Bitcoin Explained - The Technical Side of Bitcoin
By Van Wirdum Sjorsnado
Bitcoin Explained - The Technical Side of BitcoinDec 31, 2021
Episode 92: Bitcoin Core 27.0
In this episode of Bitcoin, Explained, Aaron and Sjors explain what new features are included in the upcoming Bitcoin Core 27.0 release.
https://github.com/bitcoin-core/bitcoin-devwiki/wiki/27.0-Release-Candidate-Testing-Guide
===
This episode’s sponsor: CoinKite, maker of the ColdCard
Aaron's Twitter: @AaronvanW
Aaron’s Nostr: npub1art8cs66ffvnqns5zs5qa9fwlctmusj5lj38j94lv0ulw0j54wjqhpm0w5
Sjors’ Twitter: @provoost
Sjors’ Nostr: npub1s6z7hmmx2vud66f3utxd70qem8cwtggx0jgc7gh8pqwz2k8cltuqrdwk4c
If you’d like to sponsor the show, please email info at bitcoinexplainedpodcast.com.
Episode 91: Splicing
In this episode of Bitcoin, Explained, Aaron and Sjors are once more joined by Breez developer Jesse de Wit, this time to explain splicing. Splicing allows users of the Lightning Network to effectively add or remove funds from an active channel, allowing for continuous payment and routing activity. Aaron, Sjors and Jesse discuss what challenges this entails, and how these challenges are overcome.
At the beginning of the episode, Sjors also gives a brief update on the ongoing TornadoCash trial in the Netherlands, and he addresses a recent block mined by Mara Pool.
===
This episode’s sponsor: CoinKite, maker of the ColdCard
Jesse’s Twitter: @WitDeJesse
Jesse's Nostr: npub18hwpk5qep3ptnmzatq22ptwr9mth7ccrku56rdntwpxjxlkfyr2qrav8du
Aaron's Twitter: @AaronvanW
Aaron’s Nostr: npub1art8cs66ffvnqns5zs5qa9fwlctmusj5lj38j94lv0ulw0j54wjqhpm0w5
Sjors’ Twitter: @provoost
Sjors’ Nostr: npub1s6z7hmmx2vud66f3utxd70qem8cwtggx0jgc7gh8pqwz2k8cltuqrdwk4c
If you’d like to sponsor the show, please email info at bitcoinexplainedpodcast.com.
Episode 90: Asynchronous Lightning Payments
In this episode of Bitcoin, Explained, Aaron and Sjors are joined by Breez developer Jesse de Wit to discuss asynchronous lightning payments. They explain why such payments would be useful, how they would work, and what building blocks are required to realize it. In the process, Aaron, Sjors and Jesse also cover the basics of PTLCs and Trampoline Payments.
===
This episode’s sponsor: CoinKite, maker of the ColdCard
Jesse’s Twitter: @WitDeJesse
Jesse's Nostr: npub18hwpk5qep3ptnmzatq22ptwr9mth7ccrku56rdntwpxjxlkfyr2qrav8du
Aaron's Twitter: @AaronvanW
Aaron’s Nostr: npub1art8cs66ffvnqns5zs5qa9fwlctmusj5lj38j94lv0ulw0j54wjqhpm0w5
Sjors’ Twitter: @provoost
Sjors’ Nostr: npub1s6z7hmmx2vud66f3utxd70qem8cwtggx0jgc7gh8pqwz2k8cltuqrdwk4c
Episode 89: B-money and RPOW
In this episode of Bitcoin, Explained, Aaron and Sjors discuss two more electronic cash projects that predate Bitcoin: Wei Dai’s b-money and Hal Finney’s RPOW. As detailed in Aaron’s new book, The Genesis Book, these systems introduced design elements that were later utilized by Satoshi Nakamoto. Aaron and Sjors explain what these elements are, and how the inspired Bitcoin’s design.
To buy Aaron’s new book, visit www.thegenesisbook.com.
Mentioned:
B-money (archive link): https://web.archive.org/web/20050211031649/http://www.eskimo.com/~weidai/bmoney.txt
RPOW (archive link): https://nakamotoinstitute.org/finney/rpow/index.html
===
This episode’s sponsor: CoinKite, maker of the ColdCard
Aaron's Twitter: @AaronvanW
Aaron’s Nostr: npub1art8cs66ffvnqns5zs5qa9fwlctmusj5lj38j94lv0ulw0j54wjqhpm0w5
Sjors’ Twitter: @provoost
Sjors’ Nostr: npub1s6z7hmmx2vud66f3utxd70qem8cwtggx0jgc7gh8pqwz2k8cltuqrdwk4c
If you’d like to sponsor the show, please email info at bitcoinexplainedpodcast.com
Episode 88: Hashcash and Bit Gold
In this episode of Bitcoin, Explained, Aaron and Sjors discuss two electronic cash projects that predate Bitcoin: Adam Back’s Hashcash and Nick Szabo’s Bit Gold. As detailed in Aaron’s new book, The Genesis Book, these systems introduced design element that were later utilized by Satoshi Nakamoto. Aaron and Sjors explain what these elements are, and how they inspired Bitcoin’s design.
To buy Aaron’s new book, visit www.thegenesisbook.com.
