November 28, 2017
By Michiel Mulders - November 27, 2017 (bitcoinmagazine.com)
There is no disputing the fact that the Bitcoin network has scalability problems. Micropayment channels are a solution to increase the transaction rate and speed. Yet, this is not the golden solution. This micropayments solution needs a fixed amount of funds to be locked into each channel’s multisignature wallet and requires a transaction for each channel creation and closure. This hinders the Blockchain network from upscaling to a global payment system because Bitcoin’s capacity is limited.
A recently published research paper by a university in Zurich suggests implementing a new layer in between the blockchain and payment channels that enables off-blockchain channel funding to reduce stress on the Bitcoin blockchain.
The paper mentions two challenges: “Micropayment channel networks create new problems, which have not been solved in the original papers. We identify two main challenges — the blockchain capacity and locked-in funds.”
Before we go any further into this proposed solution, it is essential to understand the concept of micropayment channels. Bitcoin’s blockchain network doesn’t allow you to send many micropayments of tiny amounts of bitcoin. Bitcoin’s block weight limit caps this at less than 10 transactions per second, on average.
Payment channels let users lock up a fixed amount of funds in a multisignature wallet controlled by the client and receiver. A channel can be opened by sending a transaction to the blockchain. Next, an unlimited amount of payments can be made between the client and receiver. These payments are performed off-chain and only exist between both participants.
Once a channel is closed, a final transaction containing end balances will be sent out to the Bitcoin network. This is the base implementation of micropayment channels; a more evolved implementation is the lightning network, which allows bidirectional payment channels.
Reducing many hundreds, thousands or even more transactions to just two transactions per channel are a drastic improvement. Still, it is not enough for bringing the Bitcoin network to the level of a world-wide payment system. A channel can only exist between two participants. So, if each person in a group of 20 wants to open five channels, this will require a lot of transactions — 200 to be exact. Besides that, there is no solution for when the amount of locked funds is exceeded for a specific channel.
The paper tells us about a new layer: “We introduce a new layer between the blockchain and the payment network, giving a three layered system. The new second layer consists of multi-party micropayment channels we call channel factories, which can quickly fund regular two party channels.”
The paper suggest a three-layered system in which the first and third layers already exist. The first layer locks the funds, and the third layer performs the actual transfers of currencies. The new second layer can be seen as a channel factory. It is responsible for creating multi-party micropayment channels and quickly refunding wallets when they are almost depleted. The paper calculated a savings of up to 90 percent for a group of 20 nodes with 100 channels in between them.
Instead of sending a blockchain transaction for each channel creation or closure, the paper suggests a system where just one transaction is needed to open multiple channels without further blockchain contact. Funds are locked into a shared wallet between a group of nodes instead of a specific channel. Furthermore, funds can be moved between groups with just an attached message with further details such as a receiver address. All of this happens off-blockchain.
The only addressed risk is that a user within a group can close the channel factory: the second layer. This induces a higher mining fee because more blockchain space is used. While this is not a big risk — a user won’t gain personal advantage by doing so — it does limit the usefulness of large groups.
Next, it is possible that the receiver doesn’t sign a transaction. The paper introduces the use of either timelocks or punishments for dishonest parties. They will focus on timelocks because they think it performs much better. After a timelock has elapsed, the current status of the channel will be broadcasted to the blockchain and the channel will be closed; no punishment is applied.
There is no risk in securing the funds. The multisignature wallet has a many-to-many constraint containing all signatures of the involved actors. Funds can only be spent when all actors have signed the transaction, so no one can be deprived of funds without signing for it themselves.
November 08, 2017
Scaling Bitcoin 2017 - Science is central in Stanford (and the politics ignored). Fourth edition of the Scaling Bitcoin Conference.
By Aaron van Wirdum, Staff Writer - November 08, 2017 (bitcoinmagazine.com)
Stanford University hosted the fourth edition of the Scaling Bitcoin conference over the weekend of November 4–5: “Scaling Bitcoin 2017: Scaling the Edge.”
The annual conference, sometimes referred to as a “workshop,” has in its short history grown into somewhat of an institute within the Bitcoin space. It aims to be the main stage for Bitcoin’s technical and academic communities, with little room for commercial interests — and perhaps even less for the “scaling drama” that has grown to be the norm online.
