Topic: A simple bitcoin Q/A. Learn new and interesting stuff about bitcoin. - page 10. (Read 27372 times)

https://en.bitcoin.it/wiki/Bitcoind
https://en.bitcoin.it/wiki/Bitcoin_Core

bitcoind is a program that implements the Bitcoin protocol for remote procedure call (RPC) use. It is also the second Bitcoin client in the network's history. It is available under the MIT license in 32-bit and 64-bit versions for Windows, GNU/Linux-based OSes, and Mac OS X.

As part of Bitcoin Core, bitcoind has been bundled with the original client from version 0.2.6 to 0.4.9, and with Bitcoin-Qt since 0.5.0.

Bitcoind is a headless daemon, and also bundles a testing tool for the same daemon. It provides a JSON-RPC interface, allowing it to be controlled locally or remotely which makes it useful for integration with other software or in larger payment systems.

bitcoind is a multithreaded C++ program. It is designed to be portable across Windows, Mac, and Linux systems. The multithreaded aspect leads to some complexity and the use of certain code patterns to deal with concurrency that may be unfamiliar to many programmers. Also, the code is aggressive in the use of C++ constructs, so it will help to be fluent with map, multimap, set, string, vector, iostream, and templates. As is typical of a C++ program, a lot of code tends to end up in the header files so be sure to search both the .cpp and .h files when looking for a function

The client is capable several major operations
Initialization and Startup,Node Discovery,Node Connectivity,Sockets and Messages,Block Exchange,Transaction Exchange,Wallet Services,RPC Interface,User Interface


Sorry, Till above I just copied the wiki, I do not want to rephrase and paraphase because the above information is very cleary written and very understandable.

My understading and confusion: Bitcoind is one of the 2 variation  original bitcoin program available and a 'headless' version.  I assume it is written by Satoshi as he used to be cheif developer 0.3.19 but what used to be first client and what shortcomings/enhancement is in bitcoind from the first client.

https://en.bitcoin.it/wiki/Original_Bitcoin_client

Phew! Finally evaluated the answers and gave merits to a few deserving posts.

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Joel,did you find the answer you were looking for? So that you could merit any one who deserves it.

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Question: Give a short summary on bitcoind.

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A tiny bump.

Each block is stacked on top of the previous one. Adding another block to the top makes all lower blocks more difficult to remove: there is more "weight" above each block. A transaction in a block 6 blocks deep (6 confirmations) will be very difficult to remove.After a transaction is broadcast to the Bitcoin network, it may be included in a block that is published to the network. When that happens it is said that the transaction has been mined at a depth of 1 block. With each subsequent block that is found, the number of blocks deep is increased by one. To be secure against double spending, a transaction should not be considered as confirmed until it is a certain number of blocks deep.Note that unconfirmed transactions do not expire. Just wait until the transaction be confirmed. For my experience 10 minutes is enough for the transaction to be confirmed.

I'm so sleepy right now to make sure my answer is accurate but here I go:
Double spend is to spend the same coins in 2 different transactions. It's mostly attempted when the 1st transaction doesn't have any confirmations yet, because it becomes much harder to successfully do a double spend after each confirmation.
Double spend is usually attempted when someone makes a transaction by mistake, when a transaction gets stuck because of a low fee, or of course for fraud.
There are several ways to attempt a double spend, what I know of them:
Including a higher fee in the 2nd transaction (the one you want to get it confirmed faster), asking a miner to include your transaction in the next block, these two methods work for unconfirmed transactions.
Double spend can also happen in 51% attacks or similar attacks where the attacker has high hash power. In this case the 1st transaction could have a couple of confirmations and still get reversed. Though this kind of double spend is not worth it unless the amount of transaction is so high.

Correct or wrong answer I'd be happy to receive feedback 

If ever satoshi reveals himself and thank satoshi that i became millionaire or more for example. I would travel and meet satoshi personally just to greet and thank satoshi for what he's done to those who became millionaires around the world. To make the world a better place i would start a campaign about cryptocurrency that will promote bitcoin and share it to those who don't know about cryptocurrencies but of course i won't teach directly on what to do to earn from bitcoin. I would start a program first that will help those who doesn't know what is cryptocurrency?, what are the cryptocurrencies? and so on.

Correct me if i'm wrong. Compliments are accepted, opinions, advice and others you want to share to me.

Although this question could have been answered better, this the best that has been posted thus far. Enjoy the merit.

With that said, I think the question is a bit dated now. Not many exchanges require 6 confirmations these days, and theoretically, it’s almost impossible with the amount of hashing power spread across miners for the possibility of a 51% attack to be conducted successfully. One hasn’t happened yet, and it’s theoretically improbable. But that doesn’t mean that you should ever, I repeat ever, treat an unconfirmed transaction the way you would one with a couple confirmations.

Question: What does double spend mean?

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Welcome Joel_Jantsen. Sure,you can ask questions,so long it helps in increasing user's existing knowledge. Feel free to ask some more.

