Jack of All Trades @Blockchair ⤶ Chief Troll Officer @Trollbox ⤶ Goodies: https://xitter.cf/t.co/scb6glqOgc · https://xitter.cf/t.co/Q1tnBu3f4e · https://xitter.cf/t.co/QU2JSi8Ne3
Joined April 2008
- Tweets5.9K
- Following243
- Followers11.7K
- Likes7.2K
Pinned Tweet
BIP-54 is being pushed so much by Bitcoin Core for one simple reason: the "timewarp attack" is not an attack but, if coordinated correctly by miners, a potential scaling solution that Bitcoin Core is afraid of.
With enough miners on board (my calculations show that around a 90% supermajority is required), it's possible to "trick" Bitcoin's clock into ticking N times faster in a stable (!) way.
So, instead of blocks coming up every 10 minutes on average, they could come up, say, every 5 minutes, doubling the throughput and improving the user experience.
Yes, this may have the side effect of the block subsidy running out a bit faster, but considering that Bitcoin's already got a security budget issue, this would be a) a nice instant temporary remedy, and b) a long-term solution due to the possibility of collecting more fees thanks to the increased throughput.
The "timewarp attack" vector by itself is purely theoretical nonsense. It either requires a 51% majority that would orphan "non-participating" blocks or a 90% supermajority. It's visible on-chain and requires weeks to get activated. So, "remaining block subsidy could be mined in roughly 40 days" is a bogeyman. A quick reminder: Bitcoin requires at least 51% of its miners to be "honest". Otherwise, it simply doesn't work, and a "timewarp attack" would be the least of our concerns in case of a 51% attack.
Okay, back to scaling! Best thing about this approach? It doesn't require any kind of fork: neither hard nor soft. The possibility is already in the code. Considering that Bitcoin has huge issues with upgrades, it can be the last chance to actually scale Bitcoin.
Instead, Bitcoin Core wants to remove that possibility. Why? Because they still push for their defunct Lightning. Who are the authors of BIP-54? @darosior who works for Chaincode Labs and @TheBlueMatt who is a Blockstream co-founder. A clear conflict of interest to benefit Lightning.
@foundryservices, @AntPoolofficial, @f2pool, @ViaBTC, @SpiderPool_com, @MARA, @luxor, take notes!
Do I need to spin up an explainer website with details and charts? 🤔
Had the funds been "stolen", though? What happened to the "code is law" mantra which Blockstream was in love with so much?
The "hacker" simply made a transaction which turned out to be a valid one under Liquid's own consensus rules: they created new L-BTC and then withdrew them. They didn't "steal" anyone's coins.
Many people, including me, have been warning that Blockstream developers are incompetent for years. They took the risk of using their product and got a haircut. Sounds fair to me 🤷♂️
To those responsible for the theft of bitcoin from the Liquid Network:
Blockstream will not pay a ransom for the return of stolen funds. Taking assets without authorization and withholding their return is a crime, not responsible disclosure. It is not white-hat activity. It is theft.
We have engaged in good faith in an effort to secure the return of stolen user funds and protect the broader Bitcoin community. That effort should not be mistaken for acceptance of the actions taken nor of the terms being demanded.
We will not be a party to the precedent that open-source software developed for the good of the Bitcoin community should subject its developers to paying a ransom that far exceeds their economic participation.
Bitcoin is hard money and can’t be minted without costs, Bitcoin doesn’t haircut users to pay a ransom.
To the Bitcoin community:
We are fighting for what we believe in, for the users whose funds were taken, and for the principles on which Bitcoin was built.
The community has demonstrated incredible resolve with teams of people dedicating their time in support of each other to identify and patch vulnerabilities in each other's products and systems. We are all driven by the mission that Bitcoin is the single best asset, for every person, company, and institution on the planet to invest, use, and build on. The world is a different place with the advancements of AI, and the Bitcoin community has responded with force to combat that threat.
Damage has been done, battles have been lost, but on the whole the Bitcoin community is gaining ground in the war with bad actors.
We want to thank the community for those efforts, for your support in hardening the network, helping users recover funds, and for your support in our assertion that crime does not deserve rewards.
To those holding the stolen bitcoin:
There is still an opportunity to resolve this responsibly. The bitcoin can be returned and we can revert to the standard of white-hat principals.
However, if the funds are not returned, we will pursue every lawful avenue available to us. We will work with law enforcement, exchanges, service providers, forensic specialists, and other relevant parties to trace and recover the assets and identify those responsible.
More importantly, Bitcoin is transparent by design and the community is made up of the most sophisticated engineers, cryptographers, and white-hat hackers globally. Transactions do not disappear, and neither does the evidence they leave behind.
