Bitcoin segwit vs unlimited

Transaction malleability refers to the possibility that tiny pieces of transaction information could be changed, invalidating new cryptocurrency blocks. It was also intended to speed up the validation process by storing more transactions in a block. Key Takeaways Segregated Witness SegWit refers to a change in Bitcoin's transaction format where the witness information was removed from the input field of the block. The stated purpose of Segregated Witness is to prevent non-intentional Bitcoin transaction malleability and allow for more transactions to be stored within a block.

SegWit was also intended to solve a blockchain size limitation problem that reduced Bitcoin transaction speed. Understanding Segregated Witness SegWit The Bitcoin network consists of thousands of computers that work as validators for the blocks created by miners. These computers are called nodes, which each keep a complete record of every transaction. This record is called a blockchain. The Bitcoin network faced several problems as it matured.

One was that more transactions were occurring, which added more blocks to the chain. Blocks are created every 10 minutes and used to be constrained to a maximum size of one megabyte MB. Due to this constraint, only a certain number of transactions could be added to a block. The number of transactions being conducted, represented by the blocks, was weighing down the network and causing delays in processing and verifying transactions.

In some cases, it took hours to confirm a transaction was valid. Without SegWit's implementation, Bitcoin transaction validation would have slowed to a crawl as the cryptocurrency grew in popularity and the number of transactions increased. SegWit was formulated by Bitcoin developer Pieter Wuille.

Wuille is also the co-founder of Blockstream, a software company specializing in digital security for financial services. The SegWit protocol divides the transaction into two segments. The unlocking signature the "witness" data is removed from the original portion, but it remains a part of the blockchain as a separate structure at the end. The original portion holds the sender and receiver data, while the separate structure at the end the "witness" structure contains scripts and signatures.

As a result of this segregation of data, more space is created, and more transactions can be added to the blockchain. Goals of SegWit To understand the goals behind SegWit's implementation, it's essential to understand what's going on behind the scenes that makes it useful. The Main Issue SegWit Addressed When one user sends another user some Bitcoin, two pieces of information are required: a public address and a private key.

A public address is a digital identifier for the entities involved in the transaction. Every user has a public address to receive and send Bitcoin, and the entire network can see these addresses. Private keys cannot be seen—they are used as verification that the public addresses belong to a user.

On a basic level, SegWit is a process that changes the way data are stored, therefore helping the Bitcoin network to run faster. The process for transferring Bitcoin starts when one user broadcasts a request to the network. This request includes the user's public address, the amount of Bitcoin being sent, and a transaction fee for the miners.

Next, miners process the transaction; information from both users is encrypted, which means the data is turned into a line of computer code called the transaction ID. At this point, the transaction is queued. Transactions are added to the queue until the block limit is reached and a block is created. Birds, does anyone teach a bird how to follow the one in front?

They can literally fall asleep while flying hundreds of kilometers and they still wont crash. Core will make you believe that bad shit will happen if you let miners or people decide things. Under emergent consensus a block limit will naturally emerge. Of course, the characterisation from Jerry that the current Bitcoin rules were imposed from above by Bitcoin Core, was a misrepresentation of how small blockers saw the system. In the small block world, the rules were determined by the nodes that users already run.

These rules are very sticky and changing them requires widespread agreement across the community. As for the view that, in nature, many systems appeared to converge or have structure, without such planning or agreement on the rules, it was not clear how relevant this was to Bitcoin.

At this point, Bitcoin was already very successful; the network had been operating reasonably smoothly for seven years, overcoming any issues. This appeared to have generated a degree of complacency in the community, with people having an overly optimistic view of the robustness of the system.

When questioned about some of the potential weaknesses in Bitcoin Unlimited, its supporters often said that Bitcoin was antifragile and that it would always work. The argument that Bitcoin Unlimited was robust because Bitcoin was so strong, that it was almost impossible to do anything wrong or bad to Bitcoin, seemed incredibly weak to me.

The reasoning here was to prevent a node from being stuck AD blocks behind the tip, after a blocksize increase when a string of larger blocks was produced. An inadvertent, ironic and perverse consequence of this is that a further blocksize limit increase within 24 hours could cause clients with a lower blocksize limit EB to follow the larger block chain, and for clients with a larger limit to stay on a smaller block chain.