Mentioned:
* 1992 Dwork & Naor: Pricing via Processing or Combatting Junk Mail
* 2002 Back: Hashcash - A Denial of Service Counter-Measure
* Bit Gold: Bitcoin Magazine article (1998)
* One-way function: Wikipedia
* Secure-benchmark function: Intrapolynomial Cryptography (1999)
===
This episode’s sponsor: CoinKite, maker of the ColdCard
Aaron's Twitter: @AaronvanW
Aaron’s Nostr: npub1art8cs66ffvnqns5zs5qa9fwlctmusj5lj38j94lv0ulw0j54wjqhpm0w5
Sjors’ Twitter: @provoost
Sjors’ Nostr: npub1s6z7hmmx2vud66f3utxd70qem8cwtggx0jgc7gh8pqwz2k8cltuqrdwk4c
If you’d like to sponsor the show, please email info at bitcoinexplainedpodcast.com
Episode 87: The Block 1,983,702 Problem
In this episode of Bitcoin, Explained, Aaron and Sjors discuss the so-called “block 1,983,702 problem”. They explain how a bug in early Bitcoin implementations could in rare cases cause a loss of funds, or in a worst-case scenario even lead to consensus failures, while they also explain how BIP 30 and BIP 34 solved this problem. As it turns out, however, BIP 34 introduced a new problem, that could become an issue about twenty years from now…
===
This episode’s sponsor: CoinKite, maker of the ColdCard
Aaron's Twitter: @AaronvanW
Aaron’s Nostr: npub1art8cs66ffvnqns5zs5qa9fwlctmusj5lj38j94lv0ulw0j54wjqhpm0w5
Sjors’ Twitter: @provoost
Sjors’ Nostr: npub1s6z7hmmx2vud66f3utxd70qem8cwtggx0jgc7gh8pqwz2k8cltuqrdwk4c
If you’d like to sponsor the show, please email info at bitcoinexplainedpodcast.com
Episode 86: Ocean Tides
In this episode of Bitcoin, Explained, Aaron and Sjors explain what features are offered by Ocean, the relaunched and rebranded Eligius mining pool. They discuss how payouts from this pool are (partially) non-custodial, how the block template creation is fully transparent, and how payout distribution is determined. Aaron and Sjors also briefly touch on the "spam" filtering employed by Ocean, and how that potentially affects profitability of the pool.
Our new sponsor: https://coinkite.com/
Episode 85: Bitcoin Core 26.0 (And F2Pool’s OFAC Compliant Mining Policy)
In this episode of Bitcoin, Explained, Aaron and Sjors explain what new features are included in the upcoming Bitcoin Core 0.26 release. They also briefly discuss recent developments concerning the transaction inclusion policy of mining pool F2Pool, which appears to have been compliant with the OFAC sanctions list.
Link to testing guide: https://github.com/bitcoin-core/bitcoin-devwiki/wiki/26.0-Release-Candidate-Testing-Guide
Episode 84: Marathon Pool’s Invalid Block (And Some Updates About the Show)
In this episode of Bitcoin, Explained, Aaron and Sjors discuss an invalid block mined by Marathon Pool. They explain why the block was invalid, what caused it (and what didn’t), and why that didn’t affect the Bitcoin network.
Aaron and Sjors also provide some updates about the show, and what that means moving forward.
Finally, Sjors briefly mentions some notable Bitcoin Core updates that were recently merged.
For more information on the invalid block, also see: https://b10c.me/observations/07-invalid-block-809478/
Episode 83: The Milk Sad Vulnerability
In this episode, Aaron (@AaronvanW) and Sjors (@provoost) discuss a vulnerability in Libbitcoin dubbed “Milk Sad”, which allowed people to generate private key seeds with such weak entropy that their private keys could be brute forced and their coins stolen. Aaron and Sjors examine how this vulnerability (could have) ended up in Libbitcoin as well as in Andreas Antonopoulos’ book Mastering Bitcoin, to what extent it should be considered a bug, and more.
For more information on Milk Sad, see: https://milksad.info/
Libbitcoin lead developer Eric Voskuil on Milk Sad: https://youtu.be/3uwl5xDdc7c
Sjors New Book: https://www.amazon.com/Bitcoin-Technical-innovations-Sjors-Provoost/dp/9090360425
THIS EPISODE’S SPONSORS:
Lower your time preference and lock-in your BITCOIN 2024 conference tickets today! Use the code BMLIVE for a 10% Discount! - https://b.tc/conference/2024
Episode 82: Scaling to Billions of Users
In this episode, Aaron (@AaronvanW) and Sjors (@provoost) discuss a recent blog post by Bitcoin Core developer Anthony Towns (@ajtowns), “Putting the B in BTC”, in which he outlines a vision for scaling Bitcoin to facilitate billions of users. As Aaron and Sjors walk through the article, they explain what some of Towns’ proposed solutions are, and which tradeoffs they entail.
Link to the blog post: https://www.erisian.com.au/wordpress/2023/06/21/putting-the-b-in-btc
Sjors New Book: https://www.amazon.com/Bitcoin-Technical-innovations-Sjors-Provoost/dp/9090360425
THIS EPISODE’S SPONSORS:
Lower your time preference and lock-in your BITCOIN 2024 conference tickets today! Use the code BMLIVE for a 10% Discount! - https://b.tc/conference/2024
Episode 81: Bitcoin Core 25.0
In this episode, Aaron (@AaronvanW) and Sjors (@provoost) discuss Bitcoin Core 25.0, the latest major release of the Bitcoin Core software. They highlight four of the most notable changes: performance improvements concerning huge transaction loads, further Miniscript integration, a faster wallet re-scan, and the decreased 65-byte transaction limit policy rule.
For further reading on the reasoning behind 65-byte policy rule, also see: https://bitslog.com/2018/06/09/leaf-node-weakness-in-bitcoin-merkle-tree-design/
Episode Sponsor: https://voltage.cloud/
Sjors New Book: https://www.amazon.com/Bitcoin-Technical-innovations-Sjors-Provoost/dp/9090360425
Lower your time preference and lock-in your BITCOIN 2024 conference tickets today! Use the code BMLIVE for a 10% Discount! - https://b.tc/conference/2024
Episode 80: Stratum V2
In this episode of Bitcoin, Explained, Aaron (@AaronvanW) and Sjors (@provoost) are joined by Braiins co-founder Jan Čapek (@janbraiins), who has been leading the initiative to upgrade pooled mining to the Stratum V2 protocol. Aaron, Sjors and Jan discuss what pooled mining is, how the Stratum protocol helps with that, and in what ways Stratum V2 is an improvement over Stratum V1.
