Bitcoin pulse, guides and news: FAQs, Resources, and Information Megathread

Tuesday, December 3, 2019

FAQs, Resources, and Information Megathread

Introduction

This FAQ and information thread serves to inform both new and existing users about common Bitcoin topics that readers coming to this Bitcoin subreddit may have.

What is /r/bitcoincashbch?

The /r/bitcoincashbch reddit community was originally created as a community to discuss bitcoin. On the original /r/btc subreddit it was discovered that moderators were heavily censoring discussions that were not inline with their own opinions. People from all three camps (BCH, BSV, and BTC) all suffered from imposed arbitrary unilateral censorship, politically motivated and undisincentivized due to the vacuum of power and the lack of any real checks and balances. David Shares (/u/BitcoinXio), former BuzzFeed and alternative-news spam article extraordinaire, was the main perpetrator behind this censorship.

Once realized, the subreddit subscribers began to openly question the censorship which led to virtually the entire BSV community being censored, the BTC community being picked off from the bottom up, and all other dissenters getting outcasten as blasphemers against Bitcoin ABC. Reasons for censorship include unfair standards on arbitrarily defined "abuse" while allowing much much worse abuse to occur, unfair standards on arbitrarily defined spam, flat-out lies, and personal grudges. Although many emails and interactions were endeavored, no intervention from the bitcoin.com leadership ever resolved the issues. Many of us are still banned to this day, despite doing everything in our power to try to be let back in and take second chances or ask for a fair trial of our actions.

Why is censorship bad for Bitcoin?

As demonstrated above, censorship has become prevalent in almost all of the major Bitcoin communication channels. "Censorship can really hinder a society if it is bad enough. Because media is such a large part of people’s lives today and it is the source of basically all information, if the information is not being given in full or truthfully then the society is left uneducated [...] Censorship is probably the number one way to lower people’s right to freedom of speech." It's important to think critically and independently, and have an open mind.

What is the goal of /r/bitcoincashbch?

This subreddit is a diverse community dedicated to the success of bitcoin. /r/bitcoincashbch honors the spirit and nature of Bitcoin being a place for open and free discussion about Bitcoin without the interference of moderators. The only real thing regulated by moderators is interpersonal conduct, as initiating personal attacks are not allowed. We enforce this rule to keep a positive, cohesive, and friendly atmosphere. Subscribers at anytime can look at and review the public moderator logs.

What is Bitcoin?

Bitcoin is a digital currency, also called a virtual currency, which can be transacted for a low-cost nearly instantly from anywhere in the world. Bitcoin also powers the blockchain, which is a public immutable and decentralized global ledger. Unlike traditional currencies such as dollars, bitcoins are issued and managed without the need for any central authority whatsoever. There is no government, company, or bank in charge of Bitcoin. As such, it is more resistant to wild inflation and corrupt banks. With Bitcoin, you can be your own bank. Read the Bitcoin whitepaper to further understand the schematics of how Bitcoin works.

What is Bitcoin Cash?

Bitcoin Cash (ticker symbol: BCH) is an updated version of Bitcoin which solves the scaling problems that have been plaguing Bitcoin Core (ticker symbol: BTC) for years. Bitcoin (BCH) is just a continuation of the Bitcoin project that allows for bigger blocks which will give way to more growth and adoption. You can read more about Bitcoin on BitcoinCash.org or read What is Bitcoin Cash for additional details.

How do I buy Bitcoin?

You can buy Bitcoin on an exchange or with a brokerage. If you're looking to buy, you can buy Bitcoin with your credit card to get started quickly and safely. Make sure to do your homework first before choosing an exchange to ensure you are choosing the right one for you. See below in "Resources" for more information.

How do I store my Bitcoin securely?

After the initial step of buying your first Bitcoin, you will need a Bitcoin wallet to secure your Bitcoin. Knowing which Bitcoin wallet to choose is the second most important step in becoming a Bitcoin user. Since you are investing funds into Bitcoin, choosing the right Bitcoin wallet for you is a critical step that shouldn’t be taken lightly. Use this guide to help you choose the right wallet for you.

Why is my transaction taking so long to process?

Bitcoin transactions typically confirm in ~10 minutes. A confirmation means that the Bitcoin transaction has been verified by the network through the process known as mining. Once a transaction is confirmed, it cannot be reversed or double spent. Transactions are included in blocks.

