doesn't make zeroconf any safer,
it also doesn't make it any more dangerous, so politically with regard
to zeroconf it makes no difference. You *can* still use it doublespend
by taking advantage of how different transactions are accepted
differently, but that's true of *every* change we've ever made to
Bitcoin Core - by upgrading to v0.10 from v0.9 you've also broken
zeroconf in the same way.


Having said that... honestly, zeroconf is pretty broken already. Only
with pretty heroic measures like connecting to a significant fraction of
the Bitcoin network at once, as well as connecting to getblocktemplate
supporting miners to figure out what transactions are being mined, are
services having any hope of avoiding getting ripped off. For the average
user their wallets do a terrible job of showing whether or not an
unconfirmed transaction will go through. For example, Schildbach's
Bitcoin wallet for Android has no code at all to detect double-spends
until they get mined, and I've been able to trick it into showing
completely invalid transactions. In fact, currently Bitcoin XT will
relay invalid transactions that are doublepsends, and Schildbach's
wallet displays them as valid, unconfirmed, payments. It's really no
surprise to me that nearly no-one in the Bitcoin ecosystem accepts
unconfirmed transactions without some kind of protection that doesn't
rely on first-seen-safe mempool behavior. For instance, many ATM's these
days know who their customers are due to AML requirements, so while you
can deposit Bitcoins and get your funds instantly, the protection for
the ATM operator is that they can go to the police if you rip them off;
I've spoken to ATM operators who didn't do this who've lost hundreds or
even thousands of dollars before giving up on zeroconf.

My big worry with zeroconf is a service like Coinbase or Shapeshift
coming to rely on it, and then attempting to secure it by gaining
control of a majority of hashing power. For instance, if Coinbase had
contracts with 80% of the Bitcoin hashing power to guarantee their
transactions would get mined, but 20% of the hashing power didn't sign
up, then the only way to guarantee their transactions could be for the
80% to not build on blocks containing doublespends by the 20%. There's
no way in a decentralized network to come to consensus about what
transactions are or are not valid without mining itself, so you could
end up in a situation where unless you're part of one of the big pools
you can't reliably mine at all because your blocks may get rejected for
containing doublespends.

One of my goal with standard replace-by-fee is to prevent this scenario
by forcing merchants and others to implement ways of accepting zeroconf
transactions safely that work in a decentralized

Re: [Bitcoin-development] improving development model (Re: Concerns Regarding Threats by a Developer to Remove Commit Access from Other Developers

Hi Adam,

I am still confused about whether you actually support an increase in the
block size limit to happen right now. As you agree that this layer 2 you
speak of doesn't exist yet, and won't within the next 10-12 months (do you
agree that actually?), can you please state clearly that you will support
Gavin's patch once posted? As Gavin's work takes some ideas from BIP100 but
does/soon will have some code associated with it.

But if we do no RD on layer2, and insist that clients can never
 change to become layer2 aware, and layer2 is too hard etc


I think there's been some confusion here.

I, at least, have never argued that other systems can *never* happen. Never
is a long time, and I myself maintain a payment channels implementation.
These things have their place.

The argument is solely around the need to raise the block size *now* and
not allow the existing layer 1 to gum up and fall over.

If Stroem or Lightning or other block chains or Coinbase or secure hardware
tokens or whatever take off and people start moving bitcoins around that
way - fine. If they're choosing it of their own free will I have no issue
with that, nor does anyone else, I suspect.

However you don't seem fully confident that people actually will choose
whatever is being cooked up as layer 2, if left to their own devices.
Indeed it's impossible for anyone to know that, as no layer 2 actually
exists. Any such implementation could have all sorts of flaws that lead to
it not gaining traction.


 No offence but please find a way to gracefully stop and rejoin the
 constructive process. You can disagree on factors and points and be
 collaborative others disagree frequently and have done productive work
 cordially for years  under the BIP process.


As you know from the discussion with myself and Gavin a few days ago on
IRC, neither of us believe any such constructive process exists. There is
another thread to discuss the lack of such a process.


 - Did you accept payment from companies to lobby for 20MB blocks?


Oh please. Conspiracy theories, now, Adam? My position has been consistent
for years. I don't care whether the figure is 20 or something else (looks
like it'll be lucky 8 instead), but I have always been clear that the limit
must rise.

But for the avoidance of doubt: the answer is no.

Gavin is paid by MIT. The MIT deal gives Gavin complete independence.

I am currently self employed and most of income comes from a client that is
actually interested in Lighthouse. Luckily they have given me some leeway
to do general Bitcoin development as well, which this business falls under.
I would *much* rather be working on Lighthouse than this, and so would they.

But seeing as you've gone there - let me flip this around. Blockstream has
a very serious conflict of interest in this situation. I am by no means the
first to observe this. You are building two major products:

   1. Sidechains, a very complex approach to avoid changing the Bitcoin
   consensus rules to add new features.
   2. Lightning, a so-called layer two system for transaction routing

No surprise, the position of Blockstream employees is that hard forks must
never happen and that everyone's ordinary transactions should go via some
new network that doesn't yet exist.

The problem is that rather than letting the market decide between ordinary
Bitcoin and Lightning, you are attempting to strangle the regular Bitcoin
protocol because you don't trust people to spontaneously realise that they
should be using your companies products.

I know that many of you guys had these views before joining Blockstream. I
am not saying you are being paid to have views you didn't previously have.
I realise that birds of a feather flock together.

Regardless, that conflict of interest DOES exist, whether you like it or
not, because if you succeed in running Bitcoin out of capacity your own
company stands to benefit from selling consulting and services around your
preferred solutions.

With respect to user rights: all the polling done so far suggests users who
are paying attention strongly support increasing the block size. For
example:

Q: Should the bitcoin block size be raised in the next two years
A: 92% yes

http://www.poll-maker.com/results329839xee274Cb0-12#tab-2

Additionally, many Bitcoin users have explicitly delegated handling the
technical details to someone else, like a payment processor or their wallet
developers. Those people are nearly all sure that the block size limit
should rise too.

So please don't engage in idle speculation about users vs companies. They
aren't some kind of opposing forces. Companies live for their users, and
many of those companies were formed by long time Bitcoin users.

And finally, the Bitcoin social contract is not defined by whatever random
state the code was in at the time Gavin decided to focus on research. Both
Gavin and I have been working on Bitcoin longer than you, Gregory or Peter
Todd. The social contract was and still is defined by the

Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

Extremely disappointed to hear this. This change turns double spending from
a calculable (and affordable) risk for merchant payment processors into
certain profit for scammers, and provides no useful benefit for consumers.

I sincerely hope that F2Pool reconsider, given that RBF will decrease the
overall utility of bitcoin and reduce the number of people using it for
online purchases.

Adrian




On Fri, Jun 19, 2015 at 6:33 AM, Stephen Morse stephencalebmo...@gmail.com
wrote:

 It is disappointing that F2Pool would enable full RBF when the safe
 alternative, first-seen-safe RBF, is also available, especially since the
 fees they would gain by supporting full RBF over FSS RBF would likely be
 negligible. Did they consider using FSS RBF instead?

 Best,
 Stephen

 On Fri, Jun 19, 2015 at 6:39 AM, Peter Todd p...@petertodd.org wrote:

 Yesterday F2Pool, currently the largest pool with 21% of the hashing
 power, enabled full replace-by-fee (RBF) support after discussions with
 me. This means that transactions that F2Pool has will be replaced if a
 conflicting transaction pays a higher fee. There are no requirements for
 the replacement transaction to pay addresses that were paid by the
 previous transaction.


 I'm a user. What does this mean for me?
 ---

 In the short term, very little. Wallet software aimed at average users
 has no ability to reliably detect conditions where an unconfirmed
 transaction may be double-spent by the sender. For example, Schildbach's
 Bitcoin Wallet for Android doesn't even detect double-spends of
 unconfirmed transactions when connected to a RBF or Bitcoin XT nodes
 that propagate them. The least sophisticated double-spend attack
 possibly - simply broadcasting two conflicting transactions at the same
 time - has about 50% probability of success against these wallets.

 Additionally, SPV wallets based on bitcoinj can't even detect invalid
 transactions reliably, instead trusting the full node(s) it is connected
 too over the unauthenticated, unencrypted, P2P protocol to do validation
 for them. For instance due to a unfixed bug¹ Bitcoin XT nodes will relay
 double-spends that spend the output of the conflicting transaction. I've
 personally tested this with Schildbach's Bitcoin Wallet for Android,
 which shows such invalid transactions as standard, unconfirmed,
 transactions.

 Users should continue to assume that unconfirmed transactions could be
 trivially reversed by the sender until the first confirmation. In
 general, only the sender can reverse a transaction, so if you do trust
 the sender feel free to assume an unconfirmed transaction will
 eventually confirm. However, if you do not trust the sender and/or have
 no other recourse if they double-spend you, wait until at least the
 first confirmation before assuming the transaction will go through.

 In the long term, miner support of full RBF has a number of advantages
 to users, allowing you to more efficiently make transactions, paying
 lower fees. However you'll need a wallet supporting these features; none
 exist yet.


 I'm a business. What does this mean for me?
 ---

 If you use your own node to verify transactions, you probably are in a
 similar situation as average users, so again, this means very little to
 you.

 If you use a payment processor/transaction API such as BitPay, Coinbase,
 BlockCypher, etc. you may or may not be accepting unconfirmed
 transactions, and they may or may not be guaranteed by your payment
 processor even if double-spent. If like most merchants you're using the
 API such that confirmations are required prior to accepting orders (e.g.
 taking a meaningful loss such as shipping a product if the tx is
 reversed) nothing changes for you. If not I recommend you contact your
 payment processor.


 I'm a miner. Why should I support replace-by-fee?
 -

 Whether full or first-seen-safe⁵ RBF support (along with
 child-pays-for-parent) is an important step towards a fully functioning
 transaction fee market that doesn't lead to users' transactions getting
 mysteriously stuck, particularly during network flooding
 events/attacks. A better functioning fee market will help reduce
 pressure to increase the blocksize, particularly from the users creating
 the most valuable transactions.

 Full RBF also helps make use of the limited blockchain space more
 efficiently, with up to 90%+ transaction size savings possible in some
 transaction patterns. (e.g. long payment chains⁶) More users in less
 blockchain space will lead to higher overall fees per block.

 Finally as we'll discuss below full RBF prevents a number of serious
 threats to the existing level playing field that miners operate in.


 Why can't we make accepting unconfirmed txs from untrusted people safe?
 ---

 For a decentralized wallet, the situation

Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Chun Wang

Hello. We recognize the problem. We will switch to FSS RBF soon. Thanks.