Episode Sponsor: https://voltage.cloud/
Sjors New Book: https://www.amazon.com/Bitcoin-Technical-innovations-Sjors-Provoost/dp/9090360425
Lower your time preference and lock-in your BITCOIN 2024 conference tickets today! Use the code BMLIVE for a 10% Discount! - https://b.tc/conference/2024
Episode 79: The Witness Discount
In this episode of Bitcoin, Explained, Aaron (@AaronvanW) and Sjors (@provoost) explain why the witness discount was included in the Segregated Witness protocol upgrade from 2017, why this discount is 75%, and why this discount still makes sense in today’s world where Inscriptions benefit from it. Episode Sponsor: https://voltage.cloud/ Sjors New Book: https://www.amazon.com/Bitcoin-Technical-innovations-Sjors-Provoost/dp/9090360425 Lower your time preference and lock-in your BITCOIN 2024 conference tickets today! Use the code BMLIVE for a 10% Discount! - https://b.tc/conference/2024
Episode 78: Partially Signed Bitcoin Transactions (PSBTs) (And Dutch Auctions)
In this episode of Bitcoin, Explained, Aaron (@AaronvanW) and Sjors (@provoost) explain Partially Signed Bitcoin Transactions (PSBTs), discussing what problems they solve, how they work, and some of the ways they are used. In the last part of the episode, the hosts zoom in on one particular PSBT use case called Dutch Auctions, which Bitcoin Magazine recently used to sell ordinals.
Episode Sponsor: https://voltage.cloud/
Sjors New Book: https://www.amazon.com/Bitcoin-Technical-innovations-Sjors-Provoost/dp/9090360425
Don't miss out on the biggest Bitcoin event of the year! B23 in Miami is coming up fast, get your tickets now!
Lower your time preference and lock-in your BITCOIN 2023 conference tickets today! Use the code BMLIVE for a 10% Discount! - https://b.tc/conference/2023
Episode 77: Peer-to-peer Encryption
In this episode of Bitcoin, Explained, Aaron and Sjors discuss BIP 324, the proposal by Dhruv, Pieter Wuille and Tim Ruffing to add peer-to-peer (P2P) encryption to the Bitcoin protocol. They explain why this is needed, how it would work, and which problems it would, and wouldn’t solve.
Episode Sponsor: https://voltage.cloud/
Sjors New Book: https://www.amazon.com/Bitcoin-Technical-innovations-Sjors-Provoost/dp/9090360425
Don't miss out on the biggest Bitcoin event of the year! B23 in Miami is coming up fast, get your tickets now!
Lower your time preference and lock-in your BITCOIN 2023 conference tickets today! Use the code BMLIVE for a 10% Discount! - https://b.tc/conference/2023
Episode 76: Stamps (And the Invalid Block Caused by It)
In this episode of Bitcoin, Explained, Aaron and Sjors explain Stamps, a new(?) protocol to upload images onto the Bitcoin blockchain, which end up in the UTXO set. To learn more about some of the concepts mentioned in this episode, also check out episode 15 (Utreexo), episode 61 (OP_RETURN), episode 72 (Inscriptions) and episode 75 (Multisig). Episode Sponsor: https://voltage.cloud/ Sjors New Book: https://www.amazon.com/Bitcoin-Technical-innovations-Sjors-Provoost/dp/9090360425 Don't miss out on the biggest Bitcoin event of the year! B23 in Miami is coming up fast, get your tickets now! Lower your time preference and lock-in your BITCOIN 2023 conference tickets today! Use the code BMLIVE for a 10% Discount! - https://b.tc/conference/2023
Episode 75: Multisig (And Musig)
In this episode of Bitcoin, Explained, Aaron and Sjors discuss multi-signature (multisig), and the various ways that Bitcoin enables multisig; from bare multisig, to P2SH, SegWit, Taproot, and finally Musig, as well as some potential future solutions.
Episode Sponsor: https://voltage.cloud/
Sjors New Book: https://www.amazon.com/Bitcoin-Technical-innovations-Sjors-Provoost/dp/9090360425
Don't miss out on the biggest Bitcoin event of the year! B23 in Miami is coming up fast, get your tickets now!
Lower your time preference and lock-in your BITCOIN 2023 conference tickets today! Use the code BMLIVE for a 10% Discount! - https://b.tc/conference/2023
Episode 74: Pay-to-Script-Hash (P2SH)
In this episode of Bitcoin, Explained, Aaron and Sjors explain pay-to-script-hash (P2SH), which allows bitcoin to be sent to and from the hash of a script. Besides (the current implementation of) P2SH itself, Aaron and Sjors also discuss some alternatives that were proposed around the time that P2SH was adopted in 2012.
For further reading on the history of P2SH, also see "The Battle for P2SH: The Untold History of Bitcoin’s First War"
Episode Sponsor: https://voltage.cloud/
Sjors New Book: https://www.amazon.com/Bitcoin-Technical-innovations-Sjors-Provoost/dp/9090360425
Don't miss out on the biggest Bitcoin event of the year! B23 in Miami is coming up fast, get your tickets now!
Episode 73: OP_VAULT
In this episode of Bitcoin, Explained, Aaron and Sjors explain OP_VAULT, a proposed op code that would enable an elegant type of vaults through Bitcoin’s scripting language.
For more information, also see:
https://jameso.be/vaults.pdf
https://github.com/bitcoin/bips/blob/c589490f98ba1b0c606d0e2030463f1fde54b786/bip-vaults.mediawiki
===
Episode Sponsor: https://voltage.cloud/
Sjors New Book: https://www.amazon.com/Bitcoin-Technical-innovations-Sjors-Provoost/dp/9090360425
Don't miss out on the biggest Bitcoin event of the year! B23 in Miami is coming up fast, get your tickets now!
Lower your time preference and lock-in your BITCOIN 2023 conference tickets today! Use the code BMLIVE for a 10% Discount! https://b.tc/conference/2023
Episode 72: Inscriptions
In this episode of Bitcoin, Explained, Aaron and Sjors explain Inscriptions, a new method to upload arbitrary data onto the Bitcoin blockchain.
Episode Sponsor: https://voltage.cloud/
Sjors New Book: https://www.amazon.com/Bitcoin-Technical-innovations-Sjors-Provoost/dp/9090360425
Don't miss out on the biggest Bitcoin event of the year! B23 in Miami is coming up fast, get your tickets now!
