When users underpay fees, their transactions gets stuck because miners have more profitable opportunities.
Users are left with 2 options:
a) wait until fee levels drop
b) tell miners they will increase fees
1\ There is an alarming amount of misinformation (fueled by the media) on what exactly happened to Bitcoin yesterday, and whether funds were "double spent"
Here's everything you need to know 👇
When users underpay fees, their transactions gets stuck because miners have more profitable opportunities.
Users are left with 2 options:
a) wait until fee levels drop
b) tell miners they will increase fees
Put simply, RBF is a copy-and-paste of the original transaction with higher fees and an explicit instruction to favor the new transaction instead.
So the user decided to issue an RBF on the 19th with higher fees... but not high enough!
And the transaction was again stuck...
This time around the user paid enough fees.
1) Dec 18th 22:11 UTC (1 sat/b)
2) Dec 19th 21:22 UTC (9.4 sat/b)
3) Dec 20th 00:32 UTC (14.3 sat/b)
And here's where things get a bit more complex
When this happens (1+ times per month), miners need to converge on a single version of events, which often takes around 1 block, or 10 min.
-One miner picked the first (low fee) transaction for their version of the chain
-The other miner picked up the third (highest fee RBF transaction)
In this occasion it might have looked like a malicious "double spend" (inflation), but it is a completely normal event.
The important thing to know is that, yes, there might be different versions of the same transaction, but ONLY 1 will ultimately be accepted.
No reason to freak out. No inflation, no "double-spend" was actually confirmed. Just a ton of loud ignorance and misinformation.
You benefit by serving crypto adds. I urge you to at the very least understand your responsibility and step up your technical game.
How about sponsoring a bitcoin developer?
Their depiction of what happened was accurate. Unfortunately, their post was grossly misrepresented misrepresented for clickbait...
More from Bitcoin
Another #FreeLoveFriday. So far, I’ve covered Bitcoin, Mastercoin/Omni, and last week ChainLink and the importance of decentralized oracles. Today, let’s talk about one of the most fascinating projects in crypto - @MakerDAO
In my thread about Mastercoin, I briefly touched on the vital role fiat-backed stablecoins play in crypto markets, but there’s a catch with them:
The counterparty risk of a third-party holding fiat in reserves.
Enter MakerDAO, which set out to create a decentralized, collateral-backed cryptocurrency, DAI, that would be “soft-pegged” to the U.S. Dollar using the power of algorithms. In crypto tradition, its supporters said trust game theory, not operators.
In 2017, MakerDAO published a whitepaper describing a system where anyone could create DAI by leveraging ETH as collateral to create Collateralized Debt Positions. Essentially, you take out a digital USD loan against your crypto.
The game theory of the system is structured such that DAI issuance is controlled to keep the price pegged to $1.00. In essence, it buffers the fluctuations of the underlying collateral to create a synthetic dollar bill.
Back with another #FreeLoveFriday. Last time, we covered how Mastercoin/@Omni_Layer pioneered digital asset issuance on blockchains. Today, let\u2019s discuss @Chainlink and the vital role it plays in connecting blockchains to the real world. https://t.co/0poYIBtGrt
— Emin G\xfcn Sirer (@el33th4xor) January 22, 2021
In my thread about Mastercoin, I briefly touched on the vital role fiat-backed stablecoins play in crypto markets, but there’s a catch with them:
The counterparty risk of a third-party holding fiat in reserves.
Enter MakerDAO, which set out to create a decentralized, collateral-backed cryptocurrency, DAI, that would be “soft-pegged” to the U.S. Dollar using the power of algorithms. In crypto tradition, its supporters said trust game theory, not operators.
In 2017, MakerDAO published a whitepaper describing a system where anyone could create DAI by leveraging ETH as collateral to create Collateralized Debt Positions. Essentially, you take out a digital USD loan against your crypto.
The game theory of the system is structured such that DAI issuance is controlled to keep the price pegged to $1.00. In essence, it buffers the fluctuations of the underlying collateral to create a synthetic dollar bill.