On Fri, Jun 19, 2015 at 9:33 PM, Stephen Morse
stephencalebmo...@gmail.com wrote:
 It is disappointing that F2Pool would enable full RBF when the safe
 alternative, first-seen-safe RBF, is also available, especially since the
 fees they would gain by supporting full RBF over FSS RBF would likely be
 negligible. Did they consider using FSS RBF instead?

 Best,
 Stephen

 On Fri, Jun 19, 2015 at 6:39 AM, Peter Todd p...@petertodd.org wrote:

 Yesterday F2Pool, currently the largest pool with 21% of the hashing
 power, enabled full replace-by-fee (RBF) support after discussions with
 me. This means that transactions that F2Pool has will be replaced if a
 conflicting transaction pays a higher fee. There are no requirements for
 the replacement transaction to pay addresses that were paid by the
 previous transaction.


 I'm a user. What does this mean for me?
 ---

 In the short term, very little. Wallet software aimed at average users
 has no ability to reliably detect conditions where an unconfirmed
 transaction may be double-spent by the sender. For example, Schildbach's
 Bitcoin Wallet for Android doesn't even detect double-spends of
 unconfirmed transactions when connected to a RBF or Bitcoin XT nodes
 that propagate them. The least sophisticated double-spend attack
 possibly - simply broadcasting two conflicting transactions at the same
 time - has about 50% probability of success against these wallets.

 Additionally, SPV wallets based on bitcoinj can't even detect invalid
 transactions reliably, instead trusting the full node(s) it is connected
 too over the unauthenticated, unencrypted, P2P protocol to do validation
 for them. For instance due to a unfixed bug¹ Bitcoin XT nodes will relay
 double-spends that spend the output of the conflicting transaction. I've
 personally tested this with Schildbach's Bitcoin Wallet for Android,
 which shows such invalid transactions as standard, unconfirmed,
 transactions.

 Users should continue to assume that unconfirmed transactions could be
 trivially reversed by the sender until the first confirmation. In
 general, only the sender can reverse a transaction, so if you do trust
 the sender feel free to assume an unconfirmed transaction will
 eventually confirm. However, if you do not trust the sender and/or have
 no other recourse if they double-spend you, wait until at least the
 first confirmation before assuming the transaction will go through.

 In the long term, miner support of full RBF has a number of advantages
 to users, allowing you to more efficiently make transactions, paying
 lower fees. However you'll need a wallet supporting these features; none
 exist yet.


 I'm a business. What does this mean for me?
 ---

 If you use your own node to verify transactions, you probably are in a
 similar situation as average users, so again, this means very little to
 you.

 If you use a payment processor/transaction API such as BitPay, Coinbase,
 BlockCypher, etc. you may or may not be accepting unconfirmed
 transactions, and they may or may not be guaranteed by your payment
 processor even if double-spent. If like most merchants you're using the
 API such that confirmations are required prior to accepting orders (e.g.
 taking a meaningful loss such as shipping a product if the tx is
 reversed) nothing changes for you. If not I recommend you contact your
 payment processor.


 I'm a miner. Why should I support replace-by-fee?
 -

 Whether full or first-seen-safe⁵ RBF support (along with
 child-pays-for-parent) is an important step towards a fully functioning
 transaction fee market that doesn't lead to users' transactions getting
 mysteriously stuck, particularly during network flooding
 events/attacks. A better functioning fee market will help reduce
 pressure to increase the blocksize, particularly from the users creating
 the most valuable transactions.

 Full RBF also helps make use of the limited blockchain space more
 efficiently, with up to 90%+ transaction size savings possible in some
 transaction patterns. (e.g. long payment chains⁶) More users in less
 blockchain space will lead to higher overall fees per block.

 Finally as we'll discuss below full RBF prevents a number of serious
 threats to the existing level playing field that miners operate in.


 Why can't we make accepting unconfirmed txs from untrusted people safe?
 ---

 For a decentralized wallet, the situation is pretty bleak. These wallets
 only have a handful of connections to the network, with no way of
 knowing if those connections give an accurate view of what transactions
 miners actually know about.

 The only serious attempt to fix this problem for decentralized wallets
 that has been actually deployed is

Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Stephen Morse

It is disappointing that F2Pool would enable full RBF when the safe
alternative, first-seen-safe RBF, is also available, especially since the
fees they would gain by supporting full RBF over FSS RBF would likely be
negligible. Did they consider using FSS RBF instead?

Best,
Stephen

On Fri, Jun 19, 2015 at 6:39 AM, Peter Todd p...@petertodd.org wrote:

 Yesterday F2Pool, currently the largest pool with 21% of the hashing
 power, enabled full replace-by-fee (RBF) support after discussions with
 me. This means that transactions that F2Pool has will be replaced if a
 conflicting transaction pays a higher fee. There are no requirements for
 the replacement transaction to pay addresses that were paid by the
 previous transaction.


 I'm a user. What does this mean for me?
 ---

 In the short term, very little. Wallet software aimed at average users
 has no ability to reliably detect conditions where an unconfirmed
 transaction may be double-spent by the sender. For example, Schildbach's
 Bitcoin Wallet for Android doesn't even detect double-spends of
 unconfirmed transactions when connected to a RBF or Bitcoin XT nodes
 that propagate them. The least sophisticated double-spend attack
 possibly - simply broadcasting two conflicting transactions at the same
 time - has about 50% probability of success against these wallets.

 Additionally, SPV wallets based on bitcoinj can't even detect invalid
 transactions reliably, instead trusting the full node(s) it is connected
 too over the unauthenticated, unencrypted, P2P protocol to do validation
 for them. For instance due to a unfixed bug¹ Bitcoin XT nodes will relay
 double-spends that spend the output of the conflicting transaction. I've
 personally tested this with Schildbach's Bitcoin Wallet for Android,
 which shows such invalid transactions as standard, unconfirmed,
 transactions.

 Users should continue to assume that unconfirmed transactions could be
 trivially reversed by the sender until the first confirmation. In
 general, only the sender can reverse a transaction, so if you do trust
 the sender feel free to assume an unconfirmed transaction will
 eventually confirm. However, if you do not trust the sender and/or have
 no other recourse if they double-spend you, wait until at least the
 first confirmation before assuming the transaction will go through.

 In the long term, miner support of full RBF has a number of advantages
 to users, allowing you to more efficiently make transactions, paying
 lower fees. However you'll need a wallet supporting these features; none
 exist yet.


 I'm a business. What does this mean for me?
 ---

 If you use your own node to verify transactions, you probably are in a
 similar situation as average users, so again, this means very little to
 you.

 If you use a payment processor/transaction API such as BitPay, Coinbase,
 BlockCypher, etc. you may or may not be accepting unconfirmed
 transactions, and they may or may not be guaranteed by your payment
 processor even if double-spent. If like most merchants you're using the
 API such that confirmations are required prior to accepting orders (e.g.
 taking a meaningful loss such as shipping a product if the tx is
 reversed) nothing changes for you. If not I recommend you contact your
 payment processor.


 I'm a miner. Why should I support replace-by-fee?
 -

 Whether full or first-seen-safe⁵ RBF support (along with
 child-pays-for-parent) is an important step towards a fully functioning
 transaction fee market that doesn't lead to users' transactions getting
 mysteriously stuck, particularly during network flooding
 events/attacks. A better functioning fee market will help reduce
 pressure to increase the blocksize, particularly from the users creating
 the most valuable transactions.

 Full RBF also helps make use of the limited blockchain space more
 efficiently, with up to 90%+ transaction size savings possible in some
 transaction patterns. (e.g. long payment chains⁶) More users in less
 blockchain space will lead to higher overall fees per block.

 Finally as we'll discuss below full RBF prevents a number of serious
 threats to the existing level playing field that miners operate in.


 Why can't we make accepting unconfirmed txs from untrusted people safe?
 ---

 For a decentralized wallet, the situation is pretty bleak. These wallets
 only have a handful of connections to the network, with no way of
 knowing if those connections give an accurate view of what transactions
 miners actually know about.

 The only serious attempt to fix this problem for decentralized wallets
 that has been actually deployed is Andresen/Harding's double-spend
 relaying, implemented in Bitcoin XT. It relays up to one double-spend
 transaction per double-spent txout, with the intended effect to warn

Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

On Fri, Jun 19, 2015 at 07:00:56AM -0700, Adrian Macneil wrote:
 
  For instance, if Coinbase had
  contracts with 80% of the Bitcoin hashing power to guarantee their
  transactions would get mined, but 20% of the hashing power didn't sign
  up, then the only way to guarantee their transactions could be for the
  80% to not build on blocks containing doublespends by the 20%.
 
 
 This seems to be more of a problem with centralized mining than zeroconf
 transactions.

You're mistaking cause and effect: the contracts will drive
centralization of mining, as only the larger, non-anonymous, players
have the ability to enter into such contracts.

 Speaking of, could we get a confirmation that Coinbase is, or is not,
  one of the merchant service providers trying to get hashing power
  contracts with mining pools for guaranteed transaction acceptance? IIRC
  you are still an advisor to them. This is a serious concern for the
  reasons I outlined in my post.
 
 
 We have no contracts in place or plans to do this that I am aware of.
 
 However, we do rely pretty heavily on zeroconf transactions for merchant
 processing, so if any significant portion of the mining pools started
 running your unsafe RBF patch, then we would probably need to look into
 this as a way to prevent fraud.

What happens if the mining pools who are mining double-spends aren't
doing it delibrately? Sybil attacking pools appears to have been done
before to get double-spends though, equally there are many other changes
the reduce the reliability of transaction confirmations. For instance
the higher demands on bandwidth of a higher blocksize will inevitably
reduce the syncronicity of mempools, resulting in double-spend
opportunities. Similarly many proposals to limit mempool size allow
zeroconf double-spends.

In that case would you enter into such contracts?

-- 
'peter'[:-1]@petertodd.org
05a4c76d0bf088ef3e059914d6fc0335683a92b5be01b7dc


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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Lawrence Nahum

Chun Wang 1240902 at gmail.com writes:

 Hello. We recognize the problem. We will switch to FSS RBF soon. Thanks.

FSS RBF is better than no RBF but we think it is better to use full RBF.

We think Full RBF is better for a number of reasons:

-user experience
-efficiency
-cost
-code complexity

We think FSS RBF is  great progress but ultimately less efficient and more 
complicated to keep alive something that never worked properly.

And why would miner pick the option paying less when other miners run the 
option paying more? It may be soon more than 1-5% of block reward.

A lot of users don't have multiple UTXO handy.

