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.

tatertatertatertot

“bitcoins.” and then he
laughed. but who laughs last? (the one
who laughed at bitcoin.)

nobodybelievesyou

frictionless money
futuristic and secure
sorry for your loss

Purplekeyboard

Every Bitcoin tale
Begins with, “Fuck you, got mine!”
Ends, “Fuck, you got mine!”

Unistrut

Bitcoin price falls down
Hold the line! Trust Satoshi!
Tears fall, like your coins.

kadonka

reassuring words
with eerie robot cadence
hi i’m roger ver

Paradigmist

hey, I liked your post
have a penny for your thoughts
WHOA, WHAT JUST HAPPENED?

serpentine91

To the Moon we go
Oh no, the price crashed again
Back to Mom’s Basement

PoopToucher3000

it’s that time again
please post the number for the
suicide hotline

Not to be outdone, SA forums goons got in on the action:

Trig Discipline

“cryptocurrency”
means “even you can’t find it”
sorry for your loss

at least tulip bulbs
grow into pretty flowers
bitcoin’s just hot air

Sweevo

all this mining heat
dries my strawberries nicely
help i have heatstroke

bucketmouse

eternal cycle
screaming, smug, crying, giddy, sad
cryptocurrency

theflyingexecutive

dread pirate roberts
will rot for life in prison
please send magazines

The post Bitcoin haiku 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.

In case you needed more proof that bitcoiners don’t understand humor, SA Forums goon surebet went wading through the�shitheap at Bitcointalk to find more “jokes” written by them. He is a braver man than I.

One evening the bitcoin blockchain came to a halt, it turns out Chuck Norris had mined all the remaining bitcoins, and the difficulty was larger than Graham’s number.

Q: Why is there no gold at the end of the rainbow?
A: The Leprechaun took it and traded it for bitcoins!

lol bitcoin its orange .
orange not give happines
but always gives money
how my jokes cans makes you laugh right ?

Why did the bitcoin cross the road?

To get to the china bubble

Knock Knock.

Who’s there?

Bitcoin.

Bitcoin Who?

A peer-to-peer decentralized crypto-currency that utilizes open source software and public ledger called the blockchain to provide proof of work in solving the encrypted transactions ultimately increasing security and control in your personal finances.

How many Bitcoins does it take to screw the banking system?
Moon.

Jack and jill went up a hill, both with half a bitcoin.

Jill came down with 1 bitcoin, that fucking whore.

Schrodinger’s cat knows your private key. Maybe.

How do you make enough time for all the work and play with your computer?
– You don’t. You mine with the GPU.

How do you know it’s P2Pool?
– Balance still 0.00000000 after months of mining.

How do you know it’s Bitcoin?
– All your inputs are less than the minimum fee per input.

Why did the Bitcoin cross the silkroad?

To commit computer hacking, traffic in fraudulent identification documents, and money laundering conspiracy.

Is that an Antminer in your pocket, or are you just happy to see me.

A Gavincoin and an MPCoin meet in a bar. Says Gavincoin to MPcoin: ‘fork you!’ Says Mpcoin to Gavincoin: ‘No, fork you!’

A Bitcoiner jumps into a cab…

Cabbie: Where to, bud?
Bitcoiner: Just take me for a ride.

A Shitcoiner jumps into a cab…

Cabbie: Where to, bud?
Shitcoiner: What makes you think I’m goin’ anywhere?

A Dogecoinger jumps into a cab…

Cabbie: Where to, bud?
Dogecoiner: Very far. Much fast. Wow.
Cabbie: Wow, as in Bow?
Dogecoiner: So clever.

The post Bitcoin is still the punchline appeared first on Buttcoin Foundation.

Erenthal:

uncurable mlady:

Erenthal:

Furthermore, it seems that Karpeles and other Bitcoin superstars have been around much longer than anyone knew.

Erenthal:

Nenonen:

Sweevo:

Alan Smithee:

Nenonen:

Nenonen:

pylb:

triple sulk:

The post Karpeles Did It and the Fine Art of Buttcoin appeared first on Buttcoin Foundation.

Bitcoin Jesus 2.0 Roger Ver’s been denied re-entry to the United States recently, since he’s a whiny jerkwad who threw a fit over taxes and renounced his citizenship. He can’t come to various Bitcoin conferences in person, so in the vein of fellow Bitcoin criminal Charlie Shrem, he’s going to attend conferences via an iPad on wheels.

