Writen by BitMEX Grantee Rene Pickhardt Abstract: Valves are an important tool for flow control in fluid or gas networks. We investigate the possibilities to set up valves on the Lightning Network to improve flow control and reduce expected payment failure rates. We show that good asymmetric choices for `htlc_maximum_msat` on a channel can reduce...Read More
Writen by BitMEX Grantee Calvin Kim Abstract: Bailey and Sankigiri, in their paper “Merkle Trees Optimized for Stateless Clients in Bitcoin” present a new accumulator design for storing bitcoin state, claiming a dramatic improvement over previous work in Utreexo. However, we have identified flaws in the code used to claim these improvements. We show a...Read More
Abstract: In this piece we discuss the degree of censorship resistance in Ethereum after the merge, in the context of the recent decision by the United States Treasury’s Office of Foreign Assets Control (OFAC) to sanction the Tornado Cash contract on Ethereum. This report focuses on the technical characteristics and specifications of the Proof of...Read More
Abstract In this piece we discuss the possibility of a chain split when the merge occurs on Ethereum, resulting in an ETH2 coin and a new ETHPoW coin. We examine the viability of the ETHPoW chain, which is almost guaranteed to be a minority chain with respect to the coin price and economic chain usage....Read More
Abstract: In this piece we explore why Dapps are typically built on Ethereum rather than Bitcoin, which takes us all the way back to March 2014. We examine a debate about whether and how a Dapp protocol called Counterparty should use Bitcoin’s blockchain. This was sometimes called “The OP_Return Wars”. We explain the history of...Read More
This article is also available on Gleb’s personal blog here. In this article, we attempt to design smart contracts encouraging miners to withhold a certain transaction, to better understand how practical such smart contracts are. Better understanding these contracts is relevant in the broad Bitcoin context, and for better understanding the security of time-sensitive Bitcoin...Read More
Abstract: In this piece we take a second look at Taproot. We explain the mechanics of Taproot by walking through two example Taproot transactions on the Bitcoin mainnet, including spending Bitcoin sent to the same address in two different ways: i. Using the Schnorr signature and ii. Using the Tapleaf and the so-called un-tweaked public...Read More
We investigate the technical boundaries and limitations of the number of possible Bitcoin payments that can eventually be conducted via the Lightning Network. While it is only possible to study this question with more or less reasonable and debatable assumptions, we suggest considering natural congestion and depletion of channel liquidity due to selfish routing strategies...Read More
Date Activation Block Number BIP Number or Software Version Description Type Outcome 28 July 2010 n/a1 0.3.5 OP_RETURN disabled, fixing a critical bug which enabled anyone to spend any Bitcoin. Softfork No evidence of any issues during this upgrade. 31 July 2010 n/a1 0.3.6 OP_VER and OP_VERIF disabled.3 Softfork Some users had trouble upgrading and it...Read More
This chapter originally appeared in the book “Bitcoin: A Work In Progress” by Sjors Provoost. Learn more at https://btcwip.com/. This chapter discusses open source software in the context of why it matters that Bitcoin software is open source. But it also delves into the reason why even open source software doesn’t necessarily solve all software-specific...Read More
Abstract: We examine a mining and transaction selection system on Ethereum called “Flashbots”. Flashbots is a potential mitigation against the so-called MEV problem. Over 90% of Ethereum miners subscribe to the Flashbots centralised and trusted service and we discuss the implications of this and the degree to which this contributes to Ethereum centralisation. We conclude...Read More
Abstract: We examine and explain a proposed softfork upgrade to Bitcoin, OP_CTV (Check Template Verify). This feature would enable users to commit to spending a Bitcoin output, only under certain restricted conditions. The main proponent of this upgrade, Jeremy Rubin, in a bold move, recently announced the imminent release of a new client with OP_CTV...Read More
Abstract We take a look at where we are in the Bitcoin mining cycle. We compare current market conditions to the gold mining industry in 2012 to 2014 and note the mad rush of capital flowing into the space. We project significant increases in both the network hashrate and financial failures in the mining space,...Read More
I read through the engaging and addictive book in just two days. The Cryptopians includes fascinating behind the scenes details on the early days of Ethereum. It focuses on the character flaws of the main people involved and various early disputes and confrontations. The book then moves on to its two main topics, The Dao...Read More
In February 2022, Gleb Naumenko (Bitmex grant recipient) and Antoine Riard posted a CoinPool whitepaper. The earlier version of the project received less technical coverage in Bitcoin Magazine. This post attempts to build up some intuition on the CoinPool proposal by answering questions based on the feedback. It is aimed at slightly-technical readers (those, who...Read More