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To everyone who has answered in this thread: I haven't updated the answers for a couple of questions,moderation of unwanted messages is still left but give me a couple of days(probably) to sort things out. You shall receive your merit if you answer correctly according to the question and you also follow the rules. Failure to do so,would result you not to receive any merits.

Hi pugman and bill gator! Thanks for this thread. I hope I can read every answer and quote here so I can also learn. While reading this thread, I thought that there are lots (as in lots and lots) of things i don't really know about bitcoin. At first, I only thought of how to acquire activities so I can rank higher ('cause higher ranks mean higher stakes and token for bounties), join as many bounties as possible to have stakes and tokens so I could sell them and have money.

But since the merit system was implemented, I learn to control myself in posting (though it's not shitposting for me) and read articles in google to provide quality posts. I also learned to read threads that are very informative and look into other threads that are interesting. However, obtaining merits became hard for me. I hope I can research and answer well to be worthy of those sMerits of yours! Good luck to me!

I will add that probability of reversing the transaction drop off exponentially with each confirmation. So it is always dependent on amount of transaction vs confirmation . If the amount of transaction  is more than cost of reversing the transaction of 6 confirmation then merchant will wait for more confirmation.

wow well now this is technical. Yeah you are right and actually i was about to mention the block-weight but since i considered answering from a normal business user who want to estimate an average fee before sending. Otherwise you answered perfectly! I did not know many things you highlighted. Thank you.

Regarding bitcoinfees.earn.com vs coinb.in i guess it's showing the lowest fee to get it into the next few blocks where bitcoinfees.earn.com is estimating the fastest.  Also i guess difference of calculating based on last 24h vs last recent block transaction giving different results.

You did not go technical at all. Fees are now calculated using block weight, or vBytes (virtual bytes) with the recent Segwit upgrade. P2SH-P2WPKH address (SegWit nested in P2SH address) transactions are often larger in raw bytes than normal transactions, but have a lower fee because of block weight. The 1 MB block size limit has been replaced with block weight of 4 MB. Normal transaction data counts as 4 times their actual size (100 bytes of normal data would have a weight of 400 bytes), and SegWit data is treated as their normal size. This does not cut the fee in half like you claim, and the savings increase the more complicated (more inputs and outputs) the transaction gets.

The median transaction has 1 input and 2 outputs, and it is certainly not the average. 226 bytes is only true when Compressed Legacy (legacy, meaning addresses that begin with "1") sends to a Legacy address. If the input is Segwit or not compressed, it has a different size, being approximately 258 bytes and 168 vBytes (249 real) respectively. An output that is bech32 saves an additional 3 bytes, and for reasons I'm unaware of, it appears that sending to P2SH-P2WPKH has the same 3 byte savings.

Please stop recommending bitcoinfees.earn.com, it overestimates fees quite significantly. It was recommending 100 satoshis/byte a few days ago when 5 sat/byte were getting in the same block. Currently it suggests 20 sat/byte, while Coinb.in suggests 4 sat/byte, and if you look at the mempool, only 0.28 MB of transactions are paying a fee of 5 sat/byte or higher. Paying 20 sat/byte would just be plain stupid right now, and you would have literally no reason to do so. The best way in my opinion is to check out Jochen's mempool stats in combination with Coinb.in to determine the optimal fee to use. Based on the current stats, I'd have to agree that 4 sat/byte is the cheapest, and will get you confirmed in the next block.

Most wallets will either let you pick a satoshi/byte fee, or a fixed amount, and tell you the size of the transaction. This lets you get the correct size, and in turn, the correct fee. I'd argue that most transactions are not 226 bytes any more, with the introduction of SegWit, and from getting many (smaller) inputs. This is more true the higher your transaction value is.

For an actual technical post, I would have expected vBytes to be at the very least mentioned, maybe block weight, and definitely more in depth info on transaction sizes.


Electrum was asking people to overpay just like BitcoinFees.earn.com a few weeks ago. It currently suggests 18 sat/byte for next block on version 3.0.6, which is at least 2 times more than you need. RBF helps if you pay a low fee, but does not prevent you from overpaying.

A one liner answer may be , just use electrum wallet and you should be fine as it has both rbf and cpfp option . In case you need more info, use this website : bitcoinfees.earn.com . With electrum, you can preview size and tx fee too .

Wow that is one tricky question.. i will give it a try:

Since we know fee are calculated per byte. So lesser bytes mean lower fee. That's how miners calculate!

I presume your question is from the consumer (sender) prospective. If we are using segwit fee be can reduced to half. Also most wallets don't tell the size of the transaction at all, so i will leave the exact calculation a side.

