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The most important today on bitcoin fungibility is block size. I came into contact with Bitcoin in At that time my goal was simple.
It would potentially be a good asset to keep. At that time, there was a lot of negative press about bitcoin in Chinese social media. So he was going out there to.. He's the one who translate Satoshi's whitepaper into Chinese. He's also the one who presented Bitcoin to the Chinese media until the situation turned around in In the late part of , I started to get into the bitcoin mining aspect of bitcoin.
I was trying to develop the technology and also trying to fathom the economy around that industry. At that time, I was trying to invest in the mining only and I bought shares in a mining company.
I also invested my own money plus investor money to purchase mining machines. Unfortunately at that time, the vendor couldn't deliver. We suffered a great loss from that investment. That experience compares us to getting into the mining industry myself. I found my partners and we started to invest and start to develop mining machines by ourselves because of that bad experience we had.
Back in that time, the mining community has come to the viewpoint that if I can control all the mining hardware in my own hand, then I can benefit most from this control. But this is running against the principle of Bitcoin network. I actually vehemently against that philosophy. We also observe that over the years those mining companies that practiced that, have inevitably failed and floundered because of their bad choices and poor judgement. In the future, we will continue to manufacture the mining machines.
We will only keep a small percentage of the machines for ourselves. In later sessions, I would like to share that data with you to verify that. For myself, I would really would like to see the.. I stay up until 1am or 2am in the morning to debate or to talk with people on social media. I work late nights to make sure everything goes smoothly. Just to realize Satoshi's vision that Bitcoin is a decentralized system that cannot be controlled by a single organization or a single entity or anyone who wants to take control of that system.
It should be a global reserve currency for the whole community to take advantage of. For the latecomers, could you introduce yourselves and also talk about what your current interests are and what you're working on lately. I think everyone knows me. I have been around in Bitcoin for years. So at least five years. He was in high school back then. It is my hope that we can build a similarly strong community for bitcoin.
Also community efforts on sidechains. He's very much one of our community building people at Blockstream. I was working on Bitcoin in I had no understanding of the whitepaper when I first read it.
I took some computer science classes and then realized it was pretty cool. I graduated from school in June. I am working on lightning network. I also do some work on btcd. I am also working on oblivious RAM. What do you each want? Not in terms of technology, but in terms of roadmap for what you want to see in 5 to 10 years. What do people want to see? What's on their wishlist? Gold ran for 6, years or something, and maybe for bitcoin it will make sense in a few centuries.
Let's worry about things that are within our reach in our own lifetimes at least, more achievable goals should be picked. Do they want to aim for market volatility? Whether to bring up legal risk.
Has a risk of this being considered a primary concern. If it was the only concern we had, we would find ways to route around it. There are technical reasons that we could discuss as well, of course.
Like a XOR linked list? I also have projects in encryption like ssh stuff. We have a paper we are submitting in like a few weeks. Computational private information work. So we would like to talk about the mining situation in China. So it's coming up, is it too dark?
Can you guys see in the back? Oh we should turn off the lights. Okay who has control over the vapor machine? I would like to introduce about the miners. Before I came to this meeting, we discussed some concerns from the miners. I should like to share some data.
You can see that we have a full node that can generate a block, they are distributed across the land, in different locations around the world. Antpool is a single pool, but the nodes are distributed around the world. So we have some control over the propagation. We do not necessarily have the advantage over a small pool.
We cannot synchronize to work together because the lightning still travels still spends time, we switch the job we send the jobs to the different miners around the world and that still takes time. We operate globally and do not necessarily have the advantage over a small pool. Bitmain customers, by person. United States takes half of it. And Canada takes another part of it. Germany had the second largest area of sales. Right now it's Canada after US. This is accounted by individual person. Another statistic is by units of machine.
We can see that China takes the majority of it, that's about If we combine these two statistic together, the China customers are more likely to build larger farms. Question, is this by nationality, or is it by shipping destination? It's by nationality by person buying. Are there Americans buying hardware and shipping it to China?
No, it's by shipping address. Chinese miners are more likely to buy on average more large customers. From our experience, it shows that it is typical that American customers buy only one or two units of machine that they put into their own home or basement. Lots of our Chinese customers are large farms like 1 or 2 megawatts.
