• Initial Block Download (IBD): This is the initial synchronization that peers use to download and validate the blockchain from peers. Users download all blocks and validate all of the transactions & UTXOs in them. Users running full nodes have full sovereignty as they not only have the entire history, but also can use that history to empower themselves to run the consensus rules that conform to both that history and to the network. They can thus preserve their wealth no matter what in a trustless manner.
• Bandwidth: Users need significant amount of bandwidth to trustlessly download blocks during the IBD as well as maintaining synchronization with the network
• CPU: Users need processing power to perform both the IBD validation as well as maintain synchronization and process the transactions and blocks in a reasonable amount of time. On small devices, the CPU power required to validate the blocks can become a huge bottleneck.
• I/O: Data stored in memory correlating to the amount of read/writes to disk. Largely negligible on most devices but becomes more relevant on very small devices (IoT).

Reasons to reduce the block weight limit:

• Less costs and faster for users to perform the Initial Block Download of a Bitcoin full node and maintain synchronization to the Bitcoin network. Eventually, it will be so cumbersome to download the entire blockchain that users simply won’t do so, and will resort to SPV/Neutrino or trusted third party solutions to interface with the blockchain
• Potentially allow users to run full nodes on mobile phones and low bandwidth and low power devices that have limited bandwidth
• Increase the number of nodes using TOR, where bandwidth is even more limited
• There is already too much block space, so transaction fees might not be high enough in the future due to the Lightning Network if we don’t reduce the block size and force a fee market to form

Reasons NOT to reduce the block weight limit:

• Less controversy: community could focus on getting more users running full nodes through education rather than arguing on Twitter
• Decentralization is better increased by improving the UX for users running Full Nodes such as adding native hardware wallet signing support (PSBT) to the Bitcoin Core client and wallet GUI
• Access to more powerful CPUs and higher bandwidth continues to increase globally
• Full nodes are not that important unless the user is actually using them
• We don’t have enough data to inform the discussion
• There’s less reason to be concerned because companies are now offering Bitcoin full node hardware: @nodl_it @CasaHODL @lightninginabox
  @BitseedOrg @SamouraiWallet

Block weight limit reduction proposal:

• Reduce the block weight temporarily. This would be a 3–6 month reduction from the current theoretical block weight limit of 4mb, which is actually about 2.1mb in practice.
• 300kb would mean a theoretical block weight limit of ~1.2mb, resulting in maximum block capacity of about 700kb
• 600kb block size would mean a theoretical block weight limit of ~ 2.4mb, resulting in maximum block capacity of about 1.4mb

What does the current data tell us?

The number of reachable full nodes is up 78.57% in the last 2 years. The fluctuation in full node counts also seems to correlate with bull markets and bear markets as we see a peak around Nov 1st 2017 sustained through spring of 2018. By November 2019, it seems that node counts start to grow again slowly, perhaps correlating with increased number of people buying full nodes from hardware providers.

Don’t believe me? See for yourself: https://bitnodes.earn.com/dashboard/?days=730

My current opinion is that the people advocating for this change simply don’t have the data to backup their assertions that reducing the block size / weight limit will increase the number of full nodes. I have repeatedly asked for more data but it apparently does not exist.

Alex B. on Twitter

@BrickstringTech @1stCrassCitizen @sajmathieu @mj4m1n @BitcoinErrorLog @Piotr14Tra @LukeDashjr And people will find "data" to fit their argument every time, leading to constant bike shedding if ever we open the door of "economic intervention. This proposal is already in the trash bin along with Luke's PoW change. Bear markets ¯\_(ツ)_/¯

So, how do we get the data that we need?

I would like to see how various devices and locations are impacted. I feel like there’s a good opportunity to extrapolate some data out and visualize it in a way that communicates the total costs across a few different scenarios (mobile phone, vs. laptop wifi vs. hi-end desktop)

P.Miller on Twitter

@bitcoinpasada @hodlonaut @peterktodd @WhatBitcoinDid @LukeDashjr However, I am opposed to a soft-fork until I see some data to verify it. I think it would be really valuable for everyone to pitch in and crowdfund the research project below. I suggested the following to @LukeDashjr and he agreed: https://t.co/128hYFGVHk

Please let me know if I missed anything, or if there is something that needs correction.