Lower your time preference and lock-in your BITCOIN 2023 conference tickets today! Use the code BMLIVE for a 10% Discount! https://b.tc/conference/2023
Episode 71: Timelocks
In this episode of Bitcoin, Explained, Aaron and Sjors discuss the different types of timelocks available on Bitcoin (and what can go wrong when used incorrectly).
Episode Sponsor: https://voltage.cloud/
Sjors New Book: https://www.amazon.com/Bitcoin-Technical-innovations-Sjors-Provoost/dp/9090360425
Lower your time preference and lock-in your Bitcoin 2023 conference tickets today!!! Use promo code BMLIVE to save 10% off your conference tickets today!!!
https://b.tc/conference/bitcoin2023
Follow us on Twitter:
- https://twitter.com/bitcoinmagazine
- https://twitter.com/videobitcoin
Episode 70: The Bitcoin Core 24.0 Bug (Or Why There Is a Bitcoin Core 24.0.1 Release)
Aaron and Sjors explain how a wallet bug crept into the Bitcoin Core 24.0 release, and why there is now a Bitcoin Core version 24.0.1 available.
Episode Sponsor: https://voltage.cloud/
Sjors New Book: https://www.amazon.com/Bitcoin-Technical-innovations-Sjors-Provoost/dp/9090360425
Lower your time preference and lock-in your Bitcoin 2023 conference tickets today!!!
Use promo code BMLIVE to save 10% off your conference tickets today!!! https://b.tc/conference/bitcoin2023
Follow us on Twitter:
- https://twitter.com/bitcoinmagazine
- https://twitter.com/videobitcoin
Episode 69: The Tornado Cash Trial
Aaron and Sjors explain what happened in the pro forma hearing concerning the trial against Alexy Pertsev, one of the developers behind the Ethereum-based Tornado Cash mixer. While this means that this episode dives more into the domain of Ethereum smart contracts and Dutch law, Aaron and Sjors do discuss the ongoing case from a Bitcoin perspective.
THIS EPISODE’S SPONSORS:
Voltage - https://voltage.cloud/
Bitcoin 2023 Miami - https://b.tc/conference/
Bitcoin Magazine - https://store.bitcoinmagazine.com/
Bitcoin Magazine Pro - https://bitcoinmagazine.com/tags/bitcoin-magazine-pro
Lower your time preference and lock-in your BITCOIN 2023 conference tickets today! Use the code BMLIVE for a 10% Discount!
Use promocode: BMLIVE for 10% off everything in our store!
Episode 68: Full Replace-By-Fee (RBF) in Bitcoin Core 24.0
RBF has been the topic of a previous Bitcoin, Explained episode: episode 26. In this new episode, therefore, Aaron and Sjors don’t explain in-depth on what RBF is, exactly, or how it works. They do however very briefly summarize its most important aspects.
Aaron and Sjors then go on to explain why Bitcoin Core developers originally decided to include this feature, and they discuss some of the arguments for and against (full) RBF that came up at the time and since then. These include the effect of RBF on “pinning attacks” (a type of attack that is especially relevant for the Lightning Network and other Layer Two protocols), the relative safety of accepting unconfirmed transactions today, privacy-related arguments concerning the “opt-in” flag that RBF transactions currently use, the detrimental effects of monitoring the network for potential double spends, and more. Aaron and Sjors also discuss the pros and cons of including RBF as an optional feature and thus letting node operators decide for themselves how their node deals with conflicting unconfirmed transactions. Sjors outlines why, in some cases, giving users more options could have detrimental effects on the health of the Bitcoin network, and considers whether the option to include the RBF option is such a case. Finally, Aaron and Sjors briefly discuss an initiative by full RBF advocate Peter Todd to incentivize miners to apply full RBF logic to their transaction selection.
THIS EPISODE’S SPONSORS:
Voltage - https://voltage.cloud/
Bitcoin 2023 Miami - https://b.tc/conference/
Bitcoin Magazine - https://store.bitcoinmagazine.com/
Bitcoin Magazine Pro - https://bitcoinmagazine.com/tags/bitcoin-magazine-pro
Lower your time preference and lock-in your BITCOIN 2023 conference tickets today! Use the code BMLIVE for a 10% Discount!
Use promocode: BMLIVE for 10% off everything in our store!
Episode 67: Insights From the Fourth Largest Lightning Network Node
At the start of the episode, Sjors first gives a brief update on the bug that brought down LND nodes, discussed in episode 66. He confirms that his assessment of the cause was correct, and explains that a very similar bug has brought down LND once more since recording of the last episode.
Aaron and Sjors then go on to ask Sam about the contents of his report, with a focus on three subsections of the report in particular.
First, Aaron, Sjors and Sam discuss the current status of fees and liquidity. Sam explains that large Lightning nodes can earn a “return on investment” of several percentages per year by routing payments over the network, but that this does require active channel maintenance to manage liquidity. Second, Aaron, Sjors and Sam discuss why some Lightning payments fail. Sam explains that the success rate of Lightning payments is very high compared to just a few years ago, but that there are two main reasons why payments sometimes do still fail: payment timeouts, and a lack of available routes. The trio speculates why this might be the case.
Lastly, Sam outlines some of the challenges and concerns related to running Lightning infrastructure for businesses.
THIS EPISODE’S SPONSORS:
Voltage - https://voltage.cloud/
Bitcoin 2023 Miami - https://b.tc/conference/
Bitcoin Magazine - https://store.bitcoinmagazine.com/
Bitcoin Magazine Pro - https://bitcoinmagazine.com/tags/bitcoin-magazine-pro
Lower your time preference and lock-in your BITCOIN 2023 conference tickets today! Use the code BMLIVE for a 10% Discount!
Use promocode: BMLIVE for 10% off everything in our store!
Episode 66: The BTCD Bug That Brought Down LND Nodes
In this episode of Bitcoin, Explained, hosts Aaron van Wirdum and Sjors Provoost discuss a recent bug in the btcd Bitcoin implementation that affected a large part of the Lightning network, as it disconnected lnd Lightning nodes from the Bitcoin blockchain.