On average single transaction usually have 1 input and 2 outputs  which will be =>226 bytes, 

Now we must know what is average/median fee per byte in recent block to get this we have to get from somewhere like "https://bitcoinfees.earn.com/" => i got it 30 satoshis/byte (fastest and cheapest)

If I multiply it with bytes 226 x 30 = 6780 satoshis = 0.0000678 => 0.79 US Dollar (fast & min)

So can that's lowest, now from the same website, i can the max 181 satoshis/byte

If I multiply it with bytes 226 x 181 = 40906 satoshis = 0.00040906 BTC => 4.74 US Dollar  (max)

May be i went into too technical details

This is indeed an interesting thread.Kudos fellas,very informative.I hope all the technical answers at least are kept updated in the first post (might as well as one of the mods to reserve couple of  posts for the thread).

Am I allowed to ask questions ? If anyone want's to,give the below question a try.If the answers is convincing,I'll leave some merits.

My question : How to calculate transaction fees before sending bitcoins ?

So, reading it from here :

https://www.canada.ca/en/financial-consumer-agency/services/payment/digital-currency.html#toc3
https://www.canada.ca/en/revenue-agency/news/newsroom/fact-sheets/fact-sheets-2015/what-you-should-know-about-digital-currency.html


Like bill gator said, capital gains tax only applied to the profit you make from crytocurrency you bought from your local currency (in this case CAD) and if you make a business company that accepts bitcoin then the trade that happens between you and your customer is under the law of barter in the Canada. You would be required to file the amount of the trade as your income and you are liable for taxes.

https://www.moneywehave.com/how-is-cryptocurrency-taxed-in-canada/
https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/it490/archived-barter-transactions.html

Sorry that i brought a lot of links, just want to give some sources so people can read it as a references. Please correct me if i am wrong because i can be wrong since i am not a native english speaker, i am not a legal expert, and not an expert in Canadian law on taxes.

Question #9:
A bitcoin transaction with 6 confirmations is usually considered to be secure. Why is it so?

Answer

With one confirmation you are vulnerable to the 51% attack. There could also be a miner with a lot of hashing power who could get a couple blocks in a row, so three confirmations removes most of them.

With six confirmations it is essentially mathematically impossible for an attacker with less than 51% of all mining capacity to get six blocks in a row. and still surpass the longest block chain. With 51% or a lot more than 51% the attacker can get six confirmations by creating a parallel blockchain in which only transactions approved by the attacker get included in blocks.

Therefore 6 confirmations are needed to prevent the attack from attacker.

Without googling the answer, I believe this to be incorrect, as both USD and CAD are deemed currencies by both nations. At the most, you'll pay an exchange fee imposed by your bank or exchange service that you use, but that shouldn't be confused as a tax from either government. Bitcoin is considered a property, and if the Canadian law is anything like US law, it gets treated just like real estate. You only pay capital gains on any profits that you make from selling it. If you sell it at a loss, however, I'm not sure if you can claim that loss, like you would with a house. Although I'm a US citizen, I do not use USD to purchase Bitcoin, so I don't ever plan on having to pay taxes on it, so I guess I've never researched it into full detail like I do for everything else tax-related in my life

I think you would be taxed less than that actually. Capital gains only applies if you've purchased the bitcoin with CAD, or something like that; there are contingencies on capital gains that wouldn't apply to earned Bitcoin. I believe only purchased Bitcoin that you've sold for a profit. I don't know Canadian law, but in American law in many states and federally you do not need to pay Capital Gains on your Bitcoin unless you purchased it with USD or another currency that you've purchased with USD (if you exchanged your currency, for example), something like that; I'm no legal expert. It is a bit circular, but that's because there is little to no precedent and I do not know of any cases where they have pursued and won legal judgement against someone in a situation like this. It could be argued that only sales tax and the other normally applicable taxes would be in order for your business; unless your business is financial investments. I think the Small business tax rate is something closer to 10% in Canada, plus you must retain PST/QST/RST if that's relevant.  So you'd be paying about half that in taxes for any regular business besides financial investment.

Edit: When you accept USD for example, you do not pay the capital gains on whatever increase in value the USD may experience before you exchange it back to CAD; unless you are a financial investment company. At least, this is how I understand it and have seen many people operate this way.

I don't see why I'd be taxed at 20% when I sell. Unless I'm very wrong, Canada taxes Bitcoin under capital gains, so I'd only be taxed 20% or whatever the amount is for the gains I made. I think how it works is that if I earned 1000 BTC when it was worth $1, and I sold it instantly, it would not be a capital gain. If I sold at $2, $1000 should be taxed at capital gains as that's the amount gained.

If i am a creator of something, i would be proud of myself if my creation is known and used all over the world be any people, rich or poor, old or young, men or women. For now, sending them money is not an option because they are already richer than most of us, so the option left is to give them the joy to be proud of their creation, but how? In my opinion the best way is to spread bitcoin all over the world, locally, in wherever place you are right now, it will create a potential bitcoin user as a real bitcoin user, later on will make a country adapt bitcoin and blockchain technology, in short word, spread the awareness of bitcoin. There is no better feeling than knowing you are making a useful product for humanity.