“This is the place where we want to focus on engineering, not politics,” said Anton Yemelyanov, this year’s planning committee chair, as he introduced the event on Saturday morning. “We want everyone to have objective discussions from an engineering standpoint.”
Scaling Bitcoin Within the Scaling Debate
Scaling Bitcoin has a short but potent history.
The first two conferences were hastily organized one after the other in the second half of 2015, both in direct response to the new-at-the-time block size limit dispute and a looming hard fork through Bitcoin XT. The Montreal edition, the first of the two conferences, was instrumental in bringing together Bitcoin’s technical community, which had up until that point mostly communicated through chat channels and mailing lists. And the second edition in Hong Kong introduced Bitcoin’s mostly Chinese mining community onto the stage for the first time, quite literally. Faced with a contentious hard fork, the events were instrumental in building community among developers and across continents.
And the conferences proved pivotal in averting the crisis — at least temporarily. Hong Kong saw the introduction of Segregated Witness, presented by Blockstream engineer and major Bitcoin Core contributor Dr. Pieter Wuille. This innovation was included as a centerpiece in Bitcoin’s scaling roadmap, proposed by Blockstream CTO and Bitcoin Core maintainer Gregory Maxwell right after the conference, and was endorsed by large parts of the Bitcoin ecosystem. It finally activated on the Bitcoin network this summer.
Now, two years and three Scaling Bitcoin conferences after the Montreal edition, another controversial hard fork looms. BTC1 — maintained by former Bitcoin Core contributor and Bloq CEO Jeff Garzik — is scheduled to hard fork next week as per the New York Agreement in order to double Bitcoin’s block weight limit — an effort dubbed “SegWit2x.”
Yet, this upcoming hard fork did not demand much attention in Stanford. Apart from subtle remarks buried throughout some of the talks, the topic of SegWit2x was almost completely absent from the Scaling Bitcoin program. Illustratively, Bobby Lee, CEO of BTCC and one of the few outspoken SegWit2x proponents on stage, even refused to take any questions on the hard fork after his invited talk — instead focusing on Bitcoin’s meteoric price rise over the past years.
The Talks and the Science
Scaling Bitcoin instead continued on the path set out last year at the third event, hosted in Milan. With a broader scope than scaling alone, privacy and fungibility were prominent topics, while smart contracts, fees, mining and more were part of the program as well.
Perhaps the biggest innovations presented throughout the weekend, at least within the realm of features that could feasibly be implemented on Bitcoin without rigorous protocol changes, were presented by some of the veterans (by now) in the space.
Tadge Dryja, co-author of the lightning network white paper and currently employed by the MIT Digital Currency Initiative, presented “Discreet Log Contracts.” If the math checks out like he thinks it does, these could effectively realize trustless oracle systems, arguably offering a superior (being simpler) alternative to the bulk of advanced smart contracts. Put bluntly, some think these kinds of solutions could make resource-intensive systems like Ethereum obsolete.
Along similar conceptual lines, Blockstream mathematician Andrew Poelstra presented “scriptless scripts.” Utilizing clever cryptography — specifically, signature aggregation — smart contracts could be anchored into a basic blockchain without needing to embed the entire smart contract code itself. Originally designed for the Mimblewimble protocol, the concept could be leveraged by Bitcoin, too.
And speaking of veterans in the space, Nick Szabo — partnered with (among others) Bloomberg contributor Elaine Ou — presented his proposal to broadcast Bitcoin transactions over radio waves. Not so subtly referencing China’s recent crackdown on Bitcoin, the two detailed how Bitcoin could travel around the globe (and over the great firewall of China) without so much as needing an internet connection.
When the topic of Bitcoin’s block size limit — the “original” scaling issue that spawned the conferences — came up at all, it was mostly in the context of propagation speed. Perhaps no coincidence, the two most relevant presentations on this topic were based on work by some of the people involved with previous hard fork attempts. The Bitcoin Unlimited team presented their test results on the “Gigablock” network, which they believe safely supports blocks that exceed current limits by several orders of magnitude. And UMass Amherst professor Brian Levine presented the “Graphene” block propagation protocol, co-designed by Bitcoin’s former lead developer Gavin Andresen.