Full RBF is the best, second FSS RBF and we'd be looking into supporting 
them both separately so that miners and users can pick whichever they 
prefer.

If users only had one UTXO it makes sense to use Full RBF since there are no 
other options.

Disclosure: GreenAddress always believed zero conf transactions are not 
secure and that miners have the incentive to run FBF; this bias doesn't make 
the above less true 



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Re: [Bitcoin-development] improving development model (Re: Concerns Regarding Threats by a Developer to Remove Commit Access from Other Developers

IPv4 came before IPv6…you pick up on things quickly :)

 On Jun 19, 2015, at 5:48 AM, Marcel Jamin mar...@jamin.net wrote:
 
  At the risk of stating cliches, the Mac came before the Windows PC…Yahoo! 
  came before Google…MySpace came before Facebook…
 
 And TCP/IP came before... oh wait...
 
 2015-06-19 14:02 GMT+02:00 Eric Lombrozo elombr...@gmail.com 
 mailto:elombr...@gmail.com:
 
 On Jun 19, 2015, at 3:45 AM, Dr Adam Back a...@cypherspace.org 
 mailto:a...@cypherspace.org wrote:
 
 That wont be good for the companies either, but they may not see that
 until they've killed it, many companies operate on a1 or 2 year
 time-horizon.  They may say screw layer2, I have a runway and I need
 micropayments to the wazoo and I dont have the dev resources for that.
 
 Exactly, Adam.
 
 Except, I think the genie is out of the bottle - these ideas are too powerful 
 for them to be killed forever. They will probably survive even if this 
 scenario comes to pass…but in a different network under a different name…and 
 Bitcoin will be relegated to the history books and walls of museums.
 
 Most of the potential brainpower available on this Earth to make serious, 
 profound contributions to this movement haven’t even begun to touch it. Just 
 because you happen to run a Bitcoin startup right now…even if you’ve received 
 millions of dollars in funding…don’t think that the whole world has low 
 standards and is lazy! Someone WILL eventually build something better than we 
 can presently imagine.
 
 First mover advantage and the network effect are vastly overrated. At the 
 risk of stating cliches, the Mac came before the Windows PC…Yahoo! came 
 before Google…MySpace came before Facebook…Bitcoin came before we don’t know 
 yet.
 
 
 - Eric Lombrozo
 
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[Bitcoin-development] Fee Market Effects

2015-06-19 Thread Tim Witters

A lot of standpoints for keeping the current block size are focused on 
creating a healthy fee market. I have some open questions for this list 
in regards to the user incentives of using bitcoin, when such a strong 
fee market is in place.
In my scenario the average fee for a normal transactions will be around 
1$ to put in on the blockchain with a reasonable confirmation time.

1. How will we get user adoptions if the fees on bitcoin transactions 
our not competitive with other services like PayPal and the like. (from 
a payment solution viewpoint) It is one of the main ‘pitch lines’ to get 
people to adopt bitcoin. “Send value to the other side of the world for 
almost 0 fees”

2. Many suggest the use of a level 2 layer will facilitate the 
scalability for bitcoin with technologies like the lightning network. 
But to my knowledge, all these solutions still need to publish to the 
actual blockchain when they need to settle. Meaning you will have to pay 
the fees at least once. In case of lightning this will be when the 
channel is closed. 

This means moves more to a monthly payed service, where you open a 
payment channel each month and pay the fee at the end. But a system like 
this keeps money locked for the duration of the channel. And one of the 
main ‘pitch’ point of the bitcoin economy was you get your money 
instantly, not at the end of the month when the payment channel is 
closed. 

3. The idea of the fee market is people will start using the layer 2 
systems. When this happens, what are the incentives to keep running a 
node? The incentives today are already quite small, the only real one is 
to support the network or make payments through your own trusted node. 
If you are only using a layer 2 solution, are there any reasons left to 
run my own bitcoin node, resulting in less decentralization.

4. Do we need a fee market right now? It seems to me the current 
block reward is still high enough for miners to be able to make money 
and secure the network. No real fee market is therefore needed to help 
these miners. 

Regardless of our opinion, why don’t we let the miners decide? The 
BIP100 proposal seems to do this. If the majority of miners decide they 
want bigger blocks they just vote for this. If they want a fee market 
because their return is enough, they can keep the limit and let the 
demand for more blockspace result in a higher fee market. 
Just some of my thoughts about the results of full blocks and the 
resulting fee market. It seems to me a strong fee market might hurt the 
young ecosystem more, then it might help it (miners are currently 
compensated enough). The same goes for decentralization, when people 
more their resources to the level 2 solution or stop using bitcoin due 
to the higher fees compared to comparable services.
Cheers,
Tim Witters 
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Re: [Bitcoin-development] Concerns Regarding Threats by a Developer to Remove Commit Access from Other Developers

2015-06-19 Thread GC


When is the right time to allow space pressure to rise that ratio?
When the subsidy is at 1.5625, for example, it may be too late to

I don¹t believe we have to decide, the miners will do that and are doing
that already.

start a non-catastrophic transition from subsidies to fees.
I don't claim to know that, but it's something that worries me.
No matter how many people say that's too far away in the future to
worry about it, I still worry about it and I'm sure more people do.
What if when it's time to care about it we discover that we should
have started to do things about it long ago to minimize the risks of
this transition?

Hmmm. What should be the price of an email? How much should DARPA have
charged for using TCP/IP?

I see a lot of well-paid, first-world technologists arguing for commercial
returns on a nacent protocol which could could offer benefits to the
unbanked.
Is that really the vision: to (re)build a de-centralized Paypal with
slightly cheaper fees and cool hooks into off-chain commercial systems
providing profits for the already rich?

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Re: [Bitcoin-development] improving development model (Re: Concerns Regarding Threats by a Developer to Remove Commit Access from Other Developers


 On Jun 19, 2015, at 3:45 AM, Dr Adam Back a...@cypherspace.org 
 mailto:a...@cypherspace.org wrote:
 
 That wont be good for the companies either, but they may not see that
 until they've killed it, many companies operate on a1 or 2 year
 time-horizon.  They may say screw layer2, I have a runway and I need
 micropayments to the wazoo and I dont have the dev resources for that.

Exactly, Adam.

Except, I think the genie is out of the bottle - these ideas are too powerful 
for them to be killed forever. They will probably survive even if this scenario 
comes to pass…but in a different network under a different name…and Bitcoin 
will be relegated to the history books and walls of museums.

Most of the potential brainpower available on this Earth to make serious, 
profound contributions to this movement haven’t even begun to touch it. Just 
because you happen to run a Bitcoin startup right now…even if you’ve received 
millions of dollars in funding…don’t think that the whole world has low 
standards and is lazy! Someone WILL eventually build something better than we 
can presently imagine.

First mover advantage and the network effect are vastly overrated. At the risk 
of stating cliches, the Mac came before the Windows PC…Yahoo! came before 
Google…MySpace came before Facebook…Bitcoin came before we don’t know yet.


- Eric Lombrozo


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Re: [Bitcoin-development] Concerns Regarding Threats by a Developer to Remove Commit Access from Other Developers

2015-06-19 Thread Benjamin

Yeah, but increasing block-size is not a longterm solution. Necessary
higher fees are a logical consequence of lower subsidies. Bitcoin was
basically free to use at the beginning because miners got paid with
new coins at the expense of those who already hold coins. Eventually
there needs to be a mechanism which matches supply and demand.

On Fri, Jun 19, 2015 at 11:37 AM, Mike Hearn m...@plan99.net wrote:
Or alternatively, fix the reasons why users would have negative
experiences with full blocks

It's impossible, Mark. By definition if Bitcoin does not have sufficient
capacity for everyone's transactions, some users who were using it will be
kicked out to make way for the others. Whether that happens in some kind of
stable organised way or (as with the current code) a fairly chaotic way
doesn't change the fundamental truth: some users will find their bitcoin
savings have become uneconomic to spend.

Here's a recent user complaint that provides a preview of coming
attractions:

https://www.reddit.com/r/Bitcoin/comments/39r3bi/breadwallet_asking_me_to_pay_over_10_network_fee/

Hello, I'm just trying to send my small Sarutobi-tips stash (12,159 bits)
onto a paper wallet. When I try to send it, a window pops up stating
insufficient funds for bitcoin network fee, reduce payment amount by 1,389
bits? This would be a fee of $0.32 to send my $2.82, leaving me with $2.50.

These sorts of complaints will get more frequent and more extreme in the
coming months. I realise that nobody at Blockstream is in the position of
running an end user facing service, but many of us are and we will be
the ones that face the full anger of ordinary users as Bitcoin hits the
wall.

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Re: [Bitcoin-development] Concerns Regarding Threats by a Developer to Remove Commit Access from Other Developers

2015-06-19 Thread GC

Benjamin,

Timeframe for network congestion and users experiencing service
degradation = between now and middle of next year.

Timeframe for transaction fees topping block reward fees = many years in
the future, based on current ratio of block reward to fees.

What is the more pressing requirement now? A working ³fee market² or a
reliable, useful payment network that scales without falling over in the
next 2-3 years.

On 19/6/15 4:53 pm, Benjamin benjamin.l.cor...@gmail.com wrote:

Yeah, but increasing block-size is not a longterm solution. Necessary
higher fees are a logical consequence of lower subsidies. Bitcoin was
basically free to use at the beginning because miners got paid with
new coins at  the expense of those who already hold coins. Eventually
there needs to be a mechanism which matches supply and demand.

On Fri, Jun 19, 2015 at 11:37 AM, Mike Hearn m...@plan99.net wrote:
 Or alternatively, fix the reasons why users would have negative
 experiences with full blocks


 It's impossible, Mark. By definition if Bitcoin does not have sufficient
 capacity for everyone's transactions, some users who were using it will
be
 kicked out to make way for the others. Whether that happens in some
kind of
 stable organised way or (as with the current code) a fairly chaotic way
 doesn't change the fundamental truth: some users will find their bitcoin
 savings have become uneconomic to spend.

 Here's a recent user complaint that provides a preview of coming
 attractions:

 
https://www.reddit.com/r/Bitcoin/comments/39r3bi/breadwallet_asking_me_to
_pay_over_10_network_fee/

 Hello, I'm just trying to send my small Sarutobi-tips stash (12,159
bits)
 onto a paper wallet. When I try to send it, a window pops up stating
 insufficient funds for bitcoin network fee, reduce payment amount by
1,389
 bits? This would be a fee of $0.32 to send my $2.82, leaving me with
$2.50.


