In case you haven’t noticed, Bitcoin is going through some pretty intense tribulation right now, with tens of thousands of unconfirmed transactions, thanks to a “stress test” and, on top of that, forking issues due to invalid blocks being mined and propagated by large mining pools. What exactly is going on there? Let’s have someone else explain it for us:

Three months ago I discovered a miner with ~1% of the hashrate that was processing transactions with no signature validation at all. If I had sent that miner a transaction where I spent a million of other people’s bitcoins they would have mined it and the half of the non-verifying miners would likely have given it 6+ confirms for any SPV client; and thats the more fundamental issue here which no amount of version checking would help with.

Well that certainly doesn’t sound good. Maybe it should be fixed…�jstolfi weighs in:

The core devs tried to activate BIP66 through a very soft fork, so that clients would not even know that it was happening (otherwise they might get alarmed at the word “fork”). So they just let the new rule to be silently activated as soon as 95% of the miners signaled that they had upgraded to the new version of the software (v3). To make the transaction as smooth as possible, they allowed the players (clients, relay nodes, and miners) running both v2 and v3 to talk to each other even after the transition.

But that plan backfired because some v3 miners got a block B from one of the few remaining v2 miners and started to mine on top of it, not realizing that B was invalid under the v3 rules. For a while, that was the longer branch. That branch was perfectly valid for clients still running v2, and was assumed to be valid by some v3 wallet apps that did not do full checking of the blockchain. Meanwhile, other v3 miners, realizing that B was invalid, ignored that branch and started growing (more slowly) their own branch. The ‘bad’ branch was already 6 blocks long when the core devs (who fortunately were watching the blockchain at the time) managed to warn those miners that they were mining an invalid branch. Those 6 blocks were then discarded, and the ‘good’ branch soon overtook it. Fortunately there were no double-spends, and all transactions that were confirmed in the ‘bad’ branch were eventually confirmed in the ‘good’ branch too.

The same problem occurred again a few hours later, and this time the ‘bad’ branch only got to 3 blocks before being abandoned. It is not known whether there were double spends this time.

To guard against possible repeats of the incident, possibly with double-spends, the devs had to issue a warning to all clients (even v3 ones, depending on the software they are using) to wait 30 confirmations (5 hours) for safety.

Thus, what was supposed to be a “stealth” fork became a major PR disaster.

IMHO, the devs blotched the fork. They should have programmed a delay of (say) 2 weeks between the “95% majority” event and the enabling of the BIP66 rules. Then they could have sent a waring to all v2 players, especially the remaining v2 miners and relay nodes, that they should upgrade before BIP66 went into effect. But that would have been bad PR… ha ha.

One thing is the ‘consensus rules’ that say when a block is valid. Another thing is the algorithm that miners use when building the blocks that they try to mine. The ‘v3’ label refers to the former only. By stamping ‘v3’ on their mined blocks, they only indicated that they agreed to the version of the ‘consensus rules’ that enforces BIP66 after the triger event.

The software that those miners were running would indeed have checked the BIP66 rule, if it got a chance to do so. But the software only checked the transactions to be included in the block that they were mining, and not those of the parent block that they got from another miner.

The v3 ‘consensus rules’ say that a block is valid after the trigger event only if the transactions satisfy BIP66 (among other conditions) and the parent block is valid. But the v3 rules don’t say that miners have to fully check that the blocks that they issue are valid. It would be better for bitcoin if they did, but miners have the ‘right’ to create their blocks any way they want, even post blocks full of random bits.

The miners should want to post valid blocks rather than invalid ones, because invalid blocks don’t pay anything; but they must win the race against other miners to earn anything. They figured out that they would earn more by gambling that the previous block was valid, and mining on top of its hash only, than by downloading it and verifying it first. If the previous block was v3-valid, their block would be v3-valid too. If the previous block turned out tobe invalid, well, bad luck.