These are kind of small scale. The large customers are 10 or 20 megawatt. Cost structure for mining farms in US and China. Why is this the way it is? We can see that the capital expenditure per megawatt in China is 50, and in America it is , Time to build, in months, in China is 1, and in America it is 3 to 6 months. America has much lower power cost available near hydropower stations. America will require more time and more CPEX to have a mining farm.
These are mostly infrastructure things. The labor cost is much higher in America. All of the wiring needs to be by licensed individuals. They need to have licenses. If you decide to build a mining farm, in China you could do that in one month. In America, a bunch of that time is spent talking with firefighters, electric company, regulators, you need to show them the places, the designs, make sure they are okay with the designs, they need to check everything, and they need to change this change that and that's another safety law.
It's a very slow process. In China, it's very fast. You can build things very quickly. Regulation is very loose. You have very little to deal with. From a capital perspective and time perspective, mining farms in America are very expensive to build. The amount of time in America influences the decision of course. And the power cost in China is not as good as America because you have more hydropower stations. You have 2 cents or 1. In Canada too, it's cheaper power.
The low price is not available in China. In China, there's a oligopoly of.. If you want to make deal with a power company directly, it's against the rules. You need to spend resources and energy and relationships and these things on trying to get the - to travel with them - so basically in China the lowest cost of power is not as good as in America.
To summarize, in America, if you do a short-term business where you want to get your investment back very fast, it's not as good as China. Difficulty is rising fast. We know the reason why China miners are more likely to launch many farms. I can summarize this as because in the past few years, the risk involved in a mining investment are high. Miners do not like the difficulty going very high very fast.
We can see in the past few years, this is a good time in January where the mining difficulty was not moving. There was a big shot around January Miners also do not like the price of bitcoin going down. We can see since the ASICs came, January ASICs were delivered around them. Friedcat started doing their own mining farm. So we can start that graph around that. January was a bad time as well for the market price for mining. Inside the miners community,..
What's the reason behind this? The market is not controlled by miners. The technology is improving very fast. Bitcoin experienced technology improvement journey of 13 year semiconductor technology in about 3 years. So about 20x technology improvement. You need a war. The smaller the process node, the harder it is to improve. We improved the power efficiency of the semiconductor. You have a lower capex and OPEX when jumping to the lower resolution. Yes we're hitting a wall.
You can have a lower power cost, but the cost to fabricate the wafer increased. Maybe you have to increase the cost to make a single transistor to improve your power efficiency.
The mining technology improvement have somehow just uh well slow that pace. It's kind of good news actually to mining rig investors because older generation miners hate the new generation.
So the new generation will now come at a slow pace compared to before. The improvement of mining technology will have to wait the improvement of semiconductor technology. Moore's law is hitting the wall. As stable as the U. It will have some up and down, but generally it is stable. People are more likely to accept it as a reserve currency or to put it inside their savings inside the bitcoin network.
So this will be good news for bitcoin. I think there's a potential that the mining will shift to Western because regulation, the legal system and the power cost, this kind of long-term if we consider things from another perspective, in America there's lots of advantage over China. Even in Europe, we can find lots of cheaper; and lots of stable ecosystem. From another perspective, mining will have an edge in the Western world. People are waiting to invest in mining. Bitcoin hashrate tends to be more decentralized or more widespread when there's a more even state.
It depends on how the economic and how the market for Bitcoin mining evolves in the next few years. You mentioned how much of Antpool's hashrate is bitmain?
How much is the hashnest service? Hashnest does not have a physical hashrate. It's actually separated, the hashrate. Is it that shipped hardware, or does Bitmain own it and operated by someone else? Our own hosting, our own mining operation with our customers and so on. We discourage them from putting their mining rigs inside our mining farms. You had a picture of where your hashrate is on which of your nodes. I wanted to ask if you could speak to the infrastructure around that.
Is that all owned and operated by you in China? Is it operated by other individuals who aren't necessarily able to censor transactions? They are under Bitmain's control. We rented servers from Amazon. Antpool servers will connect to the US antpool server. European customers connect to the European Antpool server. You would collect the revenue, but you would have separate people in separate regions have the keys to the servers so that one agency wouldn't be able to target.
