Topic: A simple bitcoin Q/A. Learn new and interesting stuff about bitcoin. - page 2. (Read 27371 times)

It's the first time I'm joining this thread and it seems an interesting way to learn new stuff
I'm not going to quote you any texts I find online but just say what I understood from it while reading about it, with my own words. So, here it goes:

BIP 174 is a proposal to use a binary transaction format that can allow users to pass a transaction around multiple people (using different wallet softwares) to sign and combine their signature to authorize it. This format will also allow offline signers like hardware wallets to sign transactions without needing direct access to unspent transaction output.

BIP is Bitcoin Improvement Proposals and Proposal 174 is titled " Partially Signed Bitcoin Transaction Format"  that proposes to have a binary transaction format that will have all the necessary information for a signer to produce signatures for the transaction and holds the signatures for an input while the input does not have a complete set of signatures. The signer can be offline as all necessary information will be provided in the transaction.

Signing transactions also requires users to have access to the UTXOs being spent. This transaction format will allow offline signers such as air-gapped wallets and hardware wallets to be able to sign transactions without needing direct access to the UTXO set and without risk of being defrauded.


Source : https://github.com/bitcoin/bips/blob/master/bip-0174.mediawiki


Look like it is currently tough for me to put these technical documentation in somewhat simple words.

You forgot to open the command with
To answer this, I'd first like to give a short explanation of what a BIP is. BIP stands for "Bitcoin Improvement Proposals" and as the name suggests, community members suggest an improvement for the Bitcoin protocol in an official and structured manner. Every BIP goes through the some phases while it's being decided if it'll be implemented or not, which usually (but not always) look as the following,


So, BIP 174 is going to allow users to perform offline transactions through a protocol that would allow them to sign transactions without having to upload them to the network immediately.
It's also called as "Partially Signed Bitcoin Transaction", PSBT for short.
From the information I've gathered I understand it works almost like a check (cheque) we use for fiat transactions, where we sign in a paper that we'll offer 1000€, give it to a person and then they go to a bank to cash out from our account. In Bitcoin's case we sign a transaction offline, give it to a person, they may even sign it and give it to another person, until finally someone goes online and cash out the BTC from the initial signer.

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Serious explanation ends here, bellow is some extra info I've found for which I'm note 100%.
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The bellow slides 10 and 11 show an example. If my knowledge in Japanese from years of otaku activities are to be trusted,
https://speakerdeck.com/azuchi/bip-174-partially-signed-bitcoin-transaction-format?slide=10
Alice initiates a PSBT transaction and sends it to Bob. He then signs it and sends it to Carol who signs it and sends it to Bob who finnaly recevies the money from Alice. Alice initial transaction was supposed to be for Bob, but since he signed from Carol and then Carol for Bob, Bob is the one who receives the Bitcoins.

Sorry lads, don't yell at me,I am back. And I got a question.

Question: What is BIP 174? (Its gonna be out for bitcoin 0.17.0 version)

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Hello employee, did you do the reports I asked you to do? I didn't get any, and you're fired. Get your filthy ass outta here.

Don't post for merit dude. Just post about what you like and what you know,with some common sense. That said, whatever you need to learn from this thread, is there in this thread.

Hello boss, Is this Q/A still available for the Answer? And If it's not Any way for make merit's or something to learned about your thread? Seeing your thread about bitcoin makes me amaze for someone who really devoted to bitcoin.

I also agreed with @r1s2g3 and I don't think it can be taken as plagarised contents. He/she looking for research paper before giving the answer is actually better than just posting spam. If she/he read that research paper before posting means something to me and even worth a Merit(at least for me). Since the introduction of Merit system, people are going to read even research papers before posting. So isn't that good thing rather criticizing?

I don't know why people are thinking that details in the Wikipedia is always right and those are not plagarised from anywhere. Actually some of the details are incorrect in Wikipedia and academic communities normally not taken details published in the Wikipedia as trusted sources for cites, since those details can be manipulated.

Nopes, This guy copied from that paper (the PDF reference  in the post). Since I do not expect a research paper to be plagiarized, and both paper and wikipedia having same definition, I make assumption might be wikipedia is plagiarized.  
PS: Still make me wonder how somebody looking for a simple definition find a complex research paper in which definition is in the third page of the research paper not even in the first and did he/she really read that paper to that point?

ETF = Exchange Traded Fund. I had explained my other post.

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Directly copy/paste from Wikipedia. By the way people are going to research due to merit reward . I just avoid him to report plagiarism as well he try to research.

Look like I am late to party. Everybody given the definition and quoting the source so I am not going to repeat the same definition.

Lets go in definition of word "Avalanche".  Actually avalanche is a snow slide or in other words a large mass of snow going down by the violent force (due to gravity). It is very dangerous and can have speed of 80 miles per hour or 128 km per hour. They just need a trigger  that is most of time is provided by human activity. Actually snow in steep slope are in a delicate balance and if this balance is broken then gravity start playing its role. They can grow more strong in their downward journey gathering more snow and disturbing other delicate balances too.

So slight change in input (trigger) causing the output to change too much (disturbed balance) is Avalanche effect.

Hope you guys enjoy this relationship between a natural effect with a cryptography phenomenon.

The Avalanche effect when describing cryptography refers to an eventual change in the output hash that affects half of the bits but is started by a tiny change of the input say just one bit. The Avalanche analogy comes from the facts that even one snowflake landing on the rest of the snow on a mountain can start a huge avalanche.