The Bitcoin Core release that includes v3 does verify the parent block before mining on top of it; but miners are not required to run BitcoinCore, and the v3 ‘consensus rules’ do not require anyone to run a particular version of the software.

An interesting detail is how the big pools steal the hash of the most recent block from other pools, even before it gets out to the relay nodes. That is why they couldnot even check its version stamp.

All they have to do is subscribe anonymously as members of the other pools, and they will get that information as soon as the pool manager receives a mined header from some other member. The pool’s interest is to make sure that the block just mined is valid, and to put all its members to mine on top of it as soon as possible, while it its still sending it out to the relay nodes.

To be precise, a miner gets bitcoins for being the first to mine the next valid block. They are not required to verify anything (and it is not possible to check whether they are indeed verifying anything.) They only verify enough to maximize their expected gain.

In particular, when they steal the hash of a recently mined block from some other pool, they are quite confident that it will be a valid block. So they don’t bother to check it, and that gives them a few precious seconds of advantage in the block race.

Usually that is a safe assumption; it failed in this case because of the switch-on of BIP66 and the “victim” of the theft rbeiong out of date.

Bitcoiners are blinded by greed? No way that’s possible!

The post Fork you, got mine appeared first on Buttcoin Foundation.

A combination of events have coincided to form a perfect shitstorm, once again proving that Bitcoin is nowhere near ready for the big leagues. An entity known as “coinwallet.eu” has been performing stress tests on the Bitcoin network, flooding it with thousands of transactions for unknown reasons. As of this writing there are approximately forty thousand unconfirmed transactions, more or less requiring blocks to be full in order to catch up. Greedy miners pumping out empty blocks doesn’t help this situation much. For the equivalent of a few hundred dollars the Bitcoin network can be choked to death with a whopping 2�transactions per second.

Meanwhile, miners are generating invalid blocks, failing at the one job they have. A recent change to the Bitcoin client software has led to some… issues.

For several months, an increasing amount of mining hash rate has been signaling its intent to begin enforcing BIP66 strict DER signatures. As part of the BIP66 rules, once 950 of the last 1,000 blocks were version 3 (v3) blocks, all upgraded miners would reject version 2 (v2) blocks.

Early morning on 4 July 2015, the 950/1000 (95%) threshold was reached. Shortly thereafter, a small miner (part of the non-upgraded 5%) mined an invalid block–as was an expected occurrence. Unfortunately, it turned out that roughly half the network hash rate was mining without fully validating blocks (called SPV mining), and built new blocks on top of that invalid block.

Note that the roughly 50% of the network that was SPV mining had explicitly indicated that they would enforce the BIP66 rules. By not doing so, several large miners have lost over $50,000 dollars worth of mining income so far.

All software that assumes blocks are valid (because invalid blocks cost miners money) is at risk of showing transactions as confirmed when they really aren’t. This particularly affects lightweight (SPV) wallets and software such as old versions of Bitcoin Core which have been downgraded to SPV-level security by the new BIP66 consensus rules.

Essentially some miners are farting out blocks that don’t fit within the new standards and other miners, in a rush to fuck you and get theirs, are grabbing these invalid blocks and building the blockchain upon them, leading to forks as some clients reject these broken blocks and others keep on truckin’, regardless of the validity of their transactions. It’s now advised to wait for 30 confirmations instead of 6, because, much like VISA and Mastercard, you have to wait an entire day for your card to be approved.

The flood of test transactions on top of this is like diarrhea icing on a shit cake.

The post Bitcoin is Broken (But We Already Knew That) appeared first on Buttcoin Foundation.

In between Butterfly Labs buying Buttcoin and the FTC saying “buttcoin,” we made the move to our new home here at the Buttcoin Foundation. We did, however, suffer a grievous loss during the move: many of our posts highlighting the best Bitcoin mining rigs were lost. Today this changes.

Some of these may be repeats, but here is the Buttcoin Foundation’s entire collection of amazing mining rigs.

The post Mining Rig Megapost appeared first on Buttcoin Foundation.