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Summary: Reducing the block size and block weight limits in Bitcoin was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.

Okay, I know what you’re thinking. You’re tired of hearing the word scam used so often. Why label all of these altcoins as scams, and their creators and promoters as scammers?

Since the very early days of Bitcoin, people have been creating altcoins for the purpose of experimentation.

Many of the first altcoins created actually tried some interesting experimentation: Namecoin, Peercoin, Primecoin, Bytecoin, Mastercoin, and others. Mastercoin is today the OMNI protocol which is a token protocol on top of Bitcoin most famously used by Tether for USDT. Bytecoin was the first CryptoNote protocol and the Monero team forked the codebase and created their own cryptocurrency which they continue to add features to and market today.

After some of these interesting experimental ideas came out, it was not long before the floodgate of altcoins opened. It quickly became apparent that anyone could make an altcoin, brand it, and start marketing it to newcomers in crypto as “the next Bitcoin”, and probably make a lot of money convincing people to buy it.

There was Worldcoin, Dogecoin, Catcoin, DarkCoin, KittehCoin, SuperCoin, FeatherCoin, SexCoin, LottoCoin, CannabisCoin, and the list goes on… I could spend all day informing you about the hundreds… no… thousands of altcoins that I have witnessed rise and fall over the course of 6 years in the space.

At one point, I thought altcoins like Ripple and DarkCoin (now marketed as DASH) were interesting. It didn’t take me long to realize these were just centralized projects that would live or die through the marketing efforts of centralized corporate entities, which has proven to be true. They survive by rent-seeking on their own “investors”.

What are people “investing” in anyways? There’s an unlimited number of altcoins. Why are hashes marketed by a centralized entity any more valuable than those other hashes marketed by a different centralized entity?

Ironically, the altcoins that faded away were those that didn’t have centralized entities emotionally attached to maintaining a facade. The altcoins that have maintained relevance did so through their creators actively making an effort to brand and market them with catch phrases and buzzwords.

In other words, the altcoins that are actually decentralized are already practically dead: they have no dedicated devs, no community, no market liquidity, and are highly insecure.

Let’s talk about Litecoin — one of the least interesting altcoins ever created

By the time that Litecoin was announced on Bitcointalk, there were already a number of alternative protocols being experimented with. Litecoin was not one of these experimental projects to innovate. No, it was a marketing project.

Litecoin was created by Charlie Lee for no purpose other than to be an alternative crypto-money. It is literally nothing more than a copy of Bitcoin with some changed parameters and a different hashing algorithm. There have been hundreds of altcoins just like it, and there will be hundreds more.

In pursuit of this scam, the most sinister marketing Charlie ever came up with was to call Litecoin the “silver” to Bitcoin’s gold. The comparison to silver is intellectually absurd. The reason that silver existed as a monetary metal was because gold was simply less divisible than silver for small amounts. This problem of divisibility does not exist with Bitcoin. You can divide a Bitcoin down to 1 satoshi and use the Lightning Network to transact amount this small with practically zero fees. You can even transact in sub-satoshi amounts in a payment channel.

Understanding everything we know about money and network protocols, it is very safe to say that Litecoin is just a marketing scheme in competition with every other altcoin marketing scheme out there.

Litecoin is one of the more atrocious scams in the space because its’ creator and promoters take advantage of human ignorance and use ethically questionable marketing tactics to present it as something novel and innovative, when it is definitely not. Charlie has introduced zero innovations to the crypto space and instead simply copies all innovations from Bitcoin developers.

But didn’t Litecoin help Bitcoin activate SegWit? Not exactly.

A lot of people credit Litecoin with helping SegWit activate on Bitcoin but the fact is that this is not really true. For starters, the UASF/BIP148 code was not used to activate SegWit on Litecoin. Instead, Charlie flew to China to make a deal with Jihan and other mining pools to activate SegWit on Litecoin as long as he agreed to raise the blocksize in the future.