We will not pay for the return of stolen property. We will not abandon our users. The Bitcoin community will not stop pursuing the funds.
Return the bitcoin.
Just for the record: I'm obviously not arguing that "stealing" L-BTC was a moral thing to do, but there's a huge but.
Blockstream blokes and their fans are the ones who've been preaching "code is law". It was them who were calling Ethereum a "centralized shitcoin" for reverting the DAO hack back in 2016 and supporting Ethereum Classic for "doing the right thing".
If you preach "code is law" (which is a valid thing to do, I'm not saying this is wrong!), you're taking the risk that the code you're using may be buggy, and you deem that risk lower than the risk of centralized actions such as rollbacks. It's a trade-off!
But saying that "reverting the DAO hack" was bad while at the same time saying "meh, L-BTC thing was a theft, not a bug, so return the coins or we call the FBI" is hypocrisy. xitter.cf/csuwildcat/status/2098…
I'm disgusted by many of the replies. People saying "code is law, so it's fair game to steal 600 bitcoin" are amoral weirdos. If their home had a lock w/ buggy firmware that allowed thieves to loot it, then the thieves returned some of their possessions after they begged, but kept a lot of their property, I bet your ass these goofballs wouldn't be like "Hurr derr, code is law, so it's my fault thugs used a code bug to get into my house and steal my stuff. They aren't criminals, they're 'whitehats' I must respect and thank for returning some of my things after I begged them". Get the f*ck out of here, you spineless, morally bankrupt goofballs. Thieves deserve to be hunted, beaten, and made an example of, not lauded as noble actors.
Bitcoin users are not affected 🥳
We are aware of a security incident on @Liquid_BTC. Purported white-hat hackers have withdrawn ~4,000 BTC (~$320 million) from the Liquid Federation wallet. The @Blockstream team is working on contacting them on-chain with a signed message.
What we know so far is that the funds were withdrawn via the SideSwap PAK (Peg-out Authorization Key), but that key was not compromised, nor were any others.
Exchanges have been notified and have already paused (or will pause) LBTC deposits and withdrawals. Other Liquid assets such as USDT, DePix, and RWAs are unaffected by this security incident.
Bridge nodes have been temporarily disabled, so no new transactions can be submitted to the network. Effectively, the Liquid sidechain is paused until this issue is resolved.
Liquid wallets will be impacted, and we're sorry for any inconvenience. Federation members are actively working on resolving this so we can restore normal network activity.
You can monitor the situation via @mempool's liquid.network site below:
mempool.space/address/bc1qdl…
Yeah, thanks to Bitcoin Core, the security budget issue is already here, and Bitcoin will have to face a choice: either a block size increase (nope) or this… So, bye-bye, 21-million-coin cap 👇
Uhmmm… "thErE iS nO SecuRiTy BudGeT iSsuE" 🥱
A bitcoin miner just switched off every single one of its US bitcoin mines.
Keel, the company that used to be called Bitfarms, sold 1,085 bitcoin for $75 million. The buildings are becoming AI data centers now. Revenue fell 50%.
What security budget issue? Where? That's all FUD! xitter.cf/blackbeardXBT/status/2…
What I've never understood about forking away (this applies to Bitcoin Cash in the same way as it does to Bitcoin Luke): yeah, you fix some surface issue (too little spam, too much spam, whatever), but you still end up inheriting the underlying issue, which is governance 🤔
My point here is that if you believe that the old chain has got "captured", how does creating a new PoW fork help? Yes, it will have the feature you wanted, but at some point in time, if your new chain becomes super popular, it will get "captured" once again 🤷♂️
"Some of our main donors: the Ethereum Foundation, Optimism’s RPGF, Octant, Arbitrum DAO, Rocketpool, Gitcoin."
While the real solution to Ethereum's inflation is taxing L2s, it's no surprise that L2s and their investors finance the plan to nerf validator rewards instead 🥱
july 14: eip-8363 created
july 23: ethcoordinate.org registered
august 4: eip pull request opened
august 5: jerome requested hegota pfi slot
august 6: it received a substantial 30min acdc agenda allocation
august 10: ethstaker community surprise rebranded into ethcoordinate, headed by nixo, who received an "opinionated allocation" from protocol guild for her acd role
august 11: eip merged as draft and ethcoordinate publicly launched, with its mission almost ideally matching the issuance agenda
Didn't that age well?! bjr 🤪
Bitcoin Knots is a fully verifying implementation of Bitcoin.
It is NOT an altcoin like bcash or bsv.
The project's goal is to be the best possible #Bitcoin full node for both newbies and power users, for miners, users, and businesses.