Frankly I have never thought about this. From the beginning of the business,.. They don't have to us a third-party pool like Antpool. They will be able to build their own mining pool. From the development side, we want to make tools to make that much more easy. We have had some difficulty because consumer adoption of mining hardware has gone down. There does not seem to be as much interest in people deploying their own mining equipment. It's hard to develop software without interaction with users.
We need the users so that we can build the software to make it easier to have users in the first place. Yeah, it sounds great, if there's anything that we can do to help, we would be happy to help with that effort. I want to add a point here that we need Bitcoin community I think we need to have a welcome that is kind of mining farm thing.
For example, in China actually, 3k half-megawatt each. There will be thousands of these. We need some conferences to invite the power companies, miners, local governance, and try to promote the mining farm building services.
Just building the mining houses, it's a real actual company. If we can do this in America, then if we were to have a long-term business plan, you could have an advantage to China.
Mining pools are a centralizing factor, but as long as we start to open-source our infrastructure, I think it will become easier for others to build a mining pool. The existing mining software, I get lots of complaints from some other open-source mining pool, it sucks.
It's very difficult right now to setup the existing mining pool software. Only a small number of experts can figure it out. It needs to improve. There's also some tech that we know how to build but haven't built yet, which would allow you to pool your income without pooling your transaction selection. P2pool is an example of this but not a good example. It's not a good pool. There is tech that could be developed here where users can pool their income but keep transaction selection decentralized.
The mining pools have to join together to share their income. It also increases the performance of the network because, right now all the pools are buckling against the other ones, it's creating a lot of orphans. Because they have like Bitcoin protocol is not so efficient from the block propagation They were not propagating because of internal software performance issues. We could also create a how-to for installing pools. Why do users not do it? There is no reason to install a pool if you only have a couple gigahashes.
You should have at least like petahashes to be really efficient. If you combine a lot of users, and if it doesn't hit the, then it negatively impacts bitcoin because many users are just following this simple "How to install a pool" and they might do that for a few terahashes, there will be less profit and very high risk and they cannot provide the sources.
At the moment there are only a couple of people that can configure the mining pool. It's a bare quality for end user. It creates a liability though for the system. I think we can fix this going forward.
Combining the pools, I think it's the next logical step. Instead of battling one against the other one, it should be some next step in the software development. Then the old pools will work together without any point of failure and without weakness from attacks, and the pay-per-share and so on, will provide you just payout. It will be logical.
I think it will maybe not.. Am I understanding you correctly that it's possible for pools to not be concerned about orphan loss in the future? It's a question about the efficiency. ASIC development growth, it's a question about improving the bitcoin network.
If you can optimize your data center and reduce the electricity consumption, it means the transactions are cheaper for end customer. It's decreasing power consumption and it's also increasing the price of your transaction, and ASIC increasing the price more, and increasing ASIC efficiency decreases the price per transaction.
Making it as much cheaper as possible. But the miner power also creates protection barrier for asset, for bitcoin or for any coin what you are using inside the blockchain. If hashrate is higher, it's very hard to attack the coin or asset inside the blockchain. Additionally, you can just note take in line the cost of the bitcoin, you can also lower the bitcoin with an additional cost, like with a smart contract, the share inside the bitcoin, so it's the price of a bitcoin plus the shares of the company.
It's more high cost the asset. Hashrate should go up. We're definitely reaching technological limits for now. Selling the containers, selling the warmers for homes, like warming for water or something. In Ukraine, our partners, we have already designed a miner that works like a heater for a house.
It's just warming the water. It's consuming the same amount of electricity and creates warm water. The question is only, if you are using a very small cheap and you're distributing them, they become inefficient. There's no possibility to install right now just one gigahash in a diesel router. The efficiency of the one million chips, not in one single miner, but distributed across the world, will be less efficient because of the delay in communication.
After the halving, the difficulty went down since then by a little bit. Do you have any insight into whether a disproportionate amount are shutting it off geographically?
It's still profitable to run it even in some high power cost areas. Recently I think the shutdown is related to specific issues and power companies. Mining rigs were having trouble with their power companies. This drop is unrelated to the halving. I was surprised by the decline in hashrate. So it sounds like it's unrelated, a local supply issue. In China, hydropower is very cheap right now because it's summer.