In  cryptography,  the  avalanche  effect  refers  to  a
desirable  property  of  cryptographic  algorithms,
typically  block  ciphers  and  cryptographic  hash
functions. The avalanche effect is evident if, when an
input is changed slightly (for example, flipping a single
bit)  the  output  changes  significantly  (e.g.,  half  the
output  bits  flip).  In  the  case  of  high-quality  block
ciphers, such a small change  in either  the key  or the
plaintext  should  cause  a  drastic  change  in  the
ciphertext.
 
If a  block cipher or  cryptographic hash function does
not exhibit the avalanche effect to a significant degree,
then it has poor randomization, and thus a cryptanalyst
can make predictions about the input, being given only
the  output.  This  may  be  sufficient  to  partially  or
completely  break  the  algorithm. Thus,  the  avalanche
effect is a desirable condition from the point of view of
the designer of the cryptographic algorithm or device.

(PDF) Study of Avalanche Effect in AES. Available from: https://www.researchgate.net/publication/304141002_Study_of_Avalanche_Effect_in_AES [accessed Aug 23 2018].

In cryptography, the avalanche effect is the desirable property of cryptographic algorithms, typically block ciphers and cryptographic hash functions, wherein if an input is changed slightly (for example, flipping a single bit), the output changes significantly (e.g., half the output bits flip). In the case of high-quality block ciphers, such a small change in either the key or the plaintext should cause a drastic change in the ciphertext.

Avalanche effect is a property of cryptographic hashing algorithm. If small change(assume 1 bit changes) in the input value leads to a significant change(half of the output bits flip) in the output(hash value) we called it as avalanche effect of cryptography.

That way people can ensure that a person cannot predict the output massage by looking at the changes of the output hash. So this property brings more security for the massage sender as well as the receiver.

Source>>>https://en.m.wikipedia.org/wiki/Avalanche_effect

This effect occurs when a small change in input leads to large changes in output. This is essential to ensure greater safety. Since it is much more difficult to predict what Input was, even when knowing the output.

If a single bit of the input leads to only one bit of the output, it is easy to try to find the input: just change a bit of it and check if it is correct.

It's like the butterfly effect. A small change leads to unexpected results.

Wiki

Question: Explain the avalanche effect.

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Coming with questions is really hard nowadays, you have to witch hunt for those that not everybody knows.

Types of Exchange Traded Funds (ETFs)
United States Market Index ETFs
Foreign Market Index ETFs
Foreign Currency ETFs
Sector and Industry ETFs
Commodity ETFs
Derivative ETFs
Style ETFs
Bond ETFs
ETNs — Exchange Traded Notes
Inverse ETFs
Leveraged ETFs
Actively Managed ETFs
Dividend ETFs
Innovative ETFs

What is an ETF?
ETF stands for “exchange-traded fund” and describes a kind of investment fund where the price of assets like gold, stocks and oil can be tracked. These assets can then be traded on exchanges, just like conventional stocks.

how ETF IS RELATED TO BITCOIN
Bitcoin ETF - when you buy bitcoin ETF. ETF tracks real time tracking of bitcoin price.
the difference is that when you invest in bitcoin etf you have lots of bitcoins without buying and storing it.

how you can buy bitcoin ETF - Example

this company provides same service.
The Greyscale Investment’s Bitcoin Investment Trust (GBTC)

This company is holding more than 175,000 Bitcoins currently

benefits of purchase share
ownership of cryptocurrencies
assets are stored with Xapo Inc. This is a deep, cold form of storage and it is highly robust.







Michael Strutton, the CEO of Ironwood says in his Medium post
IF THE INTRODUCTION OF BITCOIN ETFS ATTRACTS 20% OF THE AVAILABLE EQUITIES TRADING MARKET (122 MILLION) THAT WOULD ADD 24 MILLION NEW INVESTORS!”

Exchange-traded fund (English Exchange Traded Fund, ETF) is an exchange investment fund, that is, it is an investment fund whose shares are traded on the stock exchange.
Operations on ETF shares can be made throughout the trading day, and their price varies depending on the activity of market participants.
All ETF shares must be fully secured with assets in the manager's account
In the case of bitcoin, transactions will be made not with bitcoin itself, but with ETF, which saves investors from having to have bitcoins.
The purchase in this case, as you have already understood, happens only indirectly.

We are hearing a lot about ETFs at the moment with the particular relevance to crypto being the attempts in getting a Bitcoin ETF sanctioned by the SEC. So what exactly is an ETF? it is an Exchange Traded Fund that is based upon a group of stocks, indexes or commodities. Investors can buy into these instead of purchasing individual stocks with the advantage being that the good performers will balance out the poor ones and give you a reasonable overall return. They differ from funds in that a fund will have a manager making the decisions on what to buy and sell whereas the ETF just tracks them.

A Bitcoin ETF will be based on the Bitcoin benchmark index which will track the daily price of Bitcoin and investors can then get involved through the fund giving them exposure to the swings in price without having to buy or store Bitcoins themselves.

I'll try to keep is as simple as possible for people with no economic knowledge...


ETFs are tradable "intangible things" (the correct word is "securities"), which track the price of anything valuable or a combination of them.

For example there is an index called "FAANG" that tracks the combined price of Facebook, Apple, Amazon, Netflix and Google (hence the name).
Someone could buy a few stocks of these companies or they could buy FAANG ETF.

People can go long on an ETF (bet the price will rise) or short (bet the price will fall).

ETF refers to exchange-traded funds. ETF is type of investment fund that is traded on public stock exchanges, but is a bit different from mutual funds. By owning an ETF, the investor indirectly invests in multiple assets as shares such as gold or other foreign currencies,etc without having direct claim upon them. Its like they indirectly own these assets. Advantages of owing ETF are :
1. Higher liquidity.
2. Lower fees than other shares.
3. Diversification of investment into different assets.
4. Real time trading can be done like stocks.
Some example of ETF are : crude oil, gold, foreign currencies.