Not a word here on the actual problem, which is corporate L2s leeching fees from Ethereum 🥴
Had L2s not happened, Ethereum would've still been "ultrasound" money.
Just make a guess at exactly which point Ethereum pivoted towards these L2s on this chart: 🤦♂️
My thoughts on issuance:
1. the problem is real
2. the direction of the EIP is valid
3. but: changing issuance also has major downsides
4. most importantly: the decision must be with the community
I said a few words on the ACD call on Thursday, and wanted to expand on my thinking - both as Ethlabs co-founder and ACD moderator. In general, being able to have difficult conversations in public has always been a core strength of Ethereum.
1. The problem is real
- Slashing is core to Ethereum’s security. Not all attacks are automatically slashable. E.g. a majority of validators could censor the chain through malicious attesting. It needs to always be credible to slash such attackers. The larger portion of ETH is staked, and the tighter staked ETH is integrated into DeFi, the more credibility of slashing is at risk.
- Worse dilution for stakers: at low stake %, most rewards are real income. At high stake %, most rewards just offset dilution.
- Economies of scale: The competitiveness gap between centralized staking providers and both solo stakers and more decentralized staking providers widens at higher stake rates.
- Narrative confusion around ETH: ETH is a “productive asset” due to protocol revenue (fees & MEV), not staking yield. The staking yield also risks crowding out the emergence of other (productive) yield opportunities for raw ETH.
- Worse dilution for raw ETH holders: In general, harder assets are more attractive. BTC as the only $1T+ digital store-of-value explicitly centers zero long-term supply growth as its value proposition. Counter point: Gold with 1-2% yearly supply growth has a $30T store-of-value market cap.
2. The direction of the EIP is valid
- If one wants to limit the stake rate, the issuance curve needs to bend downwards for high stake %. The EIP is a specific instance of such a curve.
- The EIP also includes a further issuance reduction as a second phase. This introduces minimum viable issuance (MVI) as a secondary, monetary objective of the EIP. I personally think that is reasonable, but these two aspects should be discussed and reasoned about separately.
3. Changing issuance also has major downsides
- The decentralization of the staking set is crucial for Ethereum’s health. Many solo stakers are less economically competitive than large operators. A change that results in a significant drop in staking yield risks having these solo stakers disproportionately leave the staking set.
- Staked ETH is tightly integrated into DeFi today, both directly though LSTs, and through raw ETH lent out for the purpose of staking. Any major reduction in staking yield thus risks disrupting a core part of DeFi. This effect is worse the more rapid and more significant the yield drop is.
- Any change to Ethereum’s monetary policy resets the “monetary policy ossification clock”. Predictability of supply matters for ETH’s attractiveness as store-of-value. So far, changes are only ever towards issuance reduction, but will investors trust that that will hold true forever?
- Ethereum is overall at a pivotal moment. Given the large social cost of any months-long debate on issuance, it is reasonable to argue that this should wait until Ethereum overall is in calm waters, even if it makes a decision at a later time more painful.
4. The decision must be with community
- Most hard fork decisions are made by the allcoredevs (ACD) governance process. Conceptually, this is “delegated authority” by the community to the core devs. This delegation is very effective on most technical topics. For the occasional hard fork decision that is not primarily technical, this setup is however less well suited.
- Issuance in particular is not a technical decision. The decision still needs to be anchored to the ACD process - core devs need to coordinate on what to implement - but the actual decision forming needs to happen on the community level.
- This is easier said than done. The ACD process is flawed but well defined. A “community decision” is much fuzzier and harder to operationalize. Discussion venues like X are important, but also limited. How to have high quality community-wide discussions remains an important challenge to solve.
As we are getting off the ground at Ethlabs, we are trying to find the right path for how to contribute to both Ethereum and ETH. Issuance is a tricky topic for us: Caspar and I have argued for issuance changes in the past, and for now continue to have conviction in that path. The Ethlabs team as a whole has a wider spectrum of opinions, which has been healthy for internal discourse. And of course, we also see the broad community skepticism on this topic. The ability to have difficult conversations has always been a core strength of Ethereum. Our role in that should be to productively contribute to and engage with such conversations, not to blindly run in one direction. We will iterate to get that balance right, and genuinely appreciate feedback as we do.
"What changed between 2017 and 2026?"
Nothing has changed between 2017 and 2026. It's just that some people like this guy were fooled into believing that a block size increase was "an attack on Bitcoin", so they cheered on what happened in 2017.
"Node runners" never had a say.
I fully accept what happened yesterday. It is sad, I will admit that. But it also feels like a catharsis.