To celebrate this development, goons spent the afternoon thinking up better names for this arrangement than “Double” or “iPad on a stick”.

Powershift:

prick on a stick

snake on a rake

knave on a stave

Barnyard Protein:

con on a baton

My PIN is 4826:

dick on a stick

fake on a stake

Tanith:

Fraud rod

shrem-stem

Graft Shaft

Alan Smithee:

shitheels on wheels

Dex:

rolling blunder

vOv:

tripe on a pipe

Nenonen:

spergway

ayn rand hand job:

freep on a leash

Exinos:

Sovereign stickizen

PleasureKevin:

free man on the stand

Thanks to all the goons above whose work I have shamelessly stolen in the name of the Buttcoin Foundation.

The post Roger Ver’s head on a stick appeared first on Buttcoin Foundation.

I have no idea what the hell a “bearwhale” is supposed to be because I don’t closely enough study these weird supernerds, but here is a bunch of utterly bizarre Bitcoin cult imagery (click to enlarge):

In conclusion:

uncurable mlady posted:
I think Bitcoin enthusiasts might be dumb.

 

The post I am the Bearwhale, goo goo g’joob appeared first on Buttcoin Foundation.

Just like the title says. Logs and depositions are coming out showing how much BFL did to defraud customers, other companies, banks, and whatever else. Some highlights:

See below

HOW CAN I GET ONE OF THESE

I can single-handedly build a house faster than it takes for BFL to ship.

�Box of fans� is apparently an official BFL product

Yes what is �structuring�?

You can find more of these wonderful and amazing documents here and here.

UPDATED:

evilweasel posted:
interim order:

https://www.documentcloud.org/docum…17531-54-0.html

there’s a lot of boilerplate bullshit but the very short version is they can ship out already paid for and finished machines, provided the customer wants them and not a refund, but that’s about it, and in 35 days they can submit a business plan to try to let BFL continue as a going company. this order is the FTC getting everything they wanted, in practice.

the slightly longer version:

1)they are forbidden from taking pre-orders
2)they can’t even think about touching any money or property of bfl, except to turn it over to the receiver
3)every single ‘defendant’ (bfl AND three of the heads) must bring every asset they own into the US and disclose it to the receiver. every asset, not just ones they might have stolen from bfl
4)every single defendant must also provide a complete financial accounting to the receiver – again, of their personal stuff as well
5)the temporary receiver stays in control and can do whatever the fuck he thinks is best
6)bfl can ship machines to people who want a machine but not a refund

without an order from the court:
7)bfl is prohibited from “burn-in” testing
8)bfl CANNOT make refunds
9)bfl can’t make any new sales at all

now, they have 35 days to come up with a business plan that:
1)replaces burn-in testing or justifies and discloses it (and what they’ll do with the money)
2)protects customers and their refund rights
3)lets it keep going as a business

my money is on that business plan gets laughed out of court and the company gets liquidated

FCKGW posted:
from reddit:

There are some other intersting items in there
1) No refunds to be issued until audited financial statements are submitted to the court and calculation of assests vs liabilities. They only have 1.2 million in cash on hand and owe ?? from pre-paid orders wanting refunds. Likely to be calculated using the FTCs anyone who wants a refund can request one regardless of BFLs sketchy limitaions.
2) All holdings in Bitcoin to be converted to USD as soon as practical at sub $400 each probably
3) Work by BFL principals is unpaid
4) Business plan will likely require BFL to produce new miners upfront and sell only those units already produced.
5) The principal outside the US doesnt appear to be cooperating with the court / receiver
Seems highly unlikely that BFL and its principals have the capital to cover the liabilities re: refunds let alone front the cost to develop & produce new equipment prior to sale.

…! posted:
The entire order is fascinating. It freezes not just the assets of the company, but also the personal assets of Sonny and Jody. They basically have to ask permission from the temporary receiver to buy just about anything.

It also requires BFL to transfer all of their bitcoins to a court-operated wallet. They’ll be exchanged for USD, which will likely go to benefit the victimized customers. I wonder what the “my bitcoins literally cannot be taken away from me by any government unless I so choose” bitcoiners will make of this.

The post Butterfly Labs is fucked appeared first on Buttcoin Foundation.

The post BTC as seen on TV appeared first on Buttcoin Foundation.