In the episode, Aaron and Sjors explain that a developer going by the name Burak on Twitter created a 998-of-999 multisig transaction by leveraging Taproot. Although this was a valid transaction, btcd and lnd nodes rejected it, and therefore rejected the block that included the transaction and all blocks that came after it.
Specifically, Sjors explains, btcd rejected the transaction because it has a maximum limit on how much witness data a Segwit transaction can include. Although other Bitcoin implementations do enforce this limit on Segwit version 0 transactions, Segwit version 1 (that is, Taproot) transactions have no such limit.
Still, it is a bit unclear why this bug in btcd seemingly also affected many lnd Lightning nodes which use Bitcoin Core rather than btcd to validate blocks. In the second half of the episode, Sjors speculates how the two may be connected.
Finally, Aaron and Sjors explain how the Lightning Network is affected when Lightning nodes reject the Bitcoin blockchain.
Lower your time preference and lock-in your BITCOIN 2023 conference tickets today! Use the code BMLIVE for a 10% Discount!
Use promocode: BMLIVE for 10% off everything in our store!
Episode 65: Bitcoin Core 24.0
The Bitcoin Core project produces a new major release of its software roughly every six months. The 24th major release is currently in its release candidate phase, which means that it is being tested and could technically be released any day now (though this phase will probably last a few more weeks). In the episode, Aaron and Sjors discuss seven of the most notable changes included in Bitcoin Core 24.0. This includes a change to how nodes download blocks when they sync with the network. While previous Bitcoin Core versions already started by downloading only block headers to make sure that the blocks they download have sufficient proof of work on them, Bitcoin Core 24.0 nodes will initially not store these block headers in order to prevent a certain type of resource exhaustion attack. Aaron and Sjors explain that this should eventually also allow for the removal of any checkpoints in the Bitcoin Core codebase. They go on to explain that Bitcoin Core 24.0 also includes an added option for users to apply full replace-by-fee (RBF) logic. Where Bitcoin Core nodes so far would apply the “first seen” rule, which meant that conflicting transactions wouldn’t be accepted in the node's memory pool (mempool) and forwarded to peers, Bitcoin Core 24.0 users can choose to make their nodes accept and forward conflicting transactions if they include a higher fee than (the) earlier transaction(s) they conflict with. Further upgrades discussed by Aaron and Sjors include a tool to migrate legacy wallets to descriptor wallets, initial miniscript support, default use of RBF when creating transactions, an improved UTXO selection algorithm which randomizes change output amounts for extra privacy, and a new “send all” function to spend a particular (set of) UTXO(s) in full.
Lower your time preference and lock-in your BITCOIN 2023 conference tickets today! Use the code BMLIVE for a 10% Discount!
Use promocode: BMLIVE for 10% off everything in our store!
Episode 64: HD Wallets, Mnemonic Codes and SeedQR
In this episode of Bitcoin, Explained, hosts Aaron van Wirdum and Sjors Provoost discuss Hierarchical Deterministic (HD) Wallets, mnemonic codes, and — especially — the new SeedQR format which allows users to store their mnemonic codes as QR codes.
Aaron and Sjors start the episode by recapping what HD Wallets (also known as private key seeds) are, and why they are preferred over regular private key backups. Next, they briefly explain why mnemonic codes (also known as seed phrases) are a popular solution for encoding and storing private key seeds.
The Bitcoin, Explained hosts then go on to discuss SeedQR. SeedQR is a new format that allows Bitcoin users to encode and store their mnemonic code as a QR code. This means that mnemonic codes can be stored in a computer-readable format; any compatible device (like a hardware wallet with a camera) should be able to scan the QR code, and import all associated private keys.
This could be useful for backups. but it could also be used so that wallets (including hardware wallets, but also mobile or desktop wallets) no longer have to store private keys at all. The QR code could be scanned when the wallet is used to send a transaction, after which the private keys could be forgotten by the device altogether. (SeedSigner is an open source, do-it-yourself hardware wallet that does exactly this.)
Finally, Sjors goes over some of the intricacies of formatting a seed phrase to fit in a compact QR code, and some of the efficiency gains SeedQR uses to accomplish this.
Lower your time preference and lock-in your BITCOIN 2023 conference tickets today! Use the code BMLIVE for a 10% Discount!
https://b.tc/conference/2023
Use promocode: BMLIVE for 10% off everything in our store!
https://store.bitcoinmagazine.com/
#BitcoinExplained #BitcoinPrice #BitcoinCore #BitcoinMagazine #journalism #bitcoinnews
Episode 63: The Bitcoin Core Development Process
In this episode of Bitcoin, Explained, hosts Aaron van Wirdum and Sjors Provoost discuss the Bitcoin Core development process, and more specifically, the different roles that are involved in this process.
At the start of the episode, Aaron and Sjors explain what Bitcoin Core is, both in a practical sense as well as in a more definitional sense, and they touch on some slightly different ideas about this as well.
Aaron and Sjors then go on to explain the roles of three distinct types of Bitcoin Core contributors: “regular” Bitcoin Core contributors, Bitcoin Core maintainers, and the Bitcoin Core lead maintainer.
Since there are no barriers to entry, anyone can become a Bitcoin Core contributor, Aaron and Sjors point out: anyone can start contributing to the Bitcoin Core project by offering code, review of code, or perhaps other types of contributions like text translations.
Bitcoin Core maintainers, then, are Bitcoin Core contributors who can merge new code into the Bitcoin Core codebase. Aaron and Sjors explain what this means exactly, and how someone can become a Bitcoin maintainer.
Finally, Aaron and Sjors go over some of the typical tasks of the Bitcoin Core lead maintainer, which includes managing the release process, adding and removing (other) Bitcoin Core maintainers to the project, and updating the bitcoincore.org website. They also discuss which of these tasks are in fact still done by the Bitcoin Core lead maintainer, however, and which tasks have over the years become more distributed.
Lower your time preference and lock-in your BITCOIN 2023 conference tickets today! Use the code BMLIVE for a 10% Discount!
https://b.tc/conference/2023
Use promocode: BMLIVE for 10% off everything in our store!
https://store.bitcoinmagazine.com/
Episode 62: Hash Functions
In this episode of Bitcoin, Explained, hosts Aaron van Wirdum and Sjors Provoost go back to basics. They explain one of the most fundamental building blocks in all of Bitcoin: hash functions.
