Bitcoin Scaling Agreements – Hong Kong Consensus vs New York Consensus

TheMerkle Bitcoin Scaling NY HKOver the past year and a half, we have been multiple “agreements” to make Bitcoin scale. Two of the agreements that stood out are the Hong Kong agreement, and the one recently formed in New York. Both of these proposals highlight some interesting aspects of making Bitcoin scale. It also goes to show how some things have changed, whereas others virtually remain the same. 2. Hong Kong Consensus Agreement of 2016 A lot of Bitcoin enthusiasts were taken by surprise in February of 2016. All of a sudden, a Medium post was published regarding a consensus to make bitcoin Scale.

TheMerkle Bitcoin Scaling NY HK

Over the past year and a half, we have been multiple “agreements” to make Bitcoin scale. Two of the agreements that stood out are the Hong Kong agreement, and the one recently formed in New York. Both of these proposals highlight some interesting aspects of making Bitcoin scale. It also goes to show how some things have changed, whereas others virtually remain the same.

2. Hong Kong Consensus Agreement of 2016

A lot of Bitcoin enthusiasts were taken by surprise in February of 2016. All of a sudden, a Medium post was published regarding a consensus to make bitcoin Scale. It was decided Segregated Witness development would continue as a soft fork, with the release scheduled to take place in the months afterward. That is what happened exactly when the signaling for SegWit began on the Bitcoin network.

Moreover, the agreement revolved around working with all Bitcoin developers to create a safe hard fork based on SegWit improvements. As part of this hard fork, new features would be introduced. Such changes include the increase of non-witness data to 2MB. However,  this hard fork would only be adopted if there was a broad support across the entire Bitcoin community. Fast forward to today, and this hard fork is now scheduled to activate on or before July 31st of this year.

Perhaps the most interesting part was how all parties agreed to run Bitcoin Core-compatible consensus systems. Things have changed a bit since then, with various of the companies signing off on this agreement switching to support Bitcoin Unlimited a few months later. Among the companies initially signing off on this agreement were Antpool, Bitmain, OKCoin, and Huobi.

1. New York Agreement of 2017

It is evident a lot can change over the course of 15 months. The new Bitcoin Scaling Agreement put together in New York this year revolves around activating SegWit at an 80% threshold. Additionally, the 2MB hard fork will follow within six months after the successful activation of Segregated Witness. On paper, this agreement followed the exact same path as the Hong Kong agreement a year prior.

One thing that stands out is how it was initially expected SegWit would reach a 95% activation threshold with ease. That was never a possibility, to begin with whatsoever. Lowering this threshold makes a lot of sense, albeit 80% is still quite high. Then again, this agreement was signed by 58 companies who represent 83.28% of the total hashing power at the time. Among the companies supporting it were Bitmain, BitFury, F2Pool, Purse, and ViaBTC.

Fast forward to today, and we are on the brink of seeing two competing scaling solutions activate on the network in quick succession. On the one hand, we have the Segwit2x proposal, which should reach activation before July 31st. However, there is still a group planning to activate the user-activated soft fork on August 1st. These concepts are not mutually exclusive by any means, but it is doubtful they will both be successful.

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What is Delegated Byzantine Fault Tolerance?

TheMerkle Consensus Delegated Byzantine Fault ToleranceThere are quite a few different ways to power blockchain solutions. Two of the more common types are proof-of-work and proof-of-stake. However, every now and then, we see a new type of algorithm that leaves people confused for quite some time. Delegated Byzantine Fault Tolerance is one of those algorithms very few people can wrap their head around. Now is a good time to take a closer look at what this concept entails exactly. Delegated Byzantine Fault Tolerance is Quite Intriguing Even though some cryptocurrency enthusiasts feel proof-of-work is the “fairest” distribution system for new currencies, there are quite a

TheMerkle Consensus Delegated Byzantine Fault Tolerance

There are quite a few different ways to power blockchain solutions. Two of the more common types are proof-of-work and proof-of-stake. However, every now and then, we see a new type of algorithm that leaves people confused for quite some time. Delegated Byzantine Fault Tolerance is one of those algorithms very few people can wrap their head around. Now is a good time to take a closer look at what this concept entails exactly.

Delegated Byzantine Fault Tolerance is Quite Intriguing

Even though some cryptocurrency enthusiasts feel proof-of-work is the “fairest” distribution system for new currencies, there are quite a few drawbacks associated with this algorithm as well. First of all, it requires a lot of electricity, which is often considered to be wasteful. This is especially true when it comes to Bitcoin mining, as reports indicate the average Bitcoin transaction consumes as much electricity as powering multiple US households. Plus, one needs specialized hardware for proof-of-work distribution, which makes it less fair than one might think.