It appeared as if Bitcoin Unlimited had been poorly constructed and the scenarios had not been thought through. This indicated just how desperate the large block camp had become by this point. Since EB was essentially a consensus rule, and the EB parameter miners chose were included in their blocks, attackers could see the distribution of EB values in the network. This could allow a hostile miner to choose the median EB value, for example, to split the chain and mining hashrate into two arbitrarily-sized groups.

This appeared to be a critical weakness. When questioned about this, Bitcoin Unlimited supporters would typically argue that miners are not stupid and they would not let this happen. They also sometimes asserted that, in order to prevent this, miners and users would all converge on the same EB value. However, if miners and users all converge on the same EB value in order to prevent a split, this seemed to be reasonably similar to the security model advocated by small blockers, of convergence on one set of rules.

In order to increase the blocksize limit in Bitcoin Unlimited, there would need to be a transition of EB settings to a larger value and then this vulnerability would then open up. Bitcoin Unlimited also made other changes to the software, not directly linked to the blocksize limit. Bitcoin Unlimited developers had built a technology to propagate blocks faster, called xThin, in contrast to a similar system in Bitcoin Core called compact blocks.

There were other ideas in the pipeline too, such as parallel block validation and flexible transactions. Flexible transactions were a new transaction format, similar to SegWit, which was also said to fix transaction malleability. The plan was to ban old-style transactions completely i. This was, ironically, a far more aggressive version of SegWit, which Bitcoin Unlimited developers opposed.

SegWit essentially kept the old 1 MB limit for old transactions and added more blockspace for new transactions. It therefore appeared that many of these features and proposals were not driven by technical expediency at all. Instead, it was about culture, ego and a desire to be involved in Bitcoin. Most of the large blockers by this point simply hated the small blockers and Bitcoin Core developers. They hated the perception they had that the small block group controlled Bitcoin, and they wanted to be part of Bitcoin.

Due to this desire to be more involved, Bitcoin Unlimited expanded its remit beyond simply a blocksize limit increase and covered a variety of areas. After the blocksize war was over, some in the Bitcoin Unlimited community eventually conceded these errors. We also wanted BU to stop trying to implement their own version of weak blocks for the time being. The critical issue was increasing block size and forking away from Core with as few distractions as possible.

Another member of the community commented: EC has been a massive mistake in hindsight. Amazingly, despite all of these potential security weaknesses, Bitcoin Unlimited had support from across the large blocker camp, from Brian Armstrong at Coinbase, to Gavin, Jihan Wu and Roger Ver.

None of these individuals seemed particularly interested in the nuances and the new parameters involved. They just wanted larger blocks. TOP, while node adoption appeared to be on the rise as well. The first pool to support it was ViaBTC, a mining pool which had taken investment from Bitmain and appeared to be largely under the control of Jihan Wu. The BTC. TOP pool was also believed to be controlled by Bitmain.

At the start of , around 15 to 20 percent of the Bitcoin hashrate flagged support for Bitcoin Unlimited. Bitmain also directly operated pools, such as Antpool, which started flagging for Bitcoin Unlimited in March This increased support for Bitcoin Unlimited among miners to the 45 to 55 percent range, a level it stayed at for most of Several Bitcoin developers and small blockers accused some of the miners of faking votes in support of Bitcoin Unlimited. They accused pool operators of changing the pool settings to add Bitcoin Unlimited-related data to the blocks, despite still using Bitcoin Core to produce the blocks.

They were able to determine this by looking at the transactions in the blocks, which appeared to have been selected by using a new algorithm in Bitcoin Core, which Bitcoin Unlimited had not implemented. Some small blockers, who regarded Bitcoin Unlimited itself as bad, viewed these fake flags as further malicious behaviour.

Miner signalling about which consensus rules they were enforcing was supposed to be a mechanism to ensure smooth upgrades to the protocol rules. False flagging was considered an approach that made upgrades more dangerous. Actually, false flagging in favour of Bitcoin Unlimited can be considered as an attack on Bitcoin Unlimited, as it could cause a failed activation. To them, this was building up considerable momentum.

The miner flags were an important political message, whether the votes were fake or not. This may have been the first block produced, with sufficient proof of work, over 1 MB. This was probably some kind of error or accident, as there was no apparent coordination behind this. Bitcoin nodes across the network rejected the block as invalid, which was an example, according to smaller blockers, of why one needed user agreement before conducting a hardfork.