To start the episode off, Aaron and Sjors explain that hash functions are a type of mathematical one-way functions. That means that they can easily convert one piece of data into another piece of data, a hash, but anyone who knows only this hash can not convert it back to the original data. Additionally, a hash is supposed to be unique: no two (different) pieces of data should result in the same hash. If either of these things is no longer true, a hash function is considered to be broken.
Then, Aaron and Sjors go on to explain in a little bit more detail how hash functions actually work. They discuss some aspects of the history and evolution of different hash functions, they mention some hash functions that have indeed been broken over time, and they pinpoint which hash functions are used in Bitcoin.
Finally, Aaron and Sjors explain how hash functions are used in Bitcoin, exactly. This includes almost every aspect of the Bitcoin system, they point out, ranging from transactions (in multiple ways) and blocks, to addresses and the proof of work mechanism, as well as in relatively new upgrades like Taproot, and hash functions are even used to create some randomness needed to establish connections on the peer-to-peer network.
Episode 61: OP_RETURN (And the ‘OP_RETURN Wars’)
In this episode of Bitcoin, Explained, hosts Aaron van Wirdum and Sjors Provoost discuss OP_RETURN and what some have called the “OP_RETURN wars”. More specifically, they discuss a blog post by BitMEX research titled: “The OP_Return Wars of 2014 – Dapps Vs Bitcoin Transactions”.
Aaron and Sjors start off by explaining that OP_RETURN is an op code (a piece of code for Bitcoin transactions) that will render invalid any transaction that includes it in an input. This means that outputs that include OP_RETURN are unspendeable, which in turn means that Bitcoin nodes can safely remove such UTXOs from their UTXO set, which safes on storage.
Early in Bitcoin’s years, people started using Bitcoin for more than just transactions. As one example given by Sjors, someone uploaded the entire Bitcoin white paper onto the blockchain. The BitMEX blog meanwhile explains that Layer Two protocols like Counterparty were rolling out decentralized applications on the blockchain. This type of non-transaction data was initially embedded in multisig transactions, but this meant that all Bitcoin nodes had to download, process and store this data forever, which comes at a cost.
To mitigate this problem, Aaron and Sjors explain, Bitcoin developers in 2014 agreed to let nodes process and forward transactions with OP_RETURN outputs. These transactions would be better for uploading data, since their outputs can be removed form the UTXO set.
The “OP_RETURN wars” refer to a debate between Bitcoin developers and (most notably) Counterparty developers over the maximum size of such transactions. Sjors explains why the maximum of 40 bytes was initially choses, why this was later increased to 80 bytes, and how these considerations have changed over time.
BitMEX’ blog post: https://blog.bitmex.com/dapps-or-only-bitcoin-transactions-the-2014-debate/
Sjors’ book mentioned in the episode: https://www.btcwip.com/
Evan Kaloudis tells P & Q what hyperbitcoinization means to him.
Lower your time preference and lock-in your BITCOIN 2023 conference tickets today! Use the code BMLIVE for a 10% Discount!
https://b.tc/conference/2023
Use promocode: BMLIVE for 10% off everything in our store!
https://store.bitcoinmagazine.com/
#bitcoin #bitcoinmagazine #hyperbitcoinization #money #whatismoney #whatisbitcoin #crypto #cryptocurrencies #globalmarkets
Episode 60: Reusing Addresses (and the Hertzbleed Attack)
In this episode of Bitcoin, Explained, hosts Aaron van Wirdum and Sjors Provoost discuss reusing Bitcoin addresses. More specifically, they explain why reusing Bitcoin addresses is a bad idea.
Reusing Bitcoin addresses is a bad idea for roughly three reasons. The first two of these are that it harms privacy and impedes on the censorship resistance of Bitcoin. In the episode, Aaron and Sjors go over a couple examples of how such a loss of privacy and censorship resistance can negatively affect Bitcoin users.
The third reason that reusing Bitcoin addresses is a bad idea, is that it opens up the possibility of some niche attacks. In certain cases, attackers could extract private keys from signatures after coins are first spent from an address — though this does require that a wallet implemented the signing algorithm wrongly in the first place. There are also some scenarios where quantum computers could in the future extract private keys from signatures if addresses are reused.
Another type of niche attack is a timing sidechannel attack, such as the recently disclosed Hertzbleed Attack. Sjors explains that attackers can potentially derive a private key from a wallet by closely monitoring how the computer that hosts the wallet behaves when signing a transaction. This attack is more plausible if addresses are reused.
Address reuse wiki: https://en.bitcoin.it/wiki/Address_reuse#Security
Hertzbleed attack: https://www.hertzbleed.com/
Episode 59: Hard Forks (And Whether Bitcoin Has Ever Hard Forked)
In the second half of the podcast, Aaron and Sjors break down the seven hard forks in Bitcoin’s history that Lopp was able to find, of which five were never utilized (and should therefore arguably not be considered hard forks at all), one was explicit, and one was implicit.
Finally, Aaron and Sjors briefly discuss (a) future hard fork(s) that need(s) to happen, and what kind of philosophy around deploying hard forks might make sense for Bitcoin.
Jameson Lopp’s blog post: https://blog.lopp.net/has-bitcoin-ever-hard-forked/
Episode 58: Silent Payments
Episode 57: User Rejected Soft Forks (URSFs)
Episode 56: Bitcoin Core 23.0
Episode 55: Syncing Old Nodes
In the episode, Aaron and Sjors outline the performance improvements of Bitcoin Core clients over time, as analyzed most recently in two blog posts by Lopp. They first explain why some very old Bitcoin clients have trouble syncing to the current state of the blockchain at all, pointing out some bugs in this early software, as well as issues relating to dependencies and the challenge of using such old clients today. Sjors then goes on to sum up some of the most important performance improvements that have been included in new Bitcoin Core releases over time.