 These sorts of complaints will get more frequent and more extreme in the
 coming months. I realise that nobody at Blockstream is  in the position
of
 running an end user facing service, but many of us are  and we will
be
 the ones that face the full anger of ordinary users as Bitcoin hits the
 wall.

 
-
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[Bitcoin-development] F2Pool has enabled full replace-by-fee

Yesterday F2Pool, currently the largest pool with 21% of the hashing
power, enabled full replace-by-fee (RBF) support after discussions with
me. This means that transactions that F2Pool has will be replaced if a
conflicting transaction pays a higher fee. There are no requirements for
the replacement transaction to pay addresses that were paid by the
previous transaction.


I'm a user. What does this mean for me?
---

In the short term, very little. Wallet software aimed at average users
has no ability to reliably detect conditions where an unconfirmed
transaction may be double-spent by the sender. For example, Schildbach's
Bitcoin Wallet for Android doesn't even detect double-spends of
unconfirmed transactions when connected to a RBF or Bitcoin XT nodes
that propagate them. The least sophisticated double-spend attack
possibly - simply broadcasting two conflicting transactions at the same
time - has about 50% probability of success against these wallets.

Additionally, SPV wallets based on bitcoinj can't even detect invalid
transactions reliably, instead trusting the full node(s) it is connected
too over the unauthenticated, unencrypted, P2P protocol to do validation
for them. For instance due to a unfixed bug¹ Bitcoin XT nodes will relay
double-spends that spend the output of the conflicting transaction. I've
personally tested this with Schildbach's Bitcoin Wallet for Android,
which shows such invalid transactions as standard, unconfirmed,
transactions.

Users should continue to assume that unconfirmed transactions could be
trivially reversed by the sender until the first confirmation. In
general, only the sender can reverse a transaction, so if you do trust
the sender feel free to assume an unconfirmed transaction will
eventually confirm. However, if you do not trust the sender and/or have
no other recourse if they double-spend you, wait until at least the
first confirmation before assuming the transaction will go through.

In the long term, miner support of full RBF has a number of advantages
to users, allowing you to more efficiently make transactions, paying
lower fees. However you'll need a wallet supporting these features; none
exist yet.


I'm a business. What does this mean for me?
---

If you use your own node to verify transactions, you probably are in a
similar situation as average users, so again, this means very little to
you.

If you use a payment processor/transaction API such as BitPay, Coinbase,
BlockCypher, etc. you may or may not be accepting unconfirmed
transactions, and they may or may not be guaranteed by your payment
processor even if double-spent. If like most merchants you're using the
API such that confirmations are required prior to accepting orders (e.g.
taking a meaningful loss such as shipping a product if the tx is
reversed) nothing changes for you. If not I recommend you contact your
payment processor.


I'm a miner. Why should I support replace-by-fee?
-

Whether full or first-seen-safe⁵ RBF support (along with
child-pays-for-parent) is an important step towards a fully functioning
transaction fee market that doesn't lead to users' transactions getting
mysteriously stuck, particularly during network flooding
events/attacks. A better functioning fee market will help reduce
pressure to increase the blocksize, particularly from the users creating
the most valuable transactions.

Full RBF also helps make use of the limited blockchain space more
efficiently, with up to 90%+ transaction size savings possible in some
transaction patterns. (e.g. long payment chains⁶) More users in less
blockchain space will lead to higher overall fees per block.

Finally as we'll discuss below full RBF prevents a number of serious
threats to the existing level playing field that miners operate in.


Why can't we make accepting unconfirmed txs from untrusted people safe?
---

For a decentralized wallet, the situation is pretty bleak. These wallets
only have a handful of connections to the network, with no way of
knowing if those connections give an accurate view of what transactions
miners actually know about.

The only serious attempt to fix this problem for decentralized wallets
that has been actually deployed is Andresen/Harding's double-spend
relaying, implemented in Bitcoin XT. It relays up to one double-spend
transaction per double-spent txout, with the intended effect to warn
recipients. In practice however this functionality makes it easier to
double-spend rather than harder, by giving an efficient and easy way to
get double-spends to miners after the fact. Notably my RBF
implementation even connects to Bitcoin XT nodes, reserving a % of all
incoming and outgoing connection slots for them.

Additionally Bitcoin XT's double-spend relaying is subject to attacks
include bandwidth exhaustion, sybil

Re: [Bitcoin-development] Concerns Regarding Threats by a Developer to Remove Commit Access from Other Developers

2015-06-19 Thread Brooks Boyd

On Fri, Jun 19, 2015 at 4:37 AM, Mike Hearn m...@plan99.net wrote:

Or alternatively, fix the reasons why users would have negative
experiences with full blocks

It's impossible, Mark. *By definition* if Bitcoin does not have
sufficient capacity for everyone's transactions, some users who were using
it will be kicked out to make way for the others. Whether that happens in
some kind of stable organised way or (as with the current code) a fairly
chaotic way doesn't change the fundamental truth: *some users will find
their bitcoin savings have become uneconomic to spend*.

Here's a recent user complaint that provides a preview of coming
attractions:

https://www.reddit.com/r/Bitcoin/comments/39r3bi/breadwallet_asking_me_to_pay_over_10_network_fee/

Has there been any talk about reducing the time between blocks? If blocks
were allowed to come twice as fast, they would be able to clear pending
transactions in the mempool the same as if the block size doubled, but
would allow mining to stay more decentralized since miners wouldn't be
working on such large-scale blocks? It would still take more storage space
to store the blockchain, though.

Brooks
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[Bitcoin-development] Mailman incompatibility with DKIM ...

2015-06-19 Thread Warren Togami Jr.

Both you and jgarzik experienced mail getting tossed into gmail's spam
folder thanks to DKIM... I am concerned that DKIM is too fragile and not
very compatible with mailing lists.

We already removed the footer because it was incompatible with DKIM
signing.  Keeping the [Bitcoin-dev]  prepend tag in subject is compatible
with DKIM header signing only if the poster manually prepends it in their
subject header.

I am already concerned that the lack of the Mailman footer will make it
hard to identify where exactly subscribers need to go to unsubscribe or
look at archives.  Removing the subject tag might make DKIM enforcement
work a lot better, but I can easily see our obtuse subscribers as being
extra confused by this.

Opinions?

Warren

On Thu, Jun 18, 2015 at 11:38 PM, Arthur art...@powaaa.com wrote:

 warren | bad_duck: try manually adding [Bitcoin-dev]  to the beginning
 of the subject

 --
 Arthur

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Re: [Bitcoin-development] Concerns Regarding Threats by a Developer to Remove Commit Access from Other Developers


 Or alternatively, fix the reasons why users would have negative
 experiences with full blocks


It's impossible, Mark. *By definition* if Bitcoin does not have sufficient
capacity for everyone's transactions, some users who were using it will be
kicked out to make way for the others. Whether that happens in some kind of
stable organised way or (as with the current code) a fairly chaotic way
doesn't change the fundamental truth: *some users will find their bitcoin
savings have become uneconomic to spend*.

Here's a recent user complaint that provides a preview of coming
attractions:

https://www.reddit.com/r/Bitcoin/comments/39r3bi/breadwallet_asking_me_to_pay_over_10_network_fee/

Hello, I'm just trying to send my small Sarutobi-tips stash (12,159 bits)
 onto a paper wallet. When I try to send it, a window pops up stating
 insufficient funds for bitcoin network fee, reduce payment amount by 1,389
 bits? This would be a fee of $0.32 to send my $2.82, leaving me with $2.50.


These sorts of complaints will get more frequent and more extreme in the
coming months. I realise that nobody at Blockstream is  in the position of
running an end user facing service, but many of us are  and we will be
the ones that face the full anger of ordinary users as Bitcoin hits the
wall.
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Re: [Bitcoin-development] Mailman incompatibility with DKIM ...


 We already removed the footer because it was incompatible with DKIM
 signing.  Keeping the [Bitcoin-dev]  prepend tag in subject is compatible
 with DKIM header signing only if the poster manually prepends it in their
 subject header.


I still see footers being added to this list by SourceForge?


 Opinions?


I've asked Jeff to not use his @bitpay.com account for now.

The only real fix is to use a mailing list operator that is designed to
operate correctly with DKIM/DMARC, either by not modifying messages in
transit, or by re-sending (and ideally re-signing) under their own identity.

Though I'm sure this won't be an issue for the Linux Foundation, the latter
approach is dangerous because it means the list operator takes full
responsibility for any spamming that occurs from that domain. If the mail
server is ever hacked or spammers start posting to the lists themselves,
all that spam will be seen as originating from the listserv itself and the
reputation will be degraded. It can end with everyone's mail going to the
spam folder.
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Re: [Bitcoin-development] Mailman incompatibility with DKIM ...


 The new list currently has footers removed during testing.  I am not
 pleased with the need to remove the subject tag and footer to be more
 compatible with DKIM users.


Lists can do what are effectively MITM attacks on people's messages in any
way they like, if they resign for the messages themselves. That seems fair
to me!  :)


  I'm guessing DKIM enforcement is not very common because of issues like
 this?


DKIM is used by most mail on the internet. DMARC rules that publish in DNS
statements like All mail from bitpay.com is signed correctly so trash any
that isn't are used on some of the worlds most heavily phished domains
like google.com, PayPal, eBay, and indeed BitPay.

These rules are understood and enforced by all major webmail providers
including Gmail. It's actually only rusty geek infrastructure that has
problems with this, I've never heard of DKIM/DMARC users having issues
outside of dealing with mailman. The vast majority of email users who never
post to technical mailing lists benefit from it significantly.

Really everyone should use them. Adding cryptographic integrity to email is
hardly a crazy idea :)


 It seems that Sourceforge silently drops DKIM enforced mail like jgarzik's.


It's not SourceForge, it's your spam filter. His mail gets through to me
but it's all in the spam folder.
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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Chun Wang

On Fri, Jun 19, 2015 at 10:00 PM, Adrian Macneil adr...@coinbase.com wrote:
 However, we do rely pretty heavily on zeroconf transactions for merchant
 processing, so if any significant portion of the mining pools started
 running your unsafe RBF patch, then we would probably need to look into this
 as a way to prevent fraud.

This might be useful to you: https://www.f2pool.com/api/mempool

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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

-BEGIN PGP SIGNED MESSAGE-
Hash: SHA512

On 2015-06-19 15:11, Peter Todd wrote:
 If you ask me to pay you 1BTC at address A and I create tx1 that pays
 1BTC to A1 and 2BTC of chain to C, what's wrong with me creating tx2
 that still pays 1BTC to A, but now only pays 1.999BTC to C? I'm not
 defrauding you, I'm just reducing the value of my change address to pay
 a higher fee. Similarly if I now need to pay Bob 0.5BTC, I can create
 tx3 paying 1BTC to A, 0.5BTC to B, and 1.498BTC to C.
 