In october, when winter is coming, some mining farms have to be closed. The mining farms will be moved during those periods. Some people are stealing electricity. You were talking about installations in homes. High nm were cheap to install and more efficient as a heating element.
Perhaps you won't get high hashrate from that because they are less efficient as miners? It's a different economical reason to install them. Instead of buying just a heater, which will cost you almost the same money, but doesn't provide any return, the mining agreement will provide you economic return. But it's not logical and not efficient. If you install miners into TV sets or something.
But for warming, warm air, warm water, then the miner is almost the same efficiency in terms of condition. Why is it not exactly? But right now the growup of the difficulty is so fast that if you buy it, you will not be able to get a return to cover the price, because of the growth in difficulty. When it reaches a maximum point like 10 nm or 9 nm chips, then it will be more linear and then the home users can buy it and they can be sure that in 2 or 3 months they will get their investment paid back, plus some benefits and some investment from bitcoin.
The bitcoin price is lower than it should be right now, it will grow up, it should approximately happen when mixing the maximal point of the technology, so then price should go up and then over a k, and this create an interest in all the public to invest more in the bitcoin. As soon as the development of bitcoin mining chip catches up with mainstream general purpose CPU, we will see a slowdown in growth and thus the chip lifetime will grow and this will make it viable for consumers to have them.
I agree with this. It makes the investment less risky. However, on the other side, I think that if the growth of technology itself slows down, I expect the profit margin of mining to go down as well so that you can plan ahead and do better analysis and probably the competition would be higher so the profit margins might go down.
This will also depend on bitcoin exchange rate. For competitive mining sure, but for compliance mining perhaps it would be different. Cost of supply would get close to the cost of production, more efficient. The adoption of the bitcoin is growing over time. The price of the bitcoin will be also growing up. As result, this is increasing the profit and making the compensation. I think it's a dangerous assumption that the market price will go up or do anything in particular.
You sort of assume that mining hardware ends up at the same state of the art as general purpose CPU. I don't know whether that is the case. In particular, if you could build a mining chip that gives a completely wrong result of the time but is 2x as efficient, that would be awesome to have for mining but it's unacceptable for general purpose for CPU. I think that once the tech catches up, they might find that for mining ASICs, they will find that a different design is interesting for other purpose.
Can we stop here so that we don't lose the audience. When we think in terms of PoW security, if you want to attack the network, you can do many types of attacks. There are less expensive attacks to worry about. Some of them will be faster than ASIC fabrication.
In the future if we have a lot of latent hashrate turned off, and if it's vulnerable, then we have a situation where someone can turn on the hashrate as a hashrate attack. This is particularly concerning when you have a lot of latent hashrate. One other thing that we can talk about later is block withholding. It can be fixed with a soft-fork, actually.
One of the things that I hope to do here is to hear this from other people as well. I think we share common vision about what the future is for the bitcoin system and currency. Like all of us, I want to see the usage grow and see it penetrate every corner and aspect of the world.
It will take time for this to happen. If everyone was to awake tomorrow and know that bitcoin will be the world reserve currency, there will probably be war. There will be fights over mining farms, even. It is good for all of us in the room that Bitcoin grows at a steady pace and that the world has a chance to adapt to this system and for ownership of bitcoin to be well-dispersed and very wide-spread so that everyone can participate in a system that is seen and received and is fair to everyone in the world.
The technology that is possible in the protocols on the network, we're looking at things today that are much more powerful than we have already deployed. We know that many things are possible in the future that end users, if you think about the further out technology, like zero-knowledge proofs for synchronizing the blockchain. We know there are tech improvements that are possible, but it will take time to get to them.
During that time, we need to advance the system, get more adoption, dive into more use cases, and keep track of the long-term advantages of bitcoin that make it valuable to everyone, that is permissionless, that it is open, worldwide, and to keep this at the forefront of the system.
To get here, we might have to cooperate and work together harmoniously rather than in dire competition. There are many people outside in the wider world that don't use cryptocurrency-- that's the competition. We should be focusing our energies. We should be collaborating to make bitcoin successful there. It's possible for interesting systems to become popular, but less important over time. There was an example. Everyone heard about paypal.