Abstract: We provide a follow on to our March 2020 piece, Inflation Is Coming. Inflation has now reached the highest levels since the early 1980s and the Fed will and must tighten liquidity conditions in response. Despite what some think, we believe this inevitable tightening of liquidity conditions will have a significant impact on consumer...Read More
Abstract: In this short and simple piece, we take a look at a list of the lowest block hash values in Bitcoin history. We also compare the block hash values with the difficulty target and identify blocks where the block hash was lowest relative to the necessary target. The Bitcoin block mined on 15 June...Read More
Abstract: In this report we look at address re-use in Bitcoin. Address re-use is generally considered as a bad privacy practice and unfortunately it remains at an elevated level. Currently around 50% of transaction outputs are sent to previously used addresses. Although the situation has improved somewhat since 2013, when the 75% level was breached....Read More
Abstract: We examine the idea of outsourcing stake to third party validators in the Proof of Stake process, which potentially decouples the coin holders from the consensus agents. We explain why such services are likely to be popular due to some attractive advantages for users, such as the issuance of tokens and higher yields. We...Read More
Abstract After launching our Ethereum Proof of Stake (PoS) validator node a few weeks ago, in our first detailed look at the PoS system, we catalog and examine each type of reward and penalty that validators can obtain. We provide examples for many of the scenarios based on the live system and comment on the...Read More
Abstract Following on from our February 2019 piece, “Anatomy Of The Next Global Financial Crisis” and our March 2020 piece “Inflation Is Coming”, we thought now might be an appropriate time for another opinion-filled macro rant. We explore the recent pick up in inflation to over 5% and discuss the increasingly fraught predicament central bankers...Read More
BitMEX Research is delighted to announce that as of 31 August 2021, we have become an active staker on the Ethereum Beacon chain (Eth 2.0). Our validator number is 222,424. Within a few hours we had already proposed our own block, slot 1,964,794 in Epoch 61,399. This is pretty exciting and it felt like quite...Read More
Overview Following the recent publication of a new proposed Proof of Reserves-based system which preserves user privacy, we are now ready to provide a working example. The BitMEX platform is used as an example, based on a one-off snapshot for demonstration purposes at Bitcoin block height 693,062. This block was produced on 28 July 2021....Read More
Abstract: We examine the state of proof of assets and proof of liability schemes in the cryptocurrency space, systems whereby exchanges publish a list of user balances, which add up to the total exchange liability. Users are then able to verify their balance is included in the list, proving assurance over the solvency of the...Read More
Chapter 21 of the book The Blocksize War is published below. The full book is available on Amazon. As a reminder, 50% of any profits from physical book sales will be donated to Médecins Sans Frontières, a charity that provides medical assistance to people affected by conflict, epidemics, disasters, or exclusion from healthcare.* * Note:...Read More
Chapter 20 of the book The Blocksize War is published below. The full book is available on Amazon. As a reminder, 50% of any profits from physical book sales will be donated to Médecins Sans Frontières, a charity that provides medical assistance to people affected by conflict, epidemics, disasters, or exclusion from healthcare.* * Note:...Read More
Chapter 19 of the book The Blocksize War is published below. The full book is available on Amazon. As a reminder, 50% of any profits from physical book sales will be donated to Médecins Sans Frontières, a charity that provides medical assistance to people affected by conflict, epidemics, disasters, or exclusion from healthcare.* * Note:...Read More
Chapter 18 of the book The Blocksize War is published below. The full book is available on Amazon. As a reminder, 50% of any profits from physical book sales will be donated to Médecins Sans Frontières, a charity that provides medical assistance to people affected by conflict, epidemics, disasters, or exclusion from healthcare.* * Note:...Read More
Chapter 17 of the book The Blocksize War is published below. The full book is available on Amazon. As a reminder, 50% of any profits from physical book sales will be donated to Médecins Sans Frontières, a charity that provides medical assistance to people affected by conflict, epidemics, disasters, or exclusion from healthcare.* * Note:...Read More
Chapter 16 of the book The Blocksize War is published below. The full book is available on Amazon. As a reminder, 50% of any profits from physical book sales will be donated to Médecins Sans Frontières, a charity that provides medical assistance to people affected by conflict, epidemics, disasters, or exclusion from healthcare.* * Note:...Read More