 Yet from the point of view of an external observer they have no idea 
 why
 the transaction outputs reduced in size, nor any way of knowing if 
 fraud
 did or did not occur.

If there are two transactions which spend the same inputs, and each 
transaction has completely different output scripts, then this is prima 
facie fraudulent. https://en.wikipedia.org/wiki/Prima_facie

If the two transactions have identical output scripts, and one output is 
reduced in value to increase the transaction fee, that has the 
appearance of honest dealing. There is a possibility that the payer has 
chose to under-pay their payee in order to over-pay the miner, but 
that's not what a reasonable observer would assume at first glance.

Adding outputs to a transaction, while keeping all the existing outputs 
exactly how they are is another way of increasing the transaction fee of 
a transaction and is prima facie non-fraudulent.

Note that child-pays-for-parent has none of this ambiguity.

 What do you think of Bitcoin XT then? It relays double-spends, which
 makes it much easier to get double-spends to miners than before. In
 particular you see a lot of zero-fee transactions being replaced by
 fee-paying transactions, relayed through Bitcoin XT nodes and then
 mined. Is that encouraging fraud?

I haven't closely looked into the features of Bitcoin XT because I'm 
hoping that it never becomes relevant. I do want to see a heterogenous 
implementation network develop, but Bitcoin XT doesn't really count 
since it's a derivative of the Bitcoin Core codebase.

In general, I think every signed Bitcoin transaction sent between 
different parties is part of a valid, enforceable contract (using common 
law definitions which predate any particular legal jurisdiction). 
Handling contracts and money is Serious Business and so the decision of 
how software should respond to double spends should not be made 
frivolously.

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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

Yes, FSS RBF is far better.


On Fri, Jun 19, 2015 at 6:52 AM, Chun Wang 1240...@gmail.com wrote:

 Before F2Pool's launch, I performed probably the only successful
 bitcoin double spend in the March 2013 fork without any mining power.
 [ https://bitcointalk.org/index.php?topic=152348.0 ] I know how bad
 the full RBF is. We are going to switch to FSS RBF in a few hours.
 Sorry.

 On Fri, Jun 19, 2015 at 9:44 PM, Peter Todd p...@petertodd.org wrote:
  On Fri, Jun 19, 2015 at 09:33:05AM -0400, Stephen Morse wrote:
  It is disappointing that F2Pool would enable full RBF when the safe
  alternative, first-seen-safe RBF, is also available, especially since
 the
  fees they would gain by supporting full RBF over FSS RBF would likely be
  negligible. Did they consider using FSS RBF instead?
 
  Specifically the following is what I told them:
 
  We are
  interested in the replace-by-fee patch, but I am not following the
  development closely, more background info is needed, like what the
  difference between standard and zeroconf versions? Thanks.
 
  Great!
 
  Basically both let you replace one transaction with another that pays a
  higher fee. First-seen-safe replace-by-fee adds the additional criteria
  that all outputs of the old transaction still need to be paid by the new
  transaction, with = as many Bitcoins. Basically, it makes sure that if
  someone was paid by tx1, then tx2 will still pay them.
 
  I've written about how wallets can use RBF and FSS-RBF to more
  efficiently use the blockchain on the bitcoin-development mailing list:
 
 
 http://www.mail-archive.com/bitcoin-development@lists.sourceforge.net/msg07813.html
 
 http://www.mail-archive.com/bitcoin-development@lists.sourceforge.net/msg07829.html
 
  Basically, for the purpose of increasing fees, RBF is something like %50
  cheaper than CPFP, and FSS-RBF is something like %25 cheaper.
 
  In addition, for ease of implementation, my new FSS-RBF has a number of
  other restrictions. For instance, you can't replace multiple
  transactions with one, you can't replace a transaction whose outputs
  have already been spent, you can't replace a transaction with one that
  spends additional unconfirmed inputs, etc. These restrictions aren't
  set in stone, but they do make the code simpler and less likely to
  have bugs.
 
  In comparison my previous standard RBF patch can replace multiple
  transactions with one, can replace long chains of transactions, etc.
  It's willing to do more computation before deciding if a transaction
  should be replaced, with more complex logic; it probably has a higher
  chance of having a bug or DoS attack.
 
  You've probably seen the huge controversy around zeroconf with regard to
  standard replace-by-fee. While FSS RBF doesn't make zeroconf any safer,
  it also doesn't make it any more dangerous, so politically with regard
  to zeroconf it makes no difference. You *can* still use it doublespend
  by taking advantage of how different transactions are accepted
  differently, but that's true of *every* change we've ever made to
  Bitcoin Core - by upgrading to v0.10 from v0.9 you've also broken
  zeroconf in the same way.
 
 
  Having said that... honestly, zeroconf is pretty broken already. Only
  with pretty heroic measures like connecting to a significant fraction of
  the Bitcoin network at once, as well as connecting to getblocktemplate
  supporting miners to figure out what transactions are being mined, are
  services having any hope of avoiding getting ripped off. For the average
  user their wallets do a terrible job of showing whether or not an
  unconfirmed transaction will go through. For example, Schildbach's
  Bitcoin wallet for Android has no code at all to detect double-spends
  until they get mined, and I've been able to trick it into showing
  completely invalid transactions. In fact, currently Bitcoin XT will
  relay invalid transactions that are doublepsends, and Schildbach's
  wallet displays them as valid, unconfirmed, payments. It's really no
  surprise to me that nearly no-one in the Bitcoin ecosystem accepts
  unconfirmed transactions without some kind of protection that doesn't
  rely on first-seen-safe mempool behavior. For instance, many ATM's these
  days know who their customers are due to AML requirements, so while you
  can deposit Bitcoins and get your funds instantly, the protection for
  the ATM operator is that they can go to the police if you rip them off;
  I've spoken to ATM operators who didn't do this who've lost hundreds or
  even thousands of dollars before giving up on zeroconf.
 
  My big worry with zeroconf is a service like Coinbase or Shapeshift
  coming to rely on it, and then attempting to secure it by gaining
  control of a majority of hashing power. For instance, if Coinbase had
  contracts with 80% of the Bitcoin hashing power to guarantee their
  transactions would get mined, but 20% of the hashing power didn't sign
  up, then the only way to guarantee their

Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

OK, a few things here:

The Bitcoin network was designed (or should be designed) with the requirement 
that it can withstand deliberate double-spend attacks that can come from 
anywhere at any time…and relaxing this assumption without adequately assessing 
the risk (i.e. I’ve never been hacked before so I can assume it’s safe) is 
extremely dangerous at best and just horrid security practice at worst. Your 
users might not thank you for not getting hacked - but they surely will not 
like it when you DO get hacked…and lack a proper recovery plan.

Furthermore, the protocol itself makes no assumptions regarding the intentions 
behind someone signing two conflicting transactions. There are many potential 
use cases where doing so could make a lot of sense. Had the protocol been 
designed along the lines of, say, tendermint…where signing multiple conflicting 
blocks results in loss of one’s funds…then the protocol itself disincentivizes 
the behavior without requiring any sort of altruistic, moralistic assumptions. 
That would also mean we’d need a different mechanism for the use cases that 
things like RBF address.

Thirdly, taken to the extreme, the viewpoint of “signing a conflicting 
transaction is fraud and vandalism” means that if for whatever reason you 
attempt to propagate a transaction and nobody mines it for a very long time, 
you’re not entitled to immediately reclaim those funds…they must remain in 
limbo forever.


- Eric Lombrozo


 On Jun 19, 2015, at 8:11 AM, Peter Todd p...@petertodd.org wrote:
 
 On Fri, Jun 19, 2015 at 03:00:57PM +, justusranv...@riseup.net wrote:
 On 2015-06-19 10:39, Peter Todd wrote:
 
 Yesterday F2Pool, currently the largest pool with 21% of the hashing
 power, enabled full replace-by-fee (RBF) support after discussions
 with
 me. This means that transactions that F2Pool has will be replaced if
 a
 conflicting transaction pays a higher fee. There are no requirements
 for
 the replacement transaction to pay addresses that were paid by the
 previous transaction.
 
 
 Intentional fraud is a bad thing to add to a financial protocol.
 
 A user who creates conflicting transactions, one that pays someone else
 and another which does not pay them, and broadcasts both of them, has
 just self-incriminated themselves by producing prima facie evidence of
 fraud.
 
 Depends.
 
 If you ask me to pay you 1BTC at address A and I create tx1 that pays
 1BTC to A1 and 2BTC of chain to C, what's wrong with me creating tx2
 that still pays 1BTC to A, but now only pays 1.999BTC to C? I'm not
 defrauding you, I'm just reducing the value of my change address to pay
 a higher fee. Similarly if I now need to pay Bob 0.5BTC, I can create
 tx3 paying 1BTC to A, 0.5BTC to B, and 1.498BTC to C.
 
 Yet from the point of view of an external observer they have no idea why
 the transaction outputs reduced in size, nor any way of knowing if fraud
 did or did not occur.
 
 Equally, maybe you tell me Actually, just give me 0.5BTC to cancel out
 that debt, in which case I'm not breaking any contract at all by giving
 you less money than I first promised - the contract has changed.
 
 Again, none of this can or should be observable to anyone other than the
 parties directly involved.
 
 It may be the case that since Bitcoin spans multiple legal jurisdictions
 and can be use anonymously that the victims of such fraud can not rely
 on legal recourse, and it may also be the case that proof of work is how
 Bitcoin deals with the aforementioned factors, but regardless
 un-prosecutable fraud is still fraud and anyone who encourages it should
 be recognied as a bad actors.
 
 Committing vandalism and encouraging fraud to prove a point may be
 something the network can't stop on a technical level, but there's no
 reason not to call it out for what it is.
 
 What do you think of Bitcoin XT then? It relays double-spends, which
 makes it much easier to get double-spends to miners than before. In
 particular you see a lot of zero-fee transactions being replaced by
 fee-paying transactions, relayed through Bitcoin XT nodes and then
 mined. Is that encouraging fraud?
 
 --
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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

On Fri, Jun 19, 2015 at 03:00:57PM +, justusranv...@riseup.net wrote:
 On 2015-06-19 10:39, Peter Todd wrote:
 
  Yesterday F2Pool, currently the largest pool with 21% of the hashing
  power, enabled full replace-by-fee (RBF) support after discussions 
 with
  me. This means that transactions that F2Pool has will be replaced if 
 a
  conflicting transaction pays a higher fee. There are no requirements 
 for
  the replacement transaction to pay addresses that were paid by the
  previous transaction.
 