It started as a bearer electronic cash system on palm pilot, a PDA before smartphones. People who were doing it thought that electronic bearer cash was very interesting.
Paypal became centralized and had the same problems as banks. It became big and controlled by corporate interests. It became the thing it was trying to displace. One potential outcome for bitcoin is for bitcoin exchanges to become banks or bought by banks or incorporated into banks. I am not accusing of anyone. It's just how human evolution happens in previous systems. They could become stock market listed, bought by banks, and the permissionless properties might be eroded. For some people, that would be uninteresting.
But perhaps someone would try to work on an alternative because Bitcoin would have degraded in quality, just like paypal is being replaced in a few ways. So we just have to avoid that failure, and maybe bitcoin in 5 years could have, I don't know, a nice positive outcome would be the same amount of distribution and value as gold or something.
I would also point out that in that kind of evolution to something more centralized, it would be easy for Bitcoin to change into something where mining is not needed. In ethereum, they intend to switch to something where PoW is no longer going to be required.
In a centralized system, PoS is going to work. If you have a central authority that can decide between different systems, it will probably look like it works. If Ethereum switched to then, then why would you need all the environmentally wasteful work? Why not use the system that ethereum is using? It would be much less interesting even if you did switch. In that outcome, the miners wouldn't exist. It probably isn't going to happen in the next few years. I would much rather have a system that is interesting and secure.
It's easy to make centralized systems. The trend is probably going to go towards that if people don't care. The more centralized the system, the better it will seem to work. There's also the risk of boiling the frog.
I think we have been boiled already. Centralized systems are always going to exist. We should recognize that if we build a system that is getting closer to those alternatives, without providing major differentiation, then we could lose the competition because we wouldn't be providing something unique.
Whereas if we make sure that we can maintain our core values, then we can continue precisely because we continue to provide something unique. A wild Bobmon has appeared in the room. It's very important to capture this pokemon. We can't mention the name, of course. It was a pikachu, if we can relax the CHF rules. There is a transcript projected on the screen. Really just the greatest person ever. We don't have to discuss this but we all go to different meetings, and perhaps from Scaling Bitcoin or elsewhere there might be some information that would be good to share.
There are talks from Scaling Bitcoin that we will add as links to the transcripts or email that around. If there is nothing to talk about regarding prior events and conferences, then we can talk about lessons we could gather from the Ethereum hard-fork. Who would like to start on that? It's a broad topic. Who was surprised by this situation? Surprised by TheDAO situation? Surprised by the hard-fork? The fact that it had a bug?
That people suggested a hard-fork for it? That the hard-fork went through? I was surprised that they did not have an improvement proposal for it. They just did a hard fork without writing it up. I would suggest that the DAO might not be that topical. There are lessons there because we are also talking about different types of forks.
There are forks, replays, things like that, The DAO might not be as relevant. There is the possibility or the fact that they are exploring new possible scripting languages for bitcoin. There have been arguments that if the DAO code had been more auditable or more provable, the specific recursive construction in the ethereum VM was reviewed and a warning was given regarding sandbox escapes and code that is hard to reason about.
If I criticize everything, then I will be right about everything that fails People warned specifically about this. I will provide a short summary about this. They are creating the technology in the way that they would like it to exist into the future. If each morning you wake up and the rules are changed, then you are changing the game.
They start to use the technology and there are a couple of points in the timelines. First, it's a smart contract by itself. With Solidity, it is definitely not the choice. It should be improved. If it's changing anything in Solidity, it's changing all the rules in ethereum and changing all the rules inside the smart contracts in ethereum.
If you're designing this smart contract today, it doesn't mean that tomorrow it will be able to work. If you change something in Solidity it might stop working and there is not continuous support of the same system. A second point that should be marked is that it's changing proof-of-work to proof-of-stake. So first of all the issue about PoW is that it's created like a temporary and it's by design created by working on limited amount of time. The issue which PoW the more transaction you get, the more complex the hashes you construct, more memory for GPU cards, at the same moment there will not be enough memory for the GPU card to generate PoW.
Once, we have already reached that limit. So the hashrate generation requiring for GB of memory, then at one moment all of those GPU cards stop working and stop generating PoW. It was a software limitation. You can update and continue proof of work. Changing from proof of work to proof of stake changes the economics of the system, all the rules change and it will impact everything.