Jameson Lopp’s blog posts:
https://blog.lopp.net/bitcoin-core-performance-evolution/
https://blog.lopp.net/running-bitcoin-core-v0-7-and-earlier/
Episode 54: Burying Soft Forks
Episode 53: Discreet Log Contracts (DLCs)
Episode 52: Federated eCash
In this episode of Bitcoin, Explained, hosts Aaron van Wirdum and Sjors Provoost are once again joined by resident sidechain and Layer Two expert Ruben Somsen, this time to discuss Federated Ecash, a project that has since October 2021 been sponsored by Bitcoin infrastructure company Blockstream.
In the episode, Aaron, Sjors and Ruben discuss the history and design of Ecash, a pioneering digital cash project developed by cryptographer David Chaum and his startup Digicash in the early 1990s. The trio explains how the Ecash system allowed customers of regular banks to make private transactions over the internet.
This latest iteration of Ecash, Federated Ecash, takes the original concept, but applies it to be utilized by custodial (or shared custodial) Bitcoin and Lightning wallets. In short, a Federated Ecash service would accept bitcoin deposits, and exchange them for bitcoin-denominated Ecash tokens. These tokens can be send to other users, and ultimately redeemed for the deposited bitcoin. These bitcoin would, in the mean time, be locked up in a multisig address shared between a set of custodians.
Concluding the episode, Aaron, Sjors and Ruben go over a short list of ideal properties for a digital cash system, and asses how Bitcoin, Ecash, and the combination of the two embed these properties.
Episode 51: Compact Blocks
Episode 50: The Mempool (And Why We Need It)
In the episode, Aaron and Sjors explain how this would work, and why this is not as simple as it may sound. Based on the responses in the thread, they go over the reasons why getting rid of the mempool is in fact not a very good solution for a system like Bitcoin. Specifically, they discuss the implications on mining privacy and decentralization, while also exploring some other tradeoffs that would need to be made in order to make the Bitcoin system work without a mempool. Finally, Sjors considers an idea that Aaron doesn’t understand.
---------------------------------------------
Bitcoin Magazine is back in print!
Get Bitcoin Magazine shipped directly to your front door!
Get 21% off with promo code: MAG21
https://store.bitcoinmagazine.com/discount/MAG21?redirect=%2Fproducts%2Fbitcoin-magazine-annual-subscription
"The Deep Dive" delivers the latest Bitcoin on-chain market intelligence directly to your inbox!
Check it out for free here!
deepdivebtc.substack.com/welcome
Bitcoin 2022 will be the biggest Bitcoin conference ever! Miami, FL from April 6–9, 2022
Get 15% off tickets with promo code: MAG21
Episode 49: The Attack of the Fake Peers!
Bitcoin was under attack! It’s the story the mainstream media won’t tell you!
Hosts Aaron van Wirdum and Sjors Provoost finally met in Utrecht again to record Bitcoin, Explained. In this episode, they discuss a recent attack on the Bitcoin network, where some nodes were flooding peers with fake IP-addresses.
As previously discussed in episode 13, Bitcoin nodes connect to peers on the network through IP-addresses, which they learn from their existing peers. Nodes on the network essentially share the IP-addresses of other nodes.
Recently, however, some Bitcoin nodes shared large amounts of IP-addresses that weren’t associated with real Bitcoin nodes at all. While this attack did not do very much damage, it did waste resources from nodes on the network. On top of that, Aaron and Sjors explain, the attack could offer the attacker insight into Bitcoin’s network topology by analyzing how the fake IP-addresses spread through the network.
Finally, Aaron and Sjors discuss how the attack was solved by rate limiting the amount of IP-addresses than any node will allow its peers to be shared. Further, they consider how in free and open source software development, fixing problems is not always as straightforward as it may seem…
---------------------------------------------
Bitcoin Magazine is back in print!
Get Bitcoin Magazine shipped directly to your front door!
Get 21% off with promo code: MAG21
https://store.bitcoinmagazine.com/discount/MAG21?redirect=%2Fproducts%2Fbitcoin-magazine-annual-subscription
"The Deep Dive" delivers the latest Bitcoin on-chain market intelligence directly to your inbox!
Check it out for free here!
deepdivebtc.substack.com/welcome
Bitcoin 2022 will be the biggest Bitcoin conference ever! Miami, FL from April 6–9, 2022
Get 15% off tickets with promo code: MAG21
https://b.tc/conference/
Episode 48: SIGHASH_ANYPREVOUT and Eltoo part 2
In this episode of “Bitcoin Explained,” host Sjors Provoost and guest Christian Decker discussed SIGHASH_ANYPREVOUT, a proposed new sighash flag that would enable a cleaner version of the Lightning Network and other Layer 2 protocols.
Sighash flags are included in Bitcoin transactions to indicate which part of the transaction is signed by the required private keys, exactly. This can be (almost) the entire transaction, or specific parts of it. Signing only specific parts allows for some flexibility to adjust the transaction even after it is signed, which can sometimes be useful.
---------------------------------------------
Bitcoin Magazine is back in print!
Get Bitcoin Magazine shipped directly to your front door!
Get 21% off with promo code: MAG21
https://store.bitcoinmagazine.com/discount/MAG21?redirect=%2Fproducts%2Fbitcoin-magazine-annual-subscription
"The Deep Dive" delivers the latest Bitcoin on-chain market intelligence directly to your inbox!
Get 1 Month free with promo code: PODCAST
https://deepdivebtc.substack.com/01e06e79
Bitcoin 2022 will be the biggest Bitcoin conference ever! Miami, FL from April 6–9, 2022
Get 15% off tickets with promo code: MAG21
https://b.tc/conference/
Decker and Provoost explained that SIGHASH_ANYPREVOUT is a new type of sighash flag, which would sign most of the transaction, but not the inputs. This means that the inputs could be swapped, as long as the new inputs would still be compatible with the signature.
SIGHASH_ANYPREVOUT would be especially useful in the context of Eltoo, a proposed Layer 2 protocol that would enable a new version of the Lightning Network. In place of how Lightning users currently need to store old channel data for security reasons, and could also be punished severely if they accidentally broadcast some of this data at the wrong time, Decker and Provoost explained how SIGHASH_ANYPREVOUT would do away with this requirement.