Large blockers, such as Roger Ver, tried to brush this incident under the carpet, claiming that stale blocks occur all the time, without accepting that this block was not just stale, but invalid. In March , an event occurred which caused significant damage to the reputation of Bitcoin Unlimited. The number of reachable Bitcoin Unlimited nodes suddenly took a massive nosedive. It bottomed out at 11 PM, with nodes. What happened was a critical DoS bug was introduced into the xThin element of the Bitcoin Unlimited code, which had nothing to do with the blocksize limit.

This had been exploited, causing almost all the Bitcoin Unlimited nodes to crash. This issue was highlighted by the smaller blockers, who helped draw attention to the failing to many cryptocurrency media outlets. The node crash also put the project under more scrutiny from the wider larger block community.

Many had just thought of it as a generic larger block client, but now they were asking more critical questions, such as: what is this organisation, and why is there a president? Why are they changing aspects of the code not related to the blocksize? What is the AD parameter for?

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You may think that since individuals and small companies are leaving bitcoin, this means the settlement supporters are winning. However, noone is using bitcoin for settlements and there are no signs that this will change. Then there are people who want bitcoin to fail. Whether it is because they invested heavily in an alt coin or because they benefit greatly from the status quo of the economy.

This means having an even faster transaction speed versus SegWit transactions, better scalability and even lower fees per transaction. To add to this, bech32 has better error-detection and makes addresses lowercase only for better readability.

The only downside of bech32 is that not every major platform supports this address format yet. As soon as a transaction is initiated from the end of the sender, the involved codes and transaction data are stored on the database and immediately transferred to the end of the sender.

The involved script code and characters are recorded on a separate extended block. Hence, the decentralized structure provides enough safety and security for both ends. As soon as the transaction is completed and the Bitcoins are transferred to the target wallet, the data is recorded and shared with the server. What benefits does it offer to the users?

In comparison to other segregated witness addresses, Bech32 has a comparatively lower transaction fee. It gives the user a better experience on the blockchain platform. It happens because the segregated witness addresses enable the separation of signatures every time a transaction takes place concerning the original transactional data.

As a result of this separation, any user that uses a segregated witness address pays a lower transaction fee and experiences better efficiency in transactions as compared to legacy addresses. Apart from this, a user gets to experience faster transactions if it involves a segregated witness address that also comes with an improved capacity of the blocks.

It happens because blocks can store data for more transactions with segregated witness addresses when compared to legacy address formats. Segregated witness addresses also present a better scope of formidable improvements in terms of block size, which provides better efficiency to the user as compared to legacy address formats. Pada ujian, Dryja dapat menemui blok 3. Ini bukan blok biasa KB dengan txid dan skrip output, dan blok saksi 2.

Ini satu blok, yang hampir sama dengan blok lama dengan beberapa syarat tambahan, iaitu 3. Mike Hearn and Gavin Andresen. Bitcoin Unlimited is represented by Roger Ver. Roger is an early Bitcoin investor and has been said to have around , Bitcoins this has never been confirmed.

He invested in companies such as Blockchain. What will the community choose — Segwit or Bitcoin Unlimited? But while no decision is made Bitcoin blocks are running out of capacity and today you have to wait hours and sometimes days for your transaction to get confirmed. Even though the debate has been going on for several years now, it seems that for the first time we have reached a boiling point.

In order to better understand how and when this fork will happen I want to first address the different players we have in the Bitcoin ecosystem: Miners — The people who operate expensive computers that confirm Bitcoin transactions. Without them no transaction would ever be inserted into the Blockchain i.

At the moment Segwit and Bitcoin Unlimited are both far away from that milestone. As you can see, at the time of writing If these Wallets, exchanges and full nodes — Miners are only validating transactions that nodes on the network create. When I say nodes, I mean computers running fully independent Bitcoin wallets that are sending, receiving and validating Bitcoin transactions.

These nodes belong to Bitcoin wallets, exchanges and individuals who want to independently verify and transmit their Bitcoins without any reliance on a 3rd party. The two coins will be treated separately but I think the most interesting part of the one page document is this: Today On the other hand only Nodes decide for themselves what software to run regardless of miners. So theoretically there could be a situation where a majority of the miners start mining Bitcoin Unlimited but a majority of the nodes continue to use BTC.

If this were to happen for example an exchange i. On the other hand, if a large percentage of miners drop out of the network, the difficulty to mine BTC will increase dramatically as a lot of miners have suddenly disappeared. This will create even slower confirmation times and higher fees until the mining difficulty adjusts. Every blocks that are mined the protocol adjusts the difficulty so that blocks will be mined every 10 minutes on average.