At the request of the Federal Trade Commission, a federal court has shut down Butterfly Labs, a Missouri-based company that allegedly deceptively marketed specialized computers designed to produce Bitcoins, a payment system sometimes referred to as �virtual currency.�

The FTC�s complaint against the company and its corporate officers alleges that Butterfly Labs charged consumers thousands of dollars for its Bitcoin computers, but then failed to provide the computers until they were practically useless, or in many cases, did not provide the computers at all.

The post Float like a butterfly, sting like the FTC appeared first on Buttcoin Foundation.

We’ll be updating it regularly, as we’ve collected a shameful amount of pictures and videos, and mechanisms are in place to submit your own sad computers as well. If you’d like to follow on Facebook, you can do so here.

The post Get Bit or Die Mining appeared first on Buttcoin Foundation.

What could this be? Some sort of HVAC installation? Read on…

The post No exquisite sin greater than central air appeared first on Buttcoin Foundation.

For context, this means that if some hopeful soul gets his BFL mining rig today, it’ll be churning out bitcoins at less than one-fifteenth the rate they expected when they placed the order a year ago.

Even with the residual higher price of bitcoins following this year’s bubble (currently about nine times higher), they’re still only clearing 60% of the real money that they were hoping for at the end of the day.

And that’s before even factoring in things like the tripled electricity usage. And IF they manage to cash out at all despite all the new regulatory hurdles. And IF they got their hardware today, before anything else in these numbers goes haywire. (And IF it works perfectly.)

Bitcoin!�

The post Bitcoin mining difficulty jumps up nearly 20% today appeared first on Buttcoin Foundation.

Butterfly Labs has a long and horrible history with their mining rigs. They started taking pre-orders over a year ago, with a ship time sometime in late July. After numerous delays in production, shipping problems and general incompetence, the only thing they’ve managed to get out the door are some of their tiniest miners, the Jalapenos. And those mainly ended up in the hands of reviewers and blogs in order to keep pumping the Butterfly Labs hype train and securing millions of dollars of pre-orders still in limbo.

Lucky BFL forums user Luke-JR however scored a sweet Mini Rig from Butterfly Labs (it’s just a coincidence he’s a driver developer for them I’m sure). This rig was originally promised to produce 1500 GH/shashing power at 1500 watts for $30,000, but has since seen it’s hashing power slashed to a third of what was promised and it’s power consumption increased 75%, now just offer 500 GH/s at 2400 watts. They’ve promised to make good on pre-order buy sending out 3 rigs to match the initial hashing rate, so now it’s only 1500 GH/s at 6900 watts, a reduction in GH/Watt by a factor of 5.

So what does $22,484 buy you? Take a look!

Minirig is here!

Today, my Minirig arrived.

FedEx apparently dropped it somewhere along the way, and the weakest part of the case, the thin metal part around the back of the PSU, broke.

I’m not sure how sturdy the back side was supposed to be, but its two pieces aren’t quite together either.

The power supplies (EVGA 1500W) also created havoc interfering with the neutral on the power line. This disrupted X10 communication significantly enough that the pool overflowed because the system controlling it was unable to turn off the pump. Workaround: This PSU supports 240V, so we rewired the outlet. 240V does not use neutral, so now all should be okay.

Edit: 240V workaround is only partial. Still having problems

But the good news is, it all seems to be working for the most part.

Next up, installing it in the window so the heat goes outside

 

A twenty two thousand dollar box of electronics that is broken out of the box, that required the guy to do a sketchy electrical workaround to getpartiallyworking, that he is going to install in a window… and he’s happy about it?

In case you didn’t notice it, the delivered unit is different than the picture on the website. They had to install 2 power supplies instead of 1 and had to modify the case to fit. Also, if you didn’t notice, the LCD/Phone thingy in the front has been replaced by … a piece of cardboard spray painted black. Wonderful.