 
 Intentional fraud is a bad thing to add to a financial protocol.
 
 A user who creates conflicting transactions, one that pays someone else 
 and another which does not pay them, and broadcasts both of them, has 
 just self-incriminated themselves by producing prima facie evidence of 
 fraud.

Depends.

If you ask me to pay you 1BTC at address A and I create tx1 that pays
1BTC to A1 and 2BTC of chain to C, what's wrong with me creating tx2
that still pays 1BTC to A, but now only pays 1.999BTC to C? I'm not
defrauding you, I'm just reducing the value of my change address to pay
a higher fee. Similarly if I now need to pay Bob 0.5BTC, I can create
tx3 paying 1BTC to A, 0.5BTC to B, and 1.498BTC to C.

Yet from the point of view of an external observer they have no idea why
the transaction outputs reduced in size, nor any way of knowing if fraud
did or did not occur.

Equally, maybe you tell me Actually, just give me 0.5BTC to cancel out
that debt, in which case I'm not breaking any contract at all by giving
you less money than I first promised - the contract has changed.

Again, none of this can or should be observable to anyone other than the
parties directly involved.

 It may be the case that since Bitcoin spans multiple legal jurisdictions 
 and can be use anonymously that the victims of such fraud can not rely 
 on legal recourse, and it may also be the case that proof of work is how 
 Bitcoin deals with the aforementioned factors, but regardless 
 un-prosecutable fraud is still fraud and anyone who encourages it should 
 be recognied as a bad actors.
 
 Committing vandalism and encouraging fraud to prove a point may be 
 something the network can't stop on a technical level, but there's no 
 reason not to call it out for what it is.

What do you think of Bitcoin XT then? It relays double-spends, which
makes it much easier to get double-spends to miners than before. In
particular you see a lot of zero-fee transactions being replaced by
fee-paying transactions, relayed through Bitcoin XT nodes and then
mined. Is that encouraging fraud?

-- 
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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee


 Unless you're sybil attacking the network and miners, consuming valuable
 resources and creating systemic risks of failure like we saw with
 Chainalysis, I don't see how you're getting very small double-spend
 probabilities.


So connecting to many nodes just because we can and it's not technically
prevented is bad for the network and creating systemic risks of failure,
but relaying harmful double spend transactions just because you can and
it's not technically prevented, is good for everyone?


 You know, you're creating an interesting bit of game theory here: if I'm
 a miner who doesn't already have a mining contract, why not implement
 full-RBF to force Coinbase to offer me one? One reason might be because
 other miners with such a contract - a majority - are going to be asked
 by Coinbase to reorg you out of the blockchain, but then we have a
 situation where a single entity has control of the blockchain.


If someone did enter into contracts with miners to mine certain
transactions, and had a guarantee that the miners would not build on
previous blocks which included double spends, then they would only need
contracts with 51% of the network anyway. So it wouldn't really matter if
you were a small time miner and wanted to run full-RBF.


 For the good of Bitcoin, and your own company, you'd do well to firmly
 state that under no condition will Coinbase ever enter into mining
 contracts.


I don't personally see what good this does for bitcoin. Now you are
suggesting that we should prevent a 51% attack by using policy and
promises, rather than a technical solution. How is this any better than us
relying on existing double spend rules which are based on policy and
promises?
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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

On Fri, Jun 19, 2015 at 6:44 AM, Peter Todd p...@petertodd.org wrote:

 Having said that... honestly, zeroconf is pretty broken already. Only
 with pretty heroic measures like connecting to a significant fraction of
 the Bitcoin network at once, as well as connecting to getblocktemplate
 supporting miners to figure out what transactions are being mined, are
 services having any hope of avoiding getting ripped off. For the average
 user their wallets do a terrible job of showing whether or not an


This is no excuse for further degrading the overall network security.

There are many issues to address in the bitcoin ecosystem.  It negatively
impacts users to roll out scorched earth replace-by-fee given today's
ecosystem.

Yes, zero conf security is poor.  An outright attack on zero conf degrades
user security even more.

-- 
Jeff Garzik
Bitcoin core developer and open source evangelist
BitPay, Inc.  https://bitpay.com/
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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

-BEGIN PGP SIGNED MESSAGE-
Hash: SHA512

On 2015-06-19 10:39, Peter Todd wrote:

 Yesterday F2Pool, currently the largest pool with 21% of the hashing
 power, enabled full replace-by-fee (RBF) support after discussions 
with
 me. This means that transactions that F2Pool has will be replaced if 
a
 conflicting transaction pays a higher fee. There are no requirements 
for
 the replacement transaction to pay addresses that were paid by the
 previous transaction.


Intentional fraud is a bad thing to add to a financial protocol.

A user who creates conflicting transactions, one that pays someone else 
and another which does not pay them, and broadcasts both of them, has 
just self-incriminated themselves by producing prima facie evidence of 
fraud.

It may be the case that since Bitcoin spans multiple legal jurisdictions 
and can be use anonymously that the victims of such fraud can not rely 
on legal recourse, and it may also be the case that proof of work is how 
Bitcoin deals with the aforementioned factors, but regardless 
un-prosecutable fraud is still fraud and anyone who encourages it should 
be recognied as a bad actors.

Committing vandalism and encouraging fraud to prove a point may be 
something the network can't stop on a technical level, but there's no 
reason not to call it out for what it is.

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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

On Fri, Jun 19, 2015 at 07:30:17AM -0700, Adrian Macneil wrote:
  In that case would you enter into such contracts?
 
 
 We take it as it comes.
 
 Currently, it's perfectly possible to accept zeroconf transactions with
 only a very small chance of double spend. As long as it's only possible to
 double spend a small fraction of the time, it's an acceptable cost to us in
 exchange for being able to provide a fast checkout experience to customers
 and merchants.

Unless you're sybil attacking the network and miners, consuming valuable
resources and creating systemic risks of failure like we saw with
Chainalysis, I don't see how you're getting very small double-spend
probabilities.

You realise how the fact that F2Pool is using full-RBF right now does
strongly suggest that the chances of a double-spend are not only low,
but more importantly, vary greatly? Any small change in relaying policy
or even network conditions creates opportunities to double-spend.

 If the status quo changes, then we will need to investigate alternatives
 (which realistically would include mining contracts, or only accepting
 instant payments from other trusted hosted wallets, which would be a net
 loss for decentralization).

You know, you're creating an interesting bit of game theory here: if I'm
a miner who doesn't already have a mining contract, why not implement
full-RBF to force Coinbase to offer me one? One reason might be because
other miners with such a contract - a majority - are going to be asked
by Coinbase to reorg you out of the blockchain, but then we have a
situation where a single entity has control of the blockchain.

For the good of Bitcoin, and your own company, you'd do well to firmly
state that under no condition will Coinbase ever enter into mining
contracts.

-- 
'peter'[:-1]@petertodd.org
0fe727215265d9ddacb2930ad2d45920b71920b7aed687f1


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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

Great. Thank you for this!

Adrian

On Fri, Jun 19, 2015 at 7:40 AM, Chun Wang 1240...@gmail.com wrote:

 On Fri, Jun 19, 2015 at 10:00 PM, Adrian Macneil adr...@coinbase.com
 wrote:
  However, we do rely pretty heavily on zeroconf transactions for merchant
  processing, so if any significant portion of the mining pools started
  running your unsafe RBF patch, then we would probably need to look into
 this
  as a way to prevent fraud.

 This might be useful to you: https://www.f2pool.com/api/mempool


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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

This is very disappointing.  scorched earth replace-by-fee implemented
first at a pool, without updating wallets and merchants, is very
anti-social and increases the ability to perform Finney attacks and
double-spends.

The community is progressing more towards a safer replace-by-fee model, as
indicated by the following code change:
https://github.com/bitcoin/bitcoin/pull/6176


On Fri, Jun 19, 2015 at 3:39 AM, Peter Todd p...@petertodd.org wrote:

 Yesterday F2Pool, currently the largest pool with 21% of the hashing
 power, enabled full replace-by-fee (RBF) support after discussions with
 me. This means that transactions that F2Pool has will be replaced if a
 conflicting transaction pays a higher fee. There are no requirements for
 the replacement transaction to pay addresses that were paid by the
 previous transaction.


 I'm a user. What does this mean for me?
 ---

 In the short term, very little. Wallet software aimed at average users
 has no ability to reliably detect conditions where an unconfirmed
 transaction may be double-spent by the sender. For example, Schildbach's
 Bitcoin Wallet for Android doesn't even detect double-spends of
 unconfirmed transactions when connected to a RBF or Bitcoin XT nodes
 that propagate them. The least sophisticated double-spend attack
 possibly - simply broadcasting two conflicting transactions at the same
 time - has about 50% probability of success against these wallets.

 Additionally, SPV wallets based on bitcoinj can't even detect invalid
 transactions reliably, instead trusting the full node(s) it is connected
 too over the unauthenticated, unencrypted, P2P protocol to do validation
 for them. For instance due to a unfixed bug¹ Bitcoin XT nodes will relay
 double-spends that spend the output of the conflicting transaction. I've
 personally tested this with Schildbach's Bitcoin Wallet for Android,
 which shows such invalid transactions as standard, unconfirmed,
 transactions.

 Users should continue to assume that unconfirmed transactions could be
 trivially reversed by the sender until the first confirmation. In
 general, only the sender can reverse a transaction, so if you do trust
 the sender feel free to assume an unconfirmed transaction will
 eventually confirm. However, if you do not trust the sender and/or have
 no other recourse if they double-spend you, wait until at least the
 first confirmation before assuming the transaction will go through.

 In the long term, miner support of full RBF has a number of advantages
 to users, allowing you to more efficiently make transactions, paying
 lower fees. However you'll need a wallet supporting these features; none
 exist yet.


 I'm a business. What does this mean for me?
 ---

 If you use your own node to verify transactions, you probably are in a
 similar situation as average users, so again, this means very little to
 you.

 If you use a payment processor/transaction API such as BitPay, Coinbase,
 BlockCypher, etc. you may or may not be accepting unconfirmed
 transactions, and they may or may not be guaranteed by your payment
 processor even if double-spent. If like most merchants you're using the
 API such that confirmations are required prior to accepting orders (e.g.
 taking a meaningful loss such as shipping a product if the tx is
 reversed) nothing changes for you. If not I recommend you contact your
 payment processor.


 I'm a miner. Why should I support replace-by-fee?
 -

 Whether full or first-seen-safe⁵ RBF support (along with
 child-pays-for-parent) is an important step towards a fully functioning
 transaction fee market that doesn't lead to users' transactions getting
 mysteriously stuck, particularly during network flooding
 events/attacks. A better functioning fee market will help reduce
 pressure to increase the blocksize, particularly from the users creating
 the most valuable transactions.