BIP-148 is celebrated as Bitcoin Independence Day, because it proved that ordinary users, running nodes in their homes, could force the most powerful mining cartels and corporations in the industry to back down. The users had no hashrate, no exchanges, no lobbyists. They had conviction and they had nodes, and that was enough.
BIP-110 ran the same play with the same conviction, a reasoning that was shared by all bitcoiners five years ago (Bitcoin is money and not a grift database), and node support at levels at least comparable to 2017. This time the miners and the corporate layer simply refused to follow. They extended their spam-friendly chain and moved on like nothing happened.
Remember yesterday as Bitcoin Dependence Day.
What changed between 2017 and 2026?
Not the users. They showed up with the same fire.
What changed is everything that grew in the years between. ETFs. Treasury companies. Custodians holding millions of coins for people who will never touch a node. Hashrate concentrated into a handful of pools building templates for the whole world. Capture of the governance of the reference implementation resulting in stark philosophical pivot.
Those already celebrating Bitcoin Dependence Day are not simply cheering an outcome they won. They are treating evidence that miners and the corporate layer now control Bitcoin as if it were a grand cypherpunk victory, while ridiculing the people who fought for decentralization and for Bitcoin as money.
In my opinion, and in my heart, legacy Bitcoin is not what I signed up for. Captured. Centralized. Led by suits.
No longer about freedom, sovereignty, or the mission of separating money from state.
No longer about the things that made me a ride or die bitcoiner for many years.
The fire that originally drew me to Bitcoin is still alive in the node runners who supported BIP-110. I will follow it where it goes.
As for legacy Bitcoin, I have no interest in it anymore as a freedom project. In my mind, it is now a stock.
Nikita Zhavoronkov retweeted
Why is the security budget issue such a taboo topic?
My guess is that the laser-eyed maxis don't discuss it for one simple reason: in their world, Bitcoin is perfect and most certainly can't have a fatal flaw. They don't believe any issue exists.
The bankster sharks on top of the maxi pyramid, obviously, do know it exists, but they're good with that because either a) the depleting budget cripples Bitcoin, which is their actual goal, or b) they have a "solution" to the budget issue, which is a state-level bailout. Win-win.
A simple example of such a "solution": subsidize the miners, and in return they will filter some transactions or addresses, so the state gets to impose compliance procedures or whatever.
Mhm, but one could've learnt that from reading the whitepaper 🥴
"Proof-of-work is essentially one-CPU-one-vote."
"They vote with their CPU power, expressing their acceptance of valid blocks by working on extending them and rejecting invalid blocks by refusing to work on them."
Nothing in there about running a non-mining node or wearing a fancy hat! 🤠
And that's exactly why all those who were in charge of wearing UASF hats actually went to China first thing to convince miners not to accept a block size increase 🥴
One inadvertent but good effect from BIP-110 is that at least some bitcoiners have now finally realized that "UASF" is a totally fake concept.
SegWit was not a UASF. And it was not about the hats. But what they have to also realize today is that they've been fooled to believe that the hats work. Well, technically, they do work, but only when worn by the right people, not "ordinary users" 🤷♂️
The entire BIP-110 drama is just a huge psyop: a distraction from the real problems Bitcoin has.
There's no "Core vs. Knots" or "Spammy vs. Pristine chain". Both "options" are 1) not solving the security budget issue, 2) not helping to scale Bitcoin, 3) making no progress wrt quantum, or vaults, or whatever.
Luke is literally one of the Blockstream co-founders and all these blokes get their money from the very same source. This is all just a big fake play. Both Core and Knots are anti-Bitcoin. No new features or ideas except for "how to cripple Bitcoin more".
Choose wisely 🤔
Ethereum overlords keep doing one thing: instead of taxing L2s they're punishing L1 validators and eroding security. Why? Because they're invested into L2s and financially incentivized to do so 🤦♂️
In a system where decentralized validators should have a say, they don't. First, the developers prioritized L2s. That resulted in transaction fees moving there: Ethereum ceased to be "ultrasound money", and the inflation rate spiked to compensate for the lost fees. And now this: "let's strip validators of their rewards, so we resurrect the ultrasound narrative and earn on that".
The common major issue with cryptos is that they're governed by developers, and their motivation is not aligned with the overall well-being of the systems they govern. It's all the same for Bitcoin, Ethereum, Monero, and whatever else.
🚨 New EIP: Tapered Issuance Burn
We just submitted an EIP to ethereum/EIPs: a minimal, market-driven fix to Ethereum's issuance policy removing the incentive for stake growth beyond 50% of ETH supply.
EIP-8361 by @pintail_xyz, @jdetychey, @dapplion, @pa7x1, @ladislaus0x & @drakefjustin 🧵