The next point, the construction of ethereum, it's built for rolling out to getting the current point of a blockchain should possess all the smart contracts. And smart contracts using solidity, it's consuming a lot of CPU power. If you get a lot of smart contracts, if the blockchain would be bigger, you would not be able to download the blockchain and synchronize new nodes. It requires a lot of CPU power. And during the time, if smart contracts would be bigger, than a regular node would not be able to process all the smart contracts.
At this point you should somehow also perform hard-fork, and split the network. Each point is practically creating the pandora's box. If it doesn't solve it, it's basically the death of ethereum. If you solve them, meaning the hard-fork, it's meaning change of rules of the whole system, and the user will be All the users already decide to use ethereum, they will be impacted and lose trust at this point.
As you go forward in time the more users you will lose. Ethereum is too young to brave this,.. They are not thinking about the users because they are testing the network as they go and modifying the rules. And also rolling back the transactions if it's money is quite risky.
Is it fraud transaction or not? It's also changing a lot of rules and also impacting the users and creating a dissatisfaction for the users.
Some users will not be satisfied. I was surprised about the Ethereum process that there wasn't a document. They have their own BIPs, and they didn't use it. A separate issue with this is that their response time to the issue seemed slow to me. I don't quite understand why. When there were network incidents in the Bitcoin network in the past, I think that the response time of the Bitcoin community was much faster. I saw basically no response from the Ethereum technical community other than telling exchanges to stop trading.
For days after, funds were being drained out of The DAO and they had not given patches to the miners to block the transactions. Why didn't they reorg in the first hour? There were some simple things that they could have done. There were some things that they could have done well. I think they took wrong action. But they did take action.
Credit where credit is due. Their hard-fork was bilateral, meaning that the new hard-fork chain would reject blocks created by Ethereum Classic, and Ethereum Classic would of course reject blocks from the new chain. The prior hard-fork proposals for bitcoin like , , , none of those were bilateral hard-forks.
What this means is that if Ethereum Classic gets more total work than Ethereum, which to the market looks like it could possibly happen, it will not reorg. You will not have Ethereum Classic get more work and then the ethereum other chain gets erased. This is because of the bilateral fork. If they did a fork like the BIP fork, and you had a situation where the classic chain got more work than the other chain, then it would have erased the chain history from the other one.
Presumably they would have made a fork to erase the history and bring it back. It was probably easier for them to do it this way, but they did it well.
The replay situation I think is quite interesting and has a parallel in Bitcoin. A year and a half ago, there was a discussion in the bitcoin-dev chat channel when Gavin and Hearn were talking about their fork proposals. Some people began to discuss how to do replay prevention between forks of bitcoin. This made Gavin mad because he rejected the idea that another chain would exist at all after the fork. We had an extensive discussion about replay. I think we did that better than Ethereum because bitcoin has less replay risk, inherently.
In bitcoin, we would not have as many replay problems if we had a fork like this. In addition to this, this was something we were thinking about when we started to think about hard-forks in Bitcoin. The UTXO model would be why we would be better off. Ethereum has accounts, instead. So the anti-replay counter is more inherent. If you make a transaction you can spend them equally if they were in the same accounts.
If bitcoin forked like ethereum did, there would be some replay. You could change things in the transaction format in the hard-fork, and other tricks to reduce the chance of replay. Ethereum developers knew about replay.
They in fact apparently had a conversation with coinbase about replay before the hard-fork and their position was that there would not be two surviving chains so don't worry about replay. So I think the failure mode was a lack of sufficient paranoia, being overly confident, many things I think we do in Bitcoin we over-engineer a little bit but this over-engineering is for a good thing because we can't predict all the failure modes.
But for example, replay is still not fixed in Ethereum world even though it is causing many problems. I am sure it will get fixed in some numbers of weeks or months. Replay could even be an attack against another chain, so some users might consider it a good thing. It's only a good thing if the other chain actually dies. One point I would like to make, as an interesting thought experiment, is that it's important to make replay protection to allow prior transactions before the fork.