Here is a brief explanation of how SegWit was actually activated on Bitcoin.

In the spring of 2017, a Litecoin developer named ShaolinFry developed the UASF code as a way to activate SegWit on the Bitcoin network by users. UASF stands for User Activated Soft-Fork. This code was proposed as BIP148 but it was never merged into Bitcoin Core.

So, users took it upon themselves on social media to spread the word about running UASF nodes for personal and business usage in order to bring the situation to a head and force the activation SegWit on the Bitcoin network. Thousands of users and dozens of influential businesses within the Bitcoin community ran UASF nodes.

Ultimately though, it was not BIP148/UASF that activated SegWit on Bitcoin though. It was BIP91 by James Hilliard which was run by miners that activated SegWit in a last ditch effort to prevent any possibility of a chain-split or network disruption.

BIP91 was code proposed as a compromise to miners in order to activate SegWit until a blocksize could be increased with a 2mb hard-fork later.

I think it is safe to say that users running UASF nodes had the effect of putting an enormous amount of pressure on miners to activate SegWit or risk splitting the Bitcoin network, so in that regard it is possible that the UASF did have an effect.

This does not excuse the fact that Litecoin is still a marketing scheme promoted by Charlie Lee that uses very questionable tactics historically and currently to spread misinformation and confusion to newcomers.

Aside from the fact that Litecoin is just a clone of Bitcoin with a different mining algorithm, everyone should know by now that Litecoin is garbage for these reasons:

• Nobody is going to build the Lightning network on top of Litecoin.
• Litecoin is effectively centralized. It is run and marketed by a centralized leader, Charlie Lee, who runs the centrally controlled Litecoin Foundation.
• It will never generate enough fees to sustain security after the block subsidy is deprecated.
• If the blocks were full on Litecoin, the blockchain would grow at significantly greater rate than Bitcoin due to the fact that it would be producing ~ 8.4mb+ of data vs ~2.1mb of data in the same amount of time. The chain would grow 4 times as fast as the Bitcoin blockchain and eventually users would have trouble synching nodes from scratch and maintaining synchronization due to a steep growth rate in node costs (storage, CPU, and bandwidth). The two most important of these costs is CPU for validating transactions in blocks, and bandwidth to synchronize blocks across a broadcast network. Users currently need a good broadband internet connection to run a full node that receive and serve block data, transaction data, and other metadata to peers. The ability for everyone to be able to trustlessly and privately download the entire blockchain from peers and validate the entire history is one of the core value propositions of Bitcoin. This would be unsustainable especially for the populations that are most in need of Bitcoin in developing countries.

The promoters of Litecoin lie about all of the facts presented above. Does Charlie know what he’s doing?

This blog post is not meant to pick on Litecoin and Charlie Lee specifically, it is meant to highlight that altcoins like Litecoin are essentially social trojan horses. They are marketed as a legitimate alternative to Bitcoin, but they are not alternatives to Bitcoin. They cannot become a viable store-of-value, and therefore cannot be reliably used for low time-preference capital formation which is a fundamental building block of capitalism and social scalability.

If Bitcoin were to be supplanted by any altcoin, then “crypto” would be a never-ending game of financial musical chairs where new chairs are constantly introduced and people would need to rotate value from one network to another depending on the way the wind blows in the social sphere on a particular day.

Hal Finney pointed this out in May 2011.

“Any successful replacement of the Bitcoin block chain will forever undermine the credibility of any successor. How is an investor to know that it won’t happen again?” — Hal Finney, May 2011

This blog post was inspired by hundreds of shitcoins, as well as the popular piece by Michael Goldstein titled ‘Everyone’s a Scammer’.

Note: Lightning is currently in beta. This guide will show you how to use two wallets from different developers on your mobile Android phone simultaneously to become a Bitcoin power user and obtain the best experience

In this guide you will install Samourai Wallet and Bitcoin Lightning Wallet.

The purpose of using Samourai is because it supports every address format for sending and receiving, and is perfect for pairing with BLW in order to have all the features you need for both good UTXO management and power user functionality in a mobile Lightning wallet.