Proof-of-stake, on the other hand, is an interesting concept. It requires far less electricity, nor does one need powerful computer hardware to participate. However, the wallet staking coins needs to be connected to the internet at all times, which could make it a target for hackers. Moreover, those who own more chosen than others earn more stake rewards. It is not the fairest system either, yet it provides incentives for people not to spend their coins right away.

Although both of these algorithms are widely recognized as being “useful” in the world of cryptocurrency, some developers are looking for even better solutions. It is not hard to come up with a concept which has been tried yet in the world of cryptocurrency. Delegated Byzantine Fault Tolerance is one of those algorithms very few projects actively use, but it certainly has its merits. That is, assuming one implements it correctly.

People familiar with consensus protocols will be aware of the Byzantine Generals problem in Game Theory in Computer Science. Achieving consensus in a decentralized system is far from easy, especially if the users do not trust one another. By using delegated Byzantine Fault Tolerance, the relationship between different blockchain nodes is rearranged. More specifically, the entire network becomes almost invulnerable to the Byzantine Generals problem, while still being able to achieve consensus if malicious node would attempt to cause harm.

To do so, one needs to acknowledge the different entities who make up the ecosystem. On the one hand, there are professional node operators, who run a node as a way to gain extra income. On the other hand, we have the users who want to explore all features a particular cryptocurrency ecosystem has to offer. Acknowledging both groups of ecosystem members is of the utmost importance, especially when it comes to securing an ecosystem.

The consensus part of the Delegated Byzantine Fault Tolerance protocol occurs through a “gamified” form of block verification among professional node operators. All of these professional nodes are appointed by ordinary notes through a delegated voting process. The professional node broadcasts its version of the blockchain to the network. If 66% of the other nodes agree with the information, consensus is achieved. Should this threshold not be met, a different professional node is appointed to broadcast its blockchain version until consensus can be established.

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Charlie Lee Resigns From Coinbase to Focus on Litecoin

Charlie Lee Resigns From Coinbase to Focus on LitecoinFounder of Litecoin, Charlie Lee, tweeted Friday that he will no longer be working for Coinbase. He is leaving the company to focus on his brainchild creation, Litecoin. This news comes as a welcome surprise to the Litecoin community, who are entering into a new stage of maturation, as they recently elected to activate segregated witness.

The post Charlie Lee Resigns From Coinbase to Focus on Litecoin appeared first on Bitcoin News.

Charlie Lee Resigns From Coinbase to Focus on Litecoin

Founder of Litecoin, Charlie Lee, tweeted Friday that he will no longer be working for Coinbase. He is leaving the company to focus on his brainchild creation, Litecoin. This news comes as a welcome surprise to the Litecoin community, who are entering into a new stage of maturation, as they recently elected to activate segregated witness.

Charlie Lee Resigns From Coinbase to Focus on Litecoin
Charlie Lee

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Lee’s tweet read short, but optimistic. He said, “today is my last day at @coinbase! I will miss working with you all. I am going to shift my focus to Litecoin now. To the Moon!” For the most part, this maneuver was unexpected. However, it did end up being a timely consideration for the founder, as the Litecoin ecosystem will be looking to grow and change in the interest of every participant involved.

Litecoin and Lee: To the Moon?

Since the Litecoin ecosystem is yearning for growth and the ability to be more competitive with other cryptocurrencies, Lee’s entrance back onto the scene is an extraordinary event. It is perfect timing. This is especially true since Segwit use is currently being tested. The community may need strong and viable leadership to navigate any troubled waters while the sky clears and the horizon shifts back into focus.

Bitcoin.com covered the ecosystem’s recent move to activate Charlie Lee Resigns From Coinbase to Focus on Litecoinsegregated witness, saying, “The Litecoin community recently formed a round table consensus for activation of the Segwit protocol. Most agreed that turning on Segwit is the correct course of action for maintenance and short-term scalability of Litecoin.”

With this happening, everyone in the community will likely look to Lee for guidance and wisdom. It will be interesting to see where Litecoin goes from here. Could it really be to the moon?

What do you think about Lee leaving Coinbase? Will this bring further improvements to the Litecoin ecosystem? Let us know in the comments below.


Images via Shutterstock and Coinbase.com


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