To the extent that next week’s hard fork was discussed, Anthony Towns’s presentation probably came closest. Towns detailed how support for future protocol changes could be cleverly determined through market dynamics. Though, while interesting, this type of solution will not be ready in time for the SegWit2x hard fork.
The Hard Forks and the Politics
Indeed, in contrast to some of the previous events, a sense of urgency was mostly absent in Stanford.
This could be in part because most of Bitcoin’s technical community has by now roughly settled on a path forward — and SegWit2x is no part of it. Similarly, the question is not so much whether Bitcoin will scale predominantly through second layers; for them, at least, it will. Rather, topics of research now focus on how these second-layer technologies can be optimized for performance, privacy and more.
Additionally, as a somewhat loosely organized volunteer effort, the team overseeing the conferences consists of slightly varying people from one event to the next. And resulting from a difference in vision for the 2017 edition, some of the earlier organizers as well as a segment of Bitcoin’s technical community were absent for this round.
Perhaps as a result, the sense of community building typical for some of the previous events was not as prominent in Stanford. And the question of how to deal with a looming contentious hard fork was a more central topic at the similar but more informal Breaking Bitcoin conference in Paris several weeks ago. In little over two years, Scaling Bitcoin instead transformed from what is best described as an emergency summit to something perhaps more akin to a regular academic conference — even though an emergency summit would not have seemed entirely inappropriate at this point in time.
October 13, 2017
By Aaron van Wirdum, Staff Writer - October 13, 2017 (bitcoinmagazine.com)
Today, Scaling Bitcoin, the international engineering conference focused on Bitcoin and blockchain research, released its program for the 2017 edition. The conference, to be held in Stanford, California, in the first weekend of November, will also introduce a new side event this year: Bitcoin Edge, a bootcamp for starting Bitcoin developers.
“The program is extremely interesting because it delivers cutting edge research on different blockchain scalability approaches, fungibility, consensus, data propagation, alternative techniques for handling blockchains and many other topics,” said Anton Yemelyanov, chair of the Scaling Bitcoin Planning Committee.
Scaling Bitcoin Stanford
After events in Montreal, Hong Kong and Milan, the fourth edition of the Scaling Bitcoin conference is taking place at Stanford University on November 4 and 5 of this year.
Where the first two editions of Scaling Bitcoin were mainly focused on scaling and scalability, the third edition broadened the scope of the conference to include a more diverse set of topics. This trend will continue in Stanford, where talks will range from highly technical topics concerning privacy and fungibility, to fee markets and fee estimation, censorship resistance and more.
“Bitcoin is the origin of all distributed ledger technology,” said Yemelyanov. “Scaling Bitcoin has been fortunate to act as a vehicle for bringing the audience technologies such as Segregated Witness and MimbleWimble, all of which have been adopted or incorporated into various blockchain projects. We hope that other material presented by our participants will be of similar value and help the industry advance the research and development of blockchains.”
Yemelyanov added that another key goal for Scaling Bitcoin conferences is to bring engineers and other technical minds together in a physical space where they can discuss their work in person.
“It is through collaboration where a lot of ideas are born and have potential of becoming reality,” he said.
Bitcoin Edge Dev++
In addition to the conference itself, Scaling Bitcoin is also introducing a two-day technical bootcamp for experienced developers getting into Bitcoin: Bitcoin Edge.
This nonprofit initiative is an effort to help scale the development capacity of the industry, Yemelyanov explained:
“One of the approaches of helping the industry scale is to scale the much needed development capacity of the industry. There is a clear talent deficit and we are trying to help all industry participants by running a nonprofit workshop that will allow developers to gain complete understanding of primitives that comprise Bitcoin and blockchains in general and be able to start working in this field.”
Bitcoin Edge will be led by well-known Bitcoin developers and academics Anditto Heristyo, Ethan Heilman, John Newbery, Karl-Johan Alm, Nicolas Dorier, Thaddeus Dryja and Jimmy Song. They’ll introduce participants to a range of technical Bitcoin-related topics, including Elliptic Curve cryptography, transaction structures, difficulty calculation and adjustments, and much more.
This workshop will take place on the November 2 and 3. For more information on the Bitcoin Edge initiative, visit bitcoinedge.org.
See here for the full Scaling Bitcoin Stanford program.