Episode 47: Lightning Network Payment Flows
---------------------------------------------
Bitcoin Magazine is back in print!
Get Bitcoin Magazine shipped directly to your front door!
Get 21% off with promo code: MAG21
https://store.bitcoinmagazine.com/discount/MAG21?redirect=%2Fproducts%2Fbitcoin-magazine-annual-subscription
"The Deep Dive" delivers the latest Bitcoin on-chain market intelligence directly to your inbox!
Get 1 Month free with promo code: PODCAST
https://deepdivebtc.substack.com/01e06e79
Bitcoin 2022 will be the biggest Bitcoin conference ever! Miami, FL from April 6–9, 2022
Get 15% off tickets with promo code: MAG21
https://b.tc/conference/
Episode 46: The Chivo App (First Look)
In this episode of Bitcoin, Explained (formerly known as The Van Wirdum Sjorsnado) hosts Aaron van Wirdum and Sjors Provoost discuss the Chivo application, the Bitcoin wallet, and payment terminal provided by the government of El Salvador. This episode is a little bit different from other episodes of Bitcoin, Explained, because the Chivo app is closed source software. Instead of analyzing the source code and design of the application, Aaron and Sjors have to rely on Aaron’s personal experience with the wallet and payment terminal or what he remembers of that personal experience. The episode opens with some general information about the Chivo Wallet, like why it was developed and who developed it (insofar anything is known about that). Aaron and Sjors go on to discuss Aaron’s experiences with the wallet and speculate what that means for the design. After that, they discuss the design of the payment terminal that’s included in the application, and also briefly touch on the Chivo ATMs that have been deployed across the country. Finally, Aaron and Sjors discuss the difference in philosophy between the design of the Chivo application and Bitcoin’s free and open-source software culture.
---------------------------------------------
Bitcoin Magazine is back in print!
Get Bitcoin Magazine shipped directly to your front door!
Get 21% off with promo code: MAG21
https://store.bitcoinmagazine.com/discount/MAG21?redirect=%2Fproducts%2Fbitcoin-magazine-annual-subscription
"The Deep Dive" delivers the latest Bitcoin on-chain market intelligence directly to your inbox!
Get 1 Month free with promo code: PODCAST
https://deepdivebtc.substack.com/01e06e79
Bitcoin 2022 will be the biggest Bitcoin conference ever! Miami, FL from April 6–9, 2022
Get 15% off tickets with promo code: MAG21
https://b.tc/conference/
Episode 45: Bitcoin Core 22.0
The Van Wirdum Sjorsnado has rebranded, and is now called Bitcoin, Explained!
In this episode of Bitcoin, Explained, hosts Aaron van Wirdum and Sjors Provoost discuss Bitcoin Core 22.0, the latest major release of the Bitcoin Core software client, currently the de facto reference implementation of the Bitcoin protocol. Aaron and Sjors highlight several improvements to the Bitcoin Core software.
The first of these is hardware wallet support in the graphical user interface (GUI). While hardware wallet support has been rolling out across several previous Bitcoin Core releases, it is now fully available in the GUI. The second highlighted upgrade is support for the Invisible Internet Project (I2P), a Tor-like internet privacy layer. Aaron and Sjors also briefly touch on the differences between I2P and Tor.
The third upgrade discussed in the episode is Taproot support. While Taproot activation logic was already included in Bitcoin Core 0.21.1 Bitcoin Core 22.0 is the first major Bitcoin Core release ready to support Taproot when it activates this November, and includes some basic Taproot functionality.
The fourth upgrade that Aaron and Sjors discuss is an update to the testmempoolaccept logic, which paves the way to a bigger package relay upgrade. This could in a future release allow transactions to be transmitted over the Bitcoin network in packages including several transactions at the same time.
Additionally, Aaron and Sjors briefly discuss an extension to create multisig and add multisig address, the new NAT-PMP option, and more.
Episode 44: BOLT 12
Sjors is back!
In this episode of The Van Wirdum Sjorsnado, hosts Aaron van Wirdum and Sjors Provoost discuss BOLT 12 (Basis of Lightning Technology 12), a newly proposed Lightning Network specification for “offers”, a type of “meta invoices” designed by c-lightning developer Rusty Russell.
Where coins on Bitcoin’s base layer are sent to addresses, the Lightning network uses invoices. Invoices communicate the requested amount, node destination, and the hash of a secret which is used for payment routing. This works, but has a number of limitations, Sjors explains, notably that the amount must be bitcoin-denominated (as opposed for fiat denominated), and the invoice can only be used once.
BOLT 12, which has been implemented in c-ligtning, is a way to essentially refer a payer to the node that is to be paid, in order to request a new invoice. While the BOLT 12 offer can be static and reusable — it always refers to the same node — the payee can generate new invoices on the fly when requested, allowing for much more flexibility, Sjors explains.
Finally, Aaron and Sjors discuss how the new BOLT 12 messages are communicated over the Lightning Network through an update to the BOLT 7 specification for message relay.
Episode 43: Hardware Wallets and Blockstream’s Jade Wallet
In this episode of The Van Wirdum Sjorsnado, Aaron van Wirdum hosts one more interview without his regular cohost Sjors Provoost. Instead, he is joined by Blockstream’s Lawrence Nahum, one of the developers behind the Jade wallet, and Ben Kaufman, one of the developers of the Spectre wallet, which is specifically designed to work with hardware wallets.
Aaron, Lawrence and Ben talk about what hardware wallets are, and discuss the design tradeoffs that different hardware wallets have taken by focussing on the Trezor, Ledger and ColdCard specifically. In this light, Lawrence and Ben explain what secure elements and secure chips are, and why some hardware wallets choose to rely on using such chips more than others.
Then, Lawrence explains which tradeoffs the Jade wallet makes. He also details how an additional server-based security step is used to further secure the Jade wallet, and briefly outlines some additional differences in hardware wallet designs, for example those focused on usability.
Finally, Aaron, Lawrence and Ben discuss whether the concept of hardware wallets are a good idea in the first place, or if it would perhaps be better to use dedicated smartphones to store your bitcoin.
And don’t worry, Sjors will be back for episode 44!