You could maybe chalk this up to a careless Fedex postman, but when you’re shipping something that costs as much as a mid-sized sedan, how bought putting a little more effort into packing? Dell and HP can ship bigger and heavier servers across the world without this kind of problem.

The unit had to hit its huge power draw increase by putting dual EVGA consumer grade power supplies in the unit.We’re talking almost a 75 amp load (6*1500/120), disregarding power factor. He could very well overload the circuit panel and trip the main breaker for the house.

Let’s take a look inside this guy. This is from an earlier version of the Minirig (note the single power supply)This is apparently from an earlier FPGA but it will give you a good glimpse at what kind of craftsmanship you can expect from a computer that is half the average household income in the United States.

Consumer grade PSU and cheap USB hubs glued to the inside case.

Electrical tape and random velcro glued to the insides

A closer look at the USB hubs. Plugs are hot glued to stay secured.

Electrical tape everywhere, splices and voided hardware are the theme.

You can view the entire album here.

Despite all that, this thing can still mine bitcoins and it should be profitable. Keep in ind that many people jumped in on the preorders a year ago when bitcoins were still hovering around $6.50 per. Meaning customers paid 1562 bitcoins for that particular piece of shit, which at today’s value is $156,200. Aston martin money. How long will it take them to make their money back? If the difficulty didn’t change, they would make 37 bitcoins a day and recoup the initial investment in 124 days. Difficulty is jumping pretty much 20% every 12 days or so, so in the next week before adjustment, they’ll make 259, the next 12 days 369, the next 12 days 312, then 256, then 213, etc.

So by day 127, they’ll be halfway to breaking even, but by day 151 they’ll be making less than 5 bitcoins a day, and even if difficulty stopped rising at that point(which it won’t), it would take another 435 days for a total of 586 days to break even. If difficulty kept rising at the same pace, by day 200 they’d be making 2.4 bitcoins per day, and it would take 1024 days to break even with no difficulty increase. Assuming 25 cents per kw/h, and $100 a bitcoin, it would cost 0.43 of a bitcoin per day in electricity which means the unit would no longer be profitable on a power usage basis by day 307, at which point it will have produced 2620 bitcoins.

Bear in mind this is only for the first few units, and that’s running 24/7 pumping out around 24,000 BTU, so yes, medical bills from heat stroke will be on top of that.

But Alas, the chips don’t run nearly as well as they’re supposed to, frequently running too hot and giving multiple hardware failures. Coindesk noted in one of the first ever runs of the Minirig by hosting provide gigavps that it was running much too hot and erroring out.

At the time of posting, gigavps warned that the unit would be repeatedly shut down while ckolivas, who was assisting, modified the machines software to optimise performance. After some tweaking, the device was said to have been left to run continuously for two hours, and was shown to have an average hash rate of 478.1 GH/s. As you can see in the table below, ASIC number four (of a total of eight hashing chips) ran significantly hotter (86 degrees) and consequently gave the highest hardware (HW) error rate.

So, what happens if you just decide you don’t want this, you don’t want to wait over a year to get a $22,000 broken piece of shit? Nothing, because BFL won’t let you cancel your preorder because they’re now “shipping”, i.e. they sent out one unit to their own company shill.

Which is of course illegal regardless of what Butterfly Labs may say.

So in summary: Don’t buy anything from Butterfly Labs … ever.

UPDATE:Butterfly Labs get a miner seized in Germany for faking CE certifications.

The post The $22,484.00 Butterfly Labs Mini Rig bitcoin miner is a huge, broken, unstable piece of shit. appeared first on Buttcoin Foundation.

The post Bitcoiners fall for yet another blatantly obvious scam appeared first on Buttcoin Foundation.

Twitter user @spyshake� tweeted out this picture today. Admitting you have a problem is the first step to recovery and we’re thrilled you’ve started on this journey.

https://twitter.com/spyshake/status/340216336435265536

Rehosted:

The post Use this one weird old tip by a single mom to save money while mining bitcoins. appeared first on Buttcoin Foundation.