If you have sent out a Bitcoin transaction and it’s delayed, chances are the fee you used wasn’t enough to out-compete others causing it to be backlogged. The transaction won’t confirm until it clears the backlog. This typically occurs when using the Bitcoin Core (BTC) blockchain due to poor central planning.

If you are using Bitcoin (BCH), you shouldn't encounter these problems as the block limits have been raised to accommodate a massive amount of volume freeing up space and lowering transaction costs.

Why does my transaction cost so much, I thought Bitcoin was supposed to be cheap?

As described above, transaction fees have spiked on the Bitcoin Core (BTC) blockchain mainly due to a limit on transaction space. This has created what is called a fee market, which has primarily been a premature artificially induced price increase on transaction fees due to the limited amount of block space available (supply vs. demand). The original plan was for fees to help secure the network when the block reward decreased and eventually stopped, but the plan was not to reach that point until some time in the future, around the year 2140. This original plan was restored with Bitcoin (BCH) where fees are typically less than a single penny per transaction.

What is the block size limit?

The original Bitcoin client didn’t have a block size cap, however was limited to 32MB due to the Bitcoin protocol message size constraint. However, in July 2010 Bitcoin’s creator Satoshi Nakamoto introduced a temporary 1MB limit as an anti-DDoS measure. The temporary measure from Satoshi Nakamoto was made clear three months later when Satoshi said the block size limit can be increased again by phasing it in when it’s needed (when the demand arises). When introducing Bitcoin on the cryptography mailing list in 2008, Satoshi said that scaling to Visa levels “would probably not seem like a big deal.”

What is the block size debate all about anyways?

The block size debate boils down to different sets of users who are trying to come to consensus on the best way to scale Bitcoin for growth and success. Scaling Bitcoin has actually been a topic of discussion since Bitcoin was first released in 2008; for example you can read how Satoshi Nakamoto was asked about scaling here and how he thought at the time it would be addressed. Fortunately Bitcoin has seen tremendous growth and by the year 2013, scaling Bitcoin had became a hot topic. For a run down on the history of scaling and how we got to where we are today, see the Block size limit debate history lesson post.

What is a hard fork?

A hard fork is when a block is broadcast under a new and different set of protocol rules which is accepted by nodes that have upgraded to support the new protocol. In this case, Bitcoin diverges from a single blockchain to two separate blockchains (a majority chain and a minority chain).

What is a soft fork?

A soft fork is when a block is broadcast under a new and different set of protocol rules, but the difference is that nodes don’t realize the rules have changed, and continue to accept blocks created by the newer nodes. Some argue that soft forks are bad because they trick old-unupdated nodes into believing transactions are valid, when they may not actually be valid. This can also be defined as coercion, as explained by Vitalik Buterin.

Doesn't it hurt decentralization if we increase the block size?

Some argue that by lifting the limit on transaction space, that the cost of validating transactions on individual nodes will increase to the point where people will not be able to run nodes individually, giving way to centralization. This is a false dilemma because at this time there is no proven metric to quantify decentralization; although it has been shown that the current level of decentralization will remain with or without a block size increase. It's a logical fallacy to believe that decentralization only exists when you have people all over the world running full nodes. The reality is that only people with the income to sustain running a full node (even at 1MB) will be doing it. So whether it's 1MB, 2MB, or 32MB, the costs of doing business is negligible for the people who can already do it. If the block size limit is removed, this will also allow for more users worldwide to use and transact introducing the likelihood of having more individual node operators. Decentralization is not a metric, it's a tool or direction. This is a good video describing the direction of how decentralization should look.

Additionally, the effects of increasing the block capacity beyond 1MB has been studied with results showing that up to 4MB is safe and will not hurt decentralization (Cornell paper, PDF). Other papers also show that no block size limit is safe (Peter Rizun, PDF). Lastly, through an informal survey among all top Bitcoin miners, many agreed that a block size increase between 2-4MB is acceptable.

What now?

The core Bitcoin protocol is set in stone, but the various implementation are working on various scaling, privacy, and operability/programmability enhancements. The best way you can contribute to Bitcoin is by building on and using Bitcoin. Start a small business, program a useful application, perform jobs for others in return for Bitcoin Cash, and pay others in Bitcoin Cash when and where possible. We can't get rid of fiat currency by sitting on our hands. The time for change is now.