 Full RBF also helps make use of the limited blockchain space more
 efficiently, with up to 90%+ transaction size savings possible in some
 transaction patterns. (e.g. long payment chains⁶) More users in less
 blockchain space will lead to higher overall fees per block.

 Finally as we'll discuss below full RBF prevents a number of serious
 threats to the existing level playing field that miners operate in.


 Why can't we make accepting unconfirmed txs from untrusted people safe?
 ---

 For a decentralized wallet, the situation is pretty bleak. These wallets
 only have a handful of connections to the network, with no way of
 knowing if those connections give an accurate view of what transactions
 miners actually know about.

 The only serious attempt to fix this problem for decentralized wallets
 that has been actually deployed is Andresen/Harding's double-spend
 relaying, implemented in Bitcoin XT. It relays up

Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee


  We have no contracts in place or plans to do this that I am aware of.
 
  However, we do rely pretty heavily on zeroconf transactions for merchant
  processing, so if any significant portion of the mining pools started
  running your unsafe RBF patch, then we would probably need to look into
  this as a way to prevent fraud.

 What happens if the mining pools who are mining double-spends aren't
 doing it delibrately? Sybil attacking pools appears to have been done
 before to get double-spends though, equally there are many other changes
 the reduce the reliability of transaction confirmations. For instance
 the higher demands on bandwidth of a higher blocksize will inevitably
 reduce the syncronicity of mempools, resulting in double-spend
 opportunities. Similarly many proposals to limit mempool size allow
 zeroconf double-spends.

 In that case would you enter into such contracts?


We take it as it comes.

Currently, it's perfectly possible to accept zeroconf transactions with
only a very small chance of double spend. As long as it's only possible to
double spend a small fraction of the time, it's an acceptable cost to us in
exchange for being able to provide a fast checkout experience to customers
and merchants.

If the status quo changes, then we will need to investigate alternatives
(which realistically would include mining contracts, or only accepting
instant payments from other trusted hosted wallets, which would be a net
loss for decentralization).

Long term we would prefer to see an open, decentralized solution, such as
payment channels / green addresses / lightening networks. However, I think
as a community we are a long way away from choosing a standard here and
implementing it across all popular wallet software and merchant processors.

Adrian
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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

On Fri, Jun 19, 2015 at 09:44:08AM -0400, Peter Todd wrote:
 On Fri, Jun 19, 2015 at 09:33:05AM -0400, Stephen Morse wrote:
  It is disappointing that F2Pool would enable full RBF when the safe
  alternative, first-seen-safe RBF, is also available, especially since the
  fees they would gain by supporting full RBF over FSS RBF would likely be
  negligible. Did they consider using FSS RBF instead?
 
 Specifically the following is what I told them:

Incidentally, because someone asked that message was sent two weeks ago.


Also, a shout-out to Marshal Long of FinalHash for his help with
(FSS)-RBF deployment and for getting F2Pool and myself in touch, as well
as his work in talking getting pools on board with BIP66.

-- 
'peter'[:-1]@petertodd.org
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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

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Hash: SHA512

On 2015-06-19 16:36, Matt Whitlock wrote:
 On Friday, 19 June 2015, at 3:53 pm, justusranv...@riseup.net wrote:
 I'd also like to note that prima facie doesn't mean always, it 
 means
 that the default assumption, unless proven otherwise.
 
 Why would you automatically assume fraud by default? Shouldn't the
 null hypothesis be the default? Without any information one way or
 another, you ought to make *no assumption* about the fraudulence or
 non-fraudulence of any given double-spend.

If we have ECDSA proof that an entity intentionally made and publicly 
announced incompatible promises regarding the disposition of particular 
Bitcoins under their control, then why shouldn't that be assumed to be a 
fraud attempt unless shown otherwise?

There are ways of achiving transaction fee adjustment after broadcast 
that do not present the appearance of, or opportunity for, fraud. If 
those options are available and the user chooses not to use them in 
favor of the option that does, that makes bad intentions even more 
probable.

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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Milly Bitcoin

prima facie generally means that in a court case the burden of proof 
shifts from one party to another. For instance, if you have a federal 
trademark registration that is prima fascia evidence of those rights 
even though they could still be challenged.  To say a prosecutor would 
have prima fascia evidence of a crime because double spend was detected 
is quite a stretch.



On 6/19/2015 12:36 PM, Matt Whitlock wrote:
 On Friday, 19 June 2015, at 3:53 pm, justusranv...@riseup.net wrote:
 I'd also like to note that prima facie doesn't mean always, it means
 that the default assumption, unless proven otherwise.
 Why would you automatically assume fraud by default? Shouldn't the null 
 hypothesis be the default? Without any information one way or another, you 
 ought to make *no assumption* about the fraudulence or non-fraudulence of any 
 given double-spend.

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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Matt Whitlock

On Friday, 19 June 2015, at 3:53 pm, justusranv...@riseup.net wrote:
 I'd also like to note that prima facie doesn't mean always, it means
 that the default assumption, unless proven otherwise.

Why would you automatically assume fraud by default? Shouldn't the null 
hypothesis be the default? Without any information one way or another, you 
ought to make *no assumption* about the fraudulence or non-fraudulence of any 
given double-spend.

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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

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Hash: SHA512

On 2015-06-19 16:42, Eric Lombrozo wrote:
 If we want a non-repudiation mechanism in the protocol, we should
 explicitly define one rather than relying on “prima facie”
 assumptions. Otherwise, I would recommend not relying on the existence
 of a signed transaction as proof of intent to pay…

Again, I'm not talking about any changes to the protocol. The mining 
mechanism in the Bitcoin protocol is the fallback method of resolving 
fraud that isn't prevented or resolved via other mechanisms.

There are plenty of other ways economic actors resolve their 
disagreements other than blockchain adjudication. Sometimes when both 
parties are identified and reside in the same legal jurisdiction, 
contract violations and fraud can be adjudicated in courts. In some 
situations, the parties involved may have access to private dispute 
resolution techniques.

Sometimes the stakeholders in the network act to preserve the long term 
value of their investments, even if it means passing short-term profits. 
The more of those stakeholders there are in Bitcoin, the more effective 
it is to make the case for choices that are long-term beneficial.

The degree to which anyone should rely on a signed transaction as 
assurance of future payment is not a question with a universal answer. 
It depends on the particular details of the situation, and the parties 
involved, and their own risk tolerances and time preferences. There's no 
right answer for everyone, which is why let's break zeroconf because 
*I* don't think it's safe enough is a kind of vandalism.
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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

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On 2015-06-19 15:37, Eric Lombrozo wrote:
 OK, a few things here:
 
 The Bitcoin network was designed (or should be designed) with the
 requirement that it can withstand deliberate double-spend attacks that
 can come from anywhere at any time…and relaxing this assumption
 without adequately assessing the risk (i.e. I’ve never been hacked
 before so I can assume it’s safe) is extremely dangerous at best and
 just horrid security practice at worst. Your users might not thank you
 for not getting hacked - but they surely will not like it when you DO
 get hacked…and lack a proper recovery plan.
 
 Furthermore, the protocol itself makes no assumptions regarding the
 intentions behind someone signing two conflicting transactions. There
 are many potential use cases where doing so could make a lot of sense.
 Had the protocol been designed along the lines of, say,
 tendermint…where signing multiple conflicting blocks results in loss
 of one’s funds…then the protocol itself disincentivizes the behavior
 without requiring any sort of altruistic, moralistic assumptions. That
 would also mean we’d need a different mechanism for the use cases that
 things like RBF address.
 
 Thirdly, taken to the extreme, the viewpoint of “signing a conflicting
 transaction is fraud and vandalism” means that if for whatever reason
 you attempt to propagate a transaction and nobody mines it for a very
 long time, you’re not entitled to immediately reclaim those funds…they
 must remain in limbo forever.

I'm not talking about changing the protocol - I'm talking about the 
business relationships between users of Bitcoin.

I would expect a payment processor to inform the merchants of relevant 
double spends that it observes on the network, even if the payment is 
actually successful, so that the merchant can decide for themselves 
whether or not to pursue it out of band.

Mining is a kind of technical fallback that allows the network to 
resolve human misbehavior without human intervention. If nobody ever 
attempted to make a fraudulent payment, we wouldn't need mining at all 
because the signed transaction itself is proof of intention to pay. That 
it exists doesn't suddenly make fraud less fraudulent and mean that 
users who are in a position to pursue out of band recourse shouldn't do 
so.

I agree that there are valid reasons for replacing transactions in the 
mempool, I just think they should be implemented in a way that doesn't 
facilitate fraud.

I'd also like to note that prima facie doesn't mean always, it means 
that the default assumption, unless proven otherwise.

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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

On Fri, Jun 19, 2015 at 09:18:54AM -0700, Adrian Macneil wrote:
 
   So connecting to many nodes just because we can and it's not technically
   prevented is bad for the network and creating systemic risks of failure,
 
  Well it is actually; that's why myself, Wladimir van der Laan, and
  Gregory Maxwell all specifically¹ called Chainalysis's actions a sybil
  attack.
 
  The Bitcoin P2P network is resilliant to failure when the chance of any
  one node going down is uncorrelated with others. For instance if you
  accidentally introduced a bug in your nodes that failed to relay
  transactions/blocks properly, you'd simultaneously be disrupting a large
  portion of the network all at once.
 
 
 This is exactly what your RBF patch is doing. By your own logic, nodes on
 the network should be allowed to relay (or not relay) whatever they wish.

Ah, seems you misunderstand the problem.

By properly we're concerned that things do get relayed, not that they do
not. In particularl with blocks a fairly to relay valid blocks will
quickly lead to a loss of consensus.

  How many nodes is Coinbase connecting too? What software are they
  running? What subnets are they using? In particular, are they all on one
  subnet or multiple?
 
 
 We're running about a dozen nodes running regular Bitcoin Core in various
 subnets. We aren't doing anything particularly out of the ordinary here.
 Nothing that would fall under your definition of a sybil attack or harmful
 to the network.

Right, so those dozen nodes, how many outgoing connections are they
making?

  But of course, you'd never 51% the network right? After all it's not
  possible to guarantee that your miner won't mine double-spends, as there
  is no single consensus definition of which transaction came first, nor
  can there be.
 
  Or do you see things differently? If I'm a small miner should I be
  worried my blocks might be rejected by the majority with hashing power
  contracts because I'm unable to predict which transactions Coinbase
  believes should go in the blockchain?
 