The defi matrix
As each asset class goes on-chain, it can be stored in a digital wallet. And it can be traded against other such assets. Not just cryptocurrencies, but national digital currencies, personal tokens, etc.
We’re about to enter an age of global monetary competition.
The defi matrix is the table of all pair wise trades. It’s the fiat/stablecoin pairs, the fiat/crypto pairs, the crypto/crypto pairs, and much more besides.
Uniswap-style automatic market making for everything. Every possession you have, constantly marked to market by ~2040.
More liquidity, less currency?
This is an interesting point. Cash doesn’t make you money. In fact, it can lose you money in an inflating environment.
Reliable, 24/7 mark-to-market on everything is hard — but if achieved, means less % of assets in cash.
AMMs boost BTC. Here's why.
- All assets trade against all assets in the defi matrix
- Automated market makers give liquidity for rare pairs
- Everything is marked-to-market 24/7
- Value of cash drops, as you can liquidate instantly
- The new no-op is to keep your assets in BTC
Basically, automated market makers like @Uniswap boost BTC in the long term, because they allow *everything* to be priced in BTC terms, and *anyone* to switch out of BTC into their asset of choice.
Though in practice this may mean WBTC/RenBTC [or ETH!] rather than BTC itself.
As each asset class goes on-chain, it can be stored in a digital wallet. And it can be traded against other such assets. Not just cryptocurrencies, but national digital currencies, personal tokens, etc.
We’re about to enter an age of global monetary competition.
The defi matrix is the table of all pair wise trades. It’s the fiat/stablecoin pairs, the fiat/crypto pairs, the crypto/crypto pairs, and much more besides.
Uniswap-style automatic market making for everything. Every possession you have, constantly marked to market by ~2040.
More liquidity, less currency?
This is an interesting point. Cash doesn’t make you money. In fact, it can lose you money in an inflating environment.
Reliable, 24/7 mark-to-market on everything is hard — but if achieved, means less % of assets in cash.
Thus less use for currencies as people can more easily store their wealth into assets and easily trade them.
— Pierre-Yves Gendron (@pierreyvesg7) February 24, 2021
AMMs boost BTC. Here's why.
- All assets trade against all assets in the defi matrix
- Automated market makers give liquidity for rare pairs
- Everything is marked-to-market 24/7
- Value of cash drops, as you can liquidate instantly
- The new no-op is to keep your assets in BTC
Basically, automated market makers like @Uniswap boost BTC in the long term, because they allow *everything* to be priced in BTC terms, and *anyone* to switch out of BTC into their asset of choice.
Though in practice this may mean WBTC/RenBTC [or ETH!] rather than BTC itself.
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Python makes it very easy to analyze and visualize time series data when you’re a beginner. It's easier when you don't have to install python on your PC (that's why it's a nano course, you'll learn python...
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# Using Google Colab
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Create a new Notebook at https://t.co/EZt0agsdlV and name it AnythingOfYourChoice.ipynb
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You can add code in these cells and add as many cells as you want
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Imports are pretty standard, with a few exceptions.
For the most part, you can import your libraries by running the import.
Type this in the first cell you see. You need not worry about what each of these does, we will understand it later.
==========================
Module 1
Python makes it very easy to analyze and visualize time series data when you’re a beginner. It's easier when you don't have to install python on your PC (that's why it's a nano course, you'll learn python...
... on the go). You will not be required to install python in your PC but you will be using an amazing python editor, Google Colab Visit https://t.co/EZt0agsdlV
This course is for anyone out there who is confused, frustrated, and just wants this python/finance thing to work!
In Module 1 of this Nano course, we will learn about :
# Using Google Colab
# Importing libraries
# Making a Random Time Series of Black Field Research Stock (fictional)
# Using Google Colab
Intro link is here on YT: https://t.co/MqMSDBaQri
Create a new Notebook at https://t.co/EZt0agsdlV and name it AnythingOfYourChoice.ipynb
You got your notebook ready and now the game is on!
You can add code in these cells and add as many cells as you want
# Importing Libraries
Imports are pretty standard, with a few exceptions.
For the most part, you can import your libraries by running the import.
Type this in the first cell you see. You need not worry about what each of these does, we will understand it later.
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