There was discussion to change the transaction type to allow for prior transaction types. Particularly in bitcoin you need to do that. One challenge is that in bitcoin you might have locktime transactions that are pre-signed and we don't want to invalidate. Some Bitcoin ATM vendors have some timelocked coins and they can recover those in the event of the ATM being stolen, but they can't do this in another way.
So the interesting wrinkle in this is that if you have nlocktime transactions, if there is a hard-fork construction that allows for a new transaction type, and it allows priors, then the hard-fork transaction format would not be replayable. Well, there was a suggestion in that earlier discussion, to prevent replay without any need to change any transaction formats but it was somewhat complicated.
Did it require nested or something like that? You would require miners to start producing 0-value TXouts that anyone could spend. And then transactions would pick those up and spend them. This is a lot of code. You don't have to require them, they could do this voluntarily. Well, it's complicated, it would work, and doesn't have those downsides.
When we had those discussions and realized it was complicated, we realized how much work it would be. It's easy to do this as a soft-fork with for instance a signature hashing flag that says that there should be on the stack a previous block hash that is earlier than today minus blocks which would be equivalent to that other proposal, with zero-value outputs. The challenge we had with that is that the only people who were interesting in solving that problem at the time were the people who were not interested in hard-fork arguments at the time.
We talked through some of this, but Gavin was really angry that we were talking about that, he saw that as an effort to undermine a hard-fork, but it wasn't. Seems like we have not translated in a while. They are reading this transcript, live. I would be curious to hear their perspectives on any of that discussion. Whether the minority chain should be allowed to exist or not. We see that in Etherium Vitalk said that it is good with two-chains coexisting.
But some of it might think that the minority chain should not exist at all. At least with the obvious way to do it with a soft-fork. At worst, you could end up with legal problems.
Me personally, I would be dubious about participating in a forced fork like that. We should distinguish between should exist and should be prevented. It is bad in etherium that the other chain exists, but that doesn't mean The challenge with this point is that, in the case of ethereum, it's not just that they moved which was a problem too, the go-ethereum client would not synchronize a shorter chain even if it's the only one with valid blocks.
Ethereum Classic had to blacklist the hard-fork block immediately. Ethereum Classic also forked at that point. It was a soft-fork, though. If you start a pre-fork Ethereum client, when only happened to connect to Classic nodes, it wouldn't know at all. It's a complex set of variables for that scenario. You can't count on retarget to [ You're in a position where it's less likely than ethereum, for people to start making trades and creating a viable currency.
One thing that we learned is that there's a large economic incentive for traders to encourage the splitting of assets. Traders have made money on the volatility, as well. If nothing else occurs, an incident like this is an opportunity for exchanges and traders to potentially make a lot of money.
If they need to take some actions to make that outcome occur, thy might do so, even if the market cap of the currency goes down. Ethereum currency holders lost out on this, but the exchanges and traders made some money, although not universally. BTC-E and Coinbase are probably not doing so great, although others might have better outcomes so far. It might be easy to get into a situation where you can do an anti-replay mechanism. One exchange might be in a situation where they lose a ton of money if the fork has value.
Who is responsible for the lack of care that led to this situation? Is it the exchange's faults who didn't protect from replay? Is it the developer's fault for not foreseeing this as a problem? I think that in this case, because it is designed mostly by ethereum team, it's not like open-source, they might have liability because I think legally ethereum more look like a commercial project because they are selling a piece like a commercial company.
So technically for a lawyer, it's a commercial project all open source is commercial. The specific economics around ethereum, like the pre-mine, maybe makes a stronger argument there. I think we are learning as we go, but I have noticed that only the native English speakers are talking.
I would encourage everyone if you want to say something, please jump in and make yourself heard. Or if you feel like people are going too quickly, ask them to pause and stop. In such a fork, in bitcoin, if that happens, lots of bitcoin miners will start to protect the viability of the majority chain. They will volunteer to attack the minority chain.
So one of the interesting things in Ethereum is that immediately after the hard fork occurred they declared the other side the loser, but both sides did that. And they might start taking legal action against anyone here. I would never do that with my name attached. Pretty good chance that I would end up in jail for that. We would all be liable to some extent. Maybe if you mine an empty block, on that chain, then basically it has no value. Otherwise they will compete against each other long-term for value.