Samourai has a number of great privacy features such as Ricochet and the ability to do reverse coin control, so it is generally a good wallet to have in your arsenal. It also gives you the ability to send and receive to every Bitcoin address format. BLW on the other hand only supports bech32 addresses (native P2WPKH are the least expensive UTXOs to spend). Since bech32 is supported by Samourai, you will be able to send BTC to your Bitcoin Lightning Wallet.

Also Read: Best Bitcoin Hardware Wallets

OpenNode is a web-based point-of-sale platform that supports Lightning and has no fees for accepting LN payments. If you withdraw BTC using LN they also charge no fees. In this guide, you can use OpenNode for testing mainnet LN wallet payments and withdrawals with Bitcoin Lightning Wallet, or services such as Y’alls and LightningSpin.

👇

Step 1: Install Samourai Wallet and Bitcoin Lightning Wallet

Step 2: Setup your SamouraiWallet:

• Start your new wallet by creating a passphrase using the BIP39 spec. You will need this passphrase along with your 12 word seed phrase to recover your wallet.
• Skip making a PayNymID (you can do it later)
• Set a pin code for opening your wallet
• Go to Settings with the three dots → Wallet → Show mnemonic.
• Write down your 12-word seed mnemonic
• Now you are ready to start sending and receiving with your Samourai Wallet

Step 3: Receive coins to your SamouraiWallet

Click on the blue circle (+) on the main wallet screen. Then click Receive to generate an address to send Bitcoin to.

For receiving Bitcoins to your wallet, SamouraiWallet allows you to generate bech32 addresses, as well as P2SH or P2PKH addresses (1 or 3). You can also send to Bitcoin Lightning Wallet no matter what inputs (UTXOs) your wallet uses.

Once you’ve received some BTC to your SamouraiWallet, then you will send some over to your Bitcoin Lightning. Let’s go ahead and setup BLW.

Step 4: Setup Bitcoin Lightning Wallet with ‘New Wallet’.

Follow the instructions and write down your mnemonic seed phrase. You’ll see that BLW uses the Bech32 addresses for receiving BTC on-chain, which SamouraWallet can send to. There’s basically two different address formats from most user’s perspectives, there are regular addresses and bech32 addresses. Regular addresses can start with a 1 or a 3 and contain a mix of numbers, and upper case and lower case letters.

The second type, bech32 addresses start with bc1 and use a mix of lower case letters and numbers. Because they do not contain a mix of upper case and lower case, they are considered ‘human readable’ — as they can be read over the phone or radio easily. Underneath the QR code you can see the example of a bech32 address the wallet generated for receiving funds:

bc1qax4r46cmkfzd4lh2c7mehy0dh9n0054dsrl8ha (please do not send anything to this address unless you want to consider it burned bitcoins)

After that, you can generate a receiving address such as the one above and send to it from Samourai. Once your transaction is confirmed then you can open a channel.

Step 5: Open a Channel

Before you can spend on the Lightning Network, your opening transaction will need 3 confirmations. When you go to open a channel, the wallet recommends using the ACINQ node, because it supports receiving payments as well. Check out 1ml.com to find other good nodes, such as the Lightning Power Users node run by Lightning application developer Pierre Rochard

Generally, mobile users won’t need more than one or two channels, but you do have the option to open as many as you want. I’d recommend starting with one large channel to ACINQ node, such as $25, just to start playing with Lightning, and from there you can open another channel if necessary directly to a service you think you might use frequently.

Step 6: Make some payments

You’ll need to make some payments, or use a service such as zigzag.io to create incoming channel liquidity before you can receive LN payments. The easiest thing to do is just pay a few satoshis to test something like yalls.org, or go buy a gift card at Bitrefill.

Where LN really shines is in the sub-$100 payments. It is in this range where the majority of Lightning channel liquidity will be, at least until the price of Bitcoin rises which has an exponential liquidity growth effect on the Lightning network.

Now, you can go play some games over at LightningSpin or create an invoice with OpenNode, or send me a tip: https://tippin.me/@BrickstringTech

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Bitcoin & LN on Mobile Android — Using the Bitcoin Lightning Wallet to make LN payments was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.