 
 You seem so concerned that we are actively trying to harm or control the
 network. We're simply trying to drive bitcoin adoption by making it easy
 for people to spend their bitcoin with merchants online. The problems we
 face are no different from other merchant processors, or small independent
 merchants accepting online or point-of-sale payments.

 We've historically had relatively little interest in what miners were doing
 (until RBF came out) - for the most part it didn't affect our business.
 However, most large merchants would be simply uninterested in accepting
 bitcoin if we forced their customers to wait 10-60 minutes for their
 payments to confirm. Many have inventory management systems which can not
 even place items on hold that long.

While your goals may be reasonable, again, the question is how are you
going to achieve them? Do you accept that you may be in a position where
you can't guarantee confirmations? Again, what's your plan to deal with
this? For instance, I know Coinbase is contractually obliged to accept
zeroconf payments with at least some of your customers - how strong are
those agreements?

What we're worried about is your plan appears to include nothing
concrete beyond the possibility of getting contracts with hashing power,
maybe even just a majority of hashing power. This is something that
should concern everyone in the Bitcoin ecosystem, and it'd help if you
clearly stated what your intentions are.

-- 
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1128683847671e0ca022f9c74df90a3dc718545379101b72


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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

On Fri, Jun 19, 2015 at 09:42:33AM -0700, Eric Lombrozo wrote:
 If we want a non-repudiation mechanism in the protocol, we should explicitly 
 define one rather than relying on “prima facie” assumptions. Otherwise, I 
 would recommend not relying on the existence of a signed transaction as proof 
 of intent to pay…

Indeed.

For instance, one of the ideas behind my Proofchains work is that you
could hind all details of a smartcontract-whatchamacallit protocol
behind single-use-seals in a consensus blockchain. Closing those seals,
that is spending the appropriate txouts, represents things in the
protocol which are absolutely unobservable to anyone without the data
behind those hashes, an extreme version of the above.


Incidentally, some patent prior-art exposure:

https://github.com/proofchains/python-proofchains

:)

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Re: [Bitcoin-development] improving development model (Re: Concerns Regarding Threats by a Developer to Remove Commit Access from Other Developers

2015-06-19 Thread Milly Bitcoin

 - Did you accept payment from companies to lobby for 20MB blocks? Do 
you consider that something appropriate to publicly disclose if so? Do 
you consider that user rights should come above or below company 
interests in Bitcoin? FWIW on pondering that last question should user 
rights come above or below company interests I think my view of the 
guiding principle is starkly clear to me: that user rights should be the 
primary thing to optimise for. Businesses are providing service to 
users, their interests are secondary in so far as if they are enabled to 
provide better service thats good. Bitcoin is a user p2p currency, with 
a social contract and a strong user ethos. Importing and forcing company 
interests would likely be the start of a slippery slope towards an end 
to Bitcoin.

I always thought is was the exact opposite.  I thought it was expected 
that the only incentive for developers (other than increasing the value 
of coins they hold) is to lobby for changes that will benefit the 
companies that fund them.  That is the only way you are going to get 
more full time developers on board.  It focuses their efforts on  
products and services people want rather than some sort philosophical 
agenda that may be unrealistic.  The notion that large numbers of 
volunteers will do all this work at little or no pay to improve user 
experience is not a realistic long term plan.  I also think it is 
incorrect to assume some kind of social contract and strong user 
ethos.  While many early users are like that I think most potential 
users of Bitcoin don't think that way.

Russ




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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee


  So connecting to many nodes just because we can and it's not technically
  prevented is bad for the network and creating systemic risks of failure,

 Well it is actually; that's why myself, Wladimir van der Laan, and
 Gregory Maxwell all specifically¹ called Chainalysis's actions a sybil
 attack.

 The Bitcoin P2P network is resilliant to failure when the chance of any
 one node going down is uncorrelated with others. For instance if you
 accidentally introduced a bug in your nodes that failed to relay
 transactions/blocks properly, you'd simultaneously be disrupting a large
 portion of the network all at once.


This is exactly what your RBF patch is doing. By your own logic, nodes on
the network should be allowed to relay (or not relay) whatever they wish.


 How many nodes is Coinbase connecting too? What software are they
 running? What subnets are they using? In particular, are they all on one
 subnet or multiple?


We're running about a dozen nodes running regular Bitcoin Core in various
subnets. We aren't doing anything particularly out of the ordinary here.
Nothing that would fall under your definition of a sybil attack or harmful
to the network.

  You know, you're creating an interesting bit of game theory here: if I'm
   a miner who doesn't already have a mining contract, why not implement
   full-RBF to force Coinbase to offer me one? One reason might be because
   other miners with such a contract - a majority - are going to be asked
   by Coinbase to reorg you out of the blockchain, but then we have a
   situation where a single entity has control of the blockchain.
  
 
  If someone did enter into contracts with miners to mine certain
  transactions, and had a guarantee that the miners would not build on
  previous blocks which included double spends, then they would only need
  contracts with 51% of the network anyway. So it wouldn't really matter if
  you were a small time miner and wanted to run full-RBF.

 But of course, you'd never 51% the network right? After all it's not
 possible to guarantee that your miner won't mine double-spends, as there
 is no single consensus definition of which transaction came first, nor
 can there be.

 Or do you see things differently? If I'm a small miner should I be
 worried my blocks might be rejected by the majority with hashing power
 contracts because I'm unable to predict which transactions Coinbase
 believes should go in the blockchain?


You seem so concerned that we are actively trying to harm or control the
network. We're simply trying to drive bitcoin adoption by making it easy
for people to spend their bitcoin with merchants online. The problems we
face are no different from other merchant processors, or small independent
merchants accepting online or point-of-sale payments.

We've historically had relatively little interest in what miners were doing
(until RBF came out) - for the most part it didn't affect our business.
However, most large merchants would be simply uninterested in accepting
bitcoin if we forced their customers to wait 10-60 minutes for their
payments to confirm. Many have inventory management systems which can not
even place items on hold that long.

If full-RBF sees any significant adoption by miners, then it will actively
harm bitcoin adoption by reducing or removing the ability for online or POS
merchants to accept bitcoin payments at all. I do not see a single benefit
to running full-RBF.

FWIW, I'm fine with the first-seen-safe RBF, that seems like a sensible
addition and a good way to allow fees to be added or increased on existing
transactions, without harming existing applications of bitcoin.

Adrian
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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

If we want a non-repudiation mechanism in the protocol, we should explicitly 
define one rather than relying on “prima facie” assumptions. Otherwise, I would 
recommend not relying on the existence of a signed transaction as proof of 
intent to pay…


 On Jun 19, 2015, at 9:36 AM, Matt Whitlock b...@mattwhitlock.name wrote:
 
 On Friday, 19 June 2015, at 3:53 pm, justusranv...@riseup.net wrote:
 I'd also like to note that prima facie doesn't mean always, it means
 that the default assumption, unless proven otherwise.
 
 Why would you automatically assume fraud by default? Shouldn't the null 
 hypothesis be the default? Without any information one way or another, you 
 ought to make *no assumption* about the fraudulence or non-fraudulence of any 
 given double-spend.



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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Matt Whitlock

Even if you could prove intent to pay, this would be almost useless. I can 
sincerely intend to do a lot of things, but this doesn't mean I'll ever 
actually do them.

I am in favor of more zero-confirmation transactions being reversed / 
double-spent. Bitcoin users largely still believe that accepting zero-conf 
transactions is safe, and evidently it's going to take some harsh lessons in 
reality to correct this belief.


On Friday, 19 June 2015, at 9:42 am, Eric Lombrozo wrote:
 If we want a non-repudiation mechanism in the protocol, we should explicitly 
 define one rather than relying on “prima facie” assumptions. Otherwise, I 
 would recommend not relying on the existence of a signed transaction as proof 
 of intent to pay…
 
 
  On Jun 19, 2015, at 9:36 AM, Matt Whitlock b...@mattwhitlock.name wrote:
  
  On Friday, 19 June 2015, at 3:53 pm, justusranv...@riseup.net wrote:
  I'd also like to note that prima facie doesn't mean always, it means
  that the default assumption, unless proven otherwise.
  
  Why would you automatically assume fraud by default? Shouldn't the null 
  hypothesis be the default? Without any information one way or another, you 
  ought to make *no assumption* about the fraudulence or non-fraudulence of 
  any given double-spend.
 

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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

2015-06-19 Thread Tier Nolan

On Fri, Jun 19, 2015 at 5:42 PM, Eric Lombrozo elombr...@gmail.com wrote:

 If we want a non-repudiation mechanism in the protocol, we should
 explicitly define one rather than relying on “prima facie” assumptions.
 Otherwise, I would recommend not relying on the existence of a signed
 transaction as proof of intent to pay…


Outputs could be marked as locked.  If you are performing a zero
confirmation spend, then the recipient could insist that you flag the
output for them as non-reducible.

This reduces privacy since it would be obvious which output was change.  If
both are locked, then the fee can't be increased.

This would be information that miners could ignore though.

Creating the right incentives is hard though.  Blocks could be
discouraged if they have a double spend that is known about for a while
which reduces payment for a locked output.
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[Bitcoin-development] Remove Us Please

2015-06-19 Thread Gigas Gaming Inc.

This is no longer a mailing list, this is a chatroom.
Please remove this email from your list, you are now interfering with 
official company business.

Thanks

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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

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Hash: SHA512

On 2015-06-19 17:50, Jeff Garzik wrote:
 No.  You cannot know which is the 'right' or wrong transaction.  One tx 
 has
 obvious nSequence adjustments, the other - the refund transaction - may 
 not.

I'm still not seeing a case where a node could see conflicting 
transactions on the network as part of a micropayment channel, and not 
know it was observing the resolution of a channel rather than a likely 
retail double spend.

If both transactions have been broadcast, then one of the conflicting 
members of the set will have nSequence adjustments.

Maybe a clever griefer could try to make their retail double spend look 
like a micropayment channel, but it seems like they'd be missing the 
other identifiable markers of that protocol.

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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee

On Fri, Jun 19, 2015 at 9:44 AM, justusranv...@riseup.net wrote:

 If we have ECDSA proof that an entity intentionally made and publicly
 announced incompatible promises regarding the disposition of particular
 Bitcoins under their control, then why shouldn't that be assumed to be a
 fraud attempt unless shown otherwise?


Making multiple incompatible versions of a spend is a -requirement- of
various refund contract protocols.

-- 
Jeff Garzik
Bitcoin core developer and open source evangelist
BitPay, Inc.  https://bitpay.com/
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Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee