Topic: A simple bitcoin Q/A. Learn new and interesting stuff about bitcoin. - page 12. (Read 27371 times)

Bitcoin days destroyed is another way to measure bitcoin trading volume, in a more significant way.

This idea was created because 1 bitcoin could be sent thousand times a day, to create a false high volume.

The idea behind Bitcoin days destroyed is to consider in the trading volume equation the number of days each bitcoin has not moved from that address.

So if you have 1 bitcoin that has not moved in the last 100 days, when it move to another address it would have the same weight in the volume as 100 bitcoin that were transferred yesterday.

This equation would give a more precise value for bitcoin volume and economic activity as it cannot be manipulated by whales.

Question #9
Here is my answer
The classic bitcoin client will show a transaction as "n/unconfirmed" until the transaction is 6 blocks deep. Merchants and exchanges who accept bitcoins as payment can and should set their own threshold as to how many blocks are required until funds are considered confirmed. When potential loss due to double spending as nominal, as with very inexpensive or non-fungible items, people may choose not to wait for a transaction to be confirmed, and complete the exchange as soon as it is seen on the network. Most exchanges and other merchants who bear the risk from double spending require 6 or more blocks.

There is nothing special about the default, often-cited figure of 6 blocks. It was chosen based on the assumption that an attacker is unlikely to amass more than 10% of the hashrate, and that a negligible risk of less than 0.1% is acceptable. Both these figures are arbitrary, however; 6 blocks are overkill for casual attackers, and at the same time powerless against more dedicated attackers with much more than 10% hashrate.

Freshly-mined coins cannot be spent for 100 blocks. It is advisable to wait some additional time for a better chance that the transaction will be propagated by all nodes. Some older bitcoin clients won't show generated coins as confirmed until they are 120 blocks deep.

Question : What are bitcoin days destroyed?

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No copy pasting!

Page 3 Updates:

Update 1:Sure you can. Any one can merit the they feel is merit deserving.

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New rule:Plagiarizing or copy pasting content from various sources is NOT allowed. Rephrasing such content is also not allowed.

I didn't really get your first question but you may be referring to the the time Satoshi limited the block size to 1mb or to when he posted this:


About the second question: The one parameter is the block size, I don't really know how much it would need to be increased but I would guess to a thousand times the current 1mb block size. Because the Bitcoin network is now handling around 210k transactions per day based on blockchain.info while visa is handling around 150 million.

By the way, thanks for trying to help us while making us learn something in the same time.

This is a great thread. I made one thread about giving away merit but people told me i should lock my thread and come to this thread. Ill try to support sending sMerits if i find a good answer too if i may, may i Pugman and bill gator?

Question #6:
In Satoshi's old e-mails they imply that handling as many transactions as Visa should not be a problem.
What does this imply about the development of Bitcoin?
Specifically, what is one parameter that would need to be changed and to what value to accommodate such heavy transaction flow?

The purpose of bitcoin development is to serve people as a digital currency that can be used for micro or macrotransaction everywhere and by everyone, without a 3rd party work in it. So those words mean that Satoshi's want bitcoin used for everyday purpose like Visa did today for millions (or even billions) of people, not as a digital assets like people do now. And for one parameter that would need to be changed is block size, it has made a lot of debate over the years as bitcoin only use 1 mb up until now and the reason behind it is to fight transaction spamming on the network because if bitcoin has bigger block size then it would be more vulnerale to transaction spamming, it is a great reason though, but some people who are in "bitcoin world" suggested to increase it to at least 2mb.


Please tell me if my answer is bad or not   , still on learning proccess.

I don't think Satoshi envisioned SPV mining taking place, as after all, the role of a miner is to validate transactions. SPV mining includes no transactions and does not validate the previous block. A lot of the nodes at the time weren't on the latest version, so they accepted the block as valid, and roughly half of the network was SPV mining, so they would accept invalid blocks, and start to build on those.

This should no longer be an issue. Bitcoin Core 0.9.5 and later versions can detect invalid blocks now related to the BIP 66 rules, and there is zero reason to be running a node with such an old version. Most, or all of the network has stopped SPV mining, as it's more profitable to fill up blocks, and better for the network. This almost certainly won't happen in the future, but it's false to say that 6 confs is safe from any attacker. There could be some other extremely rare case that happens in the future, that leads to a similar result.

I was completely unaware of this ever occurring. I was reading through Satoshi's old emails as suggested and he was speaking about how 6-blocks should/would be sufficient enough that it would not be an orphan chain. I'm reading through the extra reading you've provided, but I can't find any comparisons, clarification or contextualization of what Satoshi meant by this. Have we moved away from the original development enough to render his statement incorrect, or was this always a significant possibility?

I know you said it was due to SPV, but I am wondering why this chain was not invalidated sooner? What have we done to prevent this in the future, or is this still a capability?

Question #6:
In Satoshi's old e-mails they imply that handling as many transactions as Visa should not be a problem.
What does this imply about the development of Bitcoin?
Specifically, what is one parameter that would need to be changed and to what value to accommodate such heavy transaction flow?
Answer:
Scalability is the subject of the first correspondence and recurring themes in emails. Satoshi commented that the higher boundary block size could be offset once "we have actual usage close to the limit and ensure its performance is okay", adding that the choice is to keep it lower to a more reasonable size and believe that Moore's law will ensure current capacity This will ensure the capacity grows with demand.
Educated scales, and mathematics succeed in producing numbers. I want something that is not too low if it is very popular and not too high if not. "He added that the 10-minute block target is also a conjecture.

That is false. On July 4, 2015, there was a 6 block orphan chain, and those blocks were accepted by almost all wallet software. It was a result of SPV mining (mining based off of just the block header, without verification. Can give a small advantage in letting them find a block a bit faster) ontop of an invalid block that signaled a v2 block (the network had soft forked into v3 blocks). It's entirely possible that a transaction could have been put in the first orphan block, got to 6 confirmations, and then went back to 0. The mempool could have had more higher fee transactions in the process, making the earlier mentioned transaction have a slower confirmation time. This allows an attacker to theoretically double spend with a higher fee. It is an extremely rare scenario, but it is false to assume that it is entirely safe from any attacker. There were fortunately no double spends from July 4th.

More reading:

https://bitcoin.org/en/alert/2015-07-04-spv-mining
https://en.bitcoin.it/w/index.php?title=July_2015_chain_forks&redirect=no

As mentioned in bitcoin wiki, only 6 blocks or 1 hour is enough to make reversal computationally impractical. Generally when it reaches 6 confirmations, there will be far less possibility for the transaction to be reversed, thus it is secure. 10 minutes is the average time needed to find a block. It will be very very hard for attacker to overtake the blockchain from a fork six blocks prior.

Also, in Satoshi's paper (https://bitcoin.org/bitcoin.pdf), it shows:

If the attacker has a small percentage of hashing power then 6 blocks will be enough to ensure the secure of the transaction.

After 6 confirmations it is safe from any attacker as the transactions won't be vulnerable to race or finney attacks and 6 confirmations is enough for large amount therefore it is usually considered to be secure.

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

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I have 2 previous answers to update, I'll try my best to update it within 48-72 hours along with the answers for this question.

I apologize for taking so long to reply and merit you. I've been running around like a chicken with their head cut-off, very busy trying to get a small bitcoin mining operation started among other things.

Your numbers are a little different from mine, but I was going off of the # of transactions that were happening back then, so I'll give it to you. Your reasoning, logic and everything else arrives you at the right conclusion. It seems like pugman has been running the questions for now, so I won't hop in the way; just wanted to give credit where it is due.

Correct, Merited I'll post another question when Pugman seems stumped, out of ideas or requests for me to do so.

What @bitmover has said is totally accurate. But I just want to give my answer too as I'm excited because I learnt this just now while searching for the answer of this, and have never been aware of anything like this before.

So, a more clear and simple answer to the question, "How exactly does a 51% attack work?" is that a person or a group of people having control over 51% or more hash power can easily manipulate the transactions, meaning they can prevent other miners from mining any blocks and do it themselves to earn all the block rewards and they can pretty easily double-spend a transaction done by themselves, or prevent other transactions to get confirmed.
However, they cannot do much with already mined blocks and transactions. The more the time distance of a transaction/block is, the less are the possibilities for the attackers to change or reverse it.
Such an attack can be done even with less hash power but the probability of success would be much less then.

When I read your post I immediately thought about someone who has 51% mining power.
As stated  in Bitcoin whitepaper " The system   is   secure   as   long   as   honest   nodes   collectively   control   more   CPU   power   than   any
cooperating group of attacker nodes."

So I believe this is the case.
Well, from my understanding in this case the attackers could just make fake transfers in past blocks to their address. As they would mine faster than the network, this "alternative block" would became the real block, as it is the longest chain. Then the whole network would confirm it later on.

They could even decide which transactions get confirmed or not. And double spend their own coins too.

I made a few google searches, to post a better answer:
https://learncryptography.com/cryptocurrency/51-attack
" 51% attack doesn't give you full power over the bitcoin network. The farther back in the blockchain transactions are, the more secured they are against this kind of attack. Realistically, an attacker would only be able to modify transactions within the past few blocks. They would also not be able to make new coins out of thin air - except those received as block mining rewards as usual.

It is an interesting concept because it is theoretically possible; the network is free and open, so if someone were to have enough computational power (which would cost a huge amount by itself), there is no bitcoin authority to stop them from doing so. In the event that such an attack successfully takes place, it is likely confidence in the currency would be lost and it’s value as a currency would decline rapidly. "

Good info here too.
https://bitcointalk.org/index.php?topic=52388.0;all

Question : How exactly does a 51% attack work?

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This might be a hard question to answer but take your time, as long as your answer is correct and you are the only one who has answered, you'd be declared winner. Get your things going.

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I'll update the other posts in 24 hours.

       Blockchain is a continuously growing list of records that consist of several decentralize nodes. It is the worlds leading software platform for digital assets which is originally developed as the accounting method for virtual currency.
     While Database is an structured set of data held in a computer. It is an organized collection of information so that it can be easily accessed,managed and updated.
     Blockhain has a core characteristics of being decentralizes and trustless. Data can be shared accross the network without the need of an intermediary to validate or authorize it.

In database everyone sends information into an intermediary, that has a single version of a truth, which helps to avoid disagreement between different parties while communicating through a centralized database. Blockchain has another way to solve the data coordination problem and make sure disagreements won't occur, as it is decentralized and there are multiple parties that share a single truth and none of those parties may be considered as central - the consensus has to be reached. So the individual transactions are put into blocks, and the chain of those blocks must ensure consensus.

Instead of rephrasing this link and talking about architecture:
https://www.coindesk.com/information/what-is-the-difference-blockchain-and-database/
I will tell you what I know.
A database is online, but it is kept there by a server computer, so it is centralized by definition. If I have a database, I control it and I can manipulate it as I see fit. It can be hacked or changed by others.
A blockchain is decentralized, and it is on hundreds or thousands of computers, based on the popularity of the blockchain. Some, such as bitcoin blockchain is very popular due to the high price, and some others are not so. Blockchain is an immutable public ledger and it cannot be hacked, modified, stolen or manipulated. If you own 51 percent of the blockchain though, then it could be a problem as they can all pool and do something nasty with that.
There you go, I hope you like what I wrote because I tried to write it as simple as possible.
Maybe there should be a guide like "Bitcoin for idiots" or something like that. Being too hard or technical is a wall in the way of the public.