To sum things up — at the current status quo a fork is really bad for Bitcoin and will create a lot of confusion. For example, Coinbase recently announced that they will only support BTC initially. On the other hand Breadwallet declared that they will continue to connect to the chain that is the most popular amongst miners.

You will not see your balance on the less-popular chain, and your bitcoin balance as shown in the breadwallet app will not change. Every wallet has a different policy, if you want to make sure you have both BTC and BTU available you should keep your coins in a local wallet that allows you control over the private keys.

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Merits of Bitcoin Unlimited: It is the best solution for the issues related to block size. It enhances the efficiency of transactions made via bitcoins. Demerits of Bitcoin Unlimited: It is not yet tested. It constitutes a smaller team for development. The track record of the development team is not good. It is completely irreversible in nature.

Others want Bitcoin to be a settlement network used only by big financial institutions, while regular people use something else. You may think that since individuals and small companies are leaving bitcoin, this means the settlement supporters are winning. However, noone is using bitcoin for settlements and there are no signs that this will change.

Then there are people who want bitcoin to fail. Whether it is because they invested heavily in an alt coin or because they benefit greatly from the status quo of the economy. This means having an even faster transaction speed versus SegWit transactions, better scalability and even lower fees per transaction.

To add to this, bech32 has better error-detection and makes addresses lowercase only for better readability. The only downside of bech32 is that not every major platform supports this address format yet. As soon as a transaction is initiated from the end of the sender, the involved codes and transaction data are stored on the database and immediately transferred to the end of the sender. The involved script code and characters are recorded on a separate extended block.

Hence, the decentralized structure provides enough safety and security for both ends. As soon as the transaction is completed and the Bitcoins are transferred to the target wallet, the data is recorded and shared with the server. What benefits does it offer to the users? In comparison to other segregated witness addresses, Bech32 has a comparatively lower transaction fee. It gives the user a better experience on the blockchain platform.

It happens because the segregated witness addresses enable the separation of signatures every time a transaction takes place concerning the original transactional data. These nodes belong to Bitcoin wallets, exchanges and individuals who want to independently verify and transmit their Bitcoins without any reliance on a 3rd party.

The two coins will be treated separately but I think the most interesting part of the one page document is this: Today On the other hand only Nodes decide for themselves what software to run regardless of miners.

So theoretically there could be a situation where a majority of the miners start mining Bitcoin Unlimited but a majority of the nodes continue to use BTC. If this were to happen for example an exchange i.

On the other hand, if a large percentage of miners drop out of the network, the difficulty to mine BTC will increase dramatically as a lot of miners have suddenly disappeared. This will create even slower confirmation times and higher fees until the mining difficulty adjusts. Every blocks that are mined the protocol adjusts the difficulty so that blocks will be mined every 10 minutes on average.

To sum things up — at the current status quo a fork is really bad for Bitcoin and will create a lot of confusion. For example, Coinbase recently announced that they will only support BTC initially. On the other hand Breadwallet declared that they will continue to connect to the chain that is the most popular amongst miners.

You will not see your balance on the less-popular chain, and your bitcoin balance as shown in the breadwallet app will not change. Every wallet has a different policy, if you want to make sure you have both BTC and BTU available you should keep your coins in a local wallet that allows you control over the private keys. I will elaborate a bit more on this later.

In case a fork does occur and you get both BTC and BTU a hacker can use information from one of your coins to steal the other. This can be the result of a reply attack. How low can it go? Nobody knows. To some it up, no one really knows what the price will be after a fork for BTC or BTU but there seems to be an overall agreement that the price will drop substantially at least at first.

Altcoins Another question everyone is asking is what will happen to the price of Altcoins like Ethereum, Dash or Monero if a fork occurs. What should I do with my coins? No matter who you support BTC or BTU you should make sure your coins are on a self hosted wallet one that you control the private keys to. Sell all of your Bitcoins — If you are holding an amount in Bitcoin that you can not afford to risk at any cost perhaps it would be best to sell all of them right now and not take any part in this.

However, no one really knows when the drama will end or what will be the price when that happens. This is my own opinion and please do not take it as investment advice, form your own opinion by educating yourself. I am making sure to get all of Bitcoins out of wallets like Coinbase and even Blockchain.

The whole issue is pretty ugly and both sides carry some of the blame in my opinion.