What was Bitcoin, what will it be? The techno-economic imaginaries of a new money technology
Bitcoin's Academic Pedigree
Richard Gendal Brown, Chief Technology Officer at R3 CEV, discusses different types of blockchain innovation.
Mastering Bitcoin is a book for developers, but the first two chapters cover bitcoin at a level that is approachable to non-programmers. Anyone with a basic understanding of technology can read the first two chapters and get a great understanding of bitcoin.
This notice describes how existing general tax principles apply to transactions using virtual currency. The notice provides this guidance in the form of answers to frequently asked questions.
While income can be realized from a chain-split, it need not be realized at the time of the chain-split, or, possibly, ever, for federal income tax purposes.
Ethereum Design Rationale – Accounts and not UTXOs
This section provides a description of some of the blockchain-level protocol changes made in Ethereum, including how blocks and transactions work, how data is serialized and stored, and the mechanisms behind accounts.
Bitcoin, along with many of its derivatives, stores data about users' balances in a structure based on unspent transaction outputs (UTXOs): the entire state of the system consists of a set of "unspent outputs" (think, "coins"), such that each coin has an owner and a value, and a transaction spends one or more coins and creates one or more new coins, subject to the validity constraints:
A user's "balance" in the system is thus the total value of the set of coins for which the user has a private key capable of producing a valid signature.
(Image from https://bitcoin.org/en/developer-guide)
Ethereum jettisons this scheme in favor of a simpler approach: the state stores a list of accounts where each account has a balance, as well as Ethereum-specific data (code and internal storage), and a transaction is valid if the sending account has enough balance to pay for it, in which case the sending account is debited and the receiving account is credited with the value. If the receiving account has code, the code runs, and internal storage may also be changed, or the code may even create additional messages to other accounts which lead to further debits and credits.
The benefits of UTXOs are:
The benefits of accounts are:
We have decided that, particularly because we are dealing with dapps containing arbitrary state and code, the benefits of accounts massively outweigh the alternatives. Additionally, in the spirit of the We Have No Features principle, we note that if people really do care about privacy then mixers and coinjoin can be built via signed-data-packet protocols inside of contracts.
One weakness of the account paradigm is that in order to prevent replay attacks, every transaction must have a "nonce", such that the account keeps track of the nonces used and only accepts a transaction if its nonce is 1 after the last nonce used. This means that even no-longer-used accounts can never be pruned from the account state. A simple solution to this problem is to require transactions to contain a block number, making them un-replayable after some period of time, and reset nonces once every period. Miners or other users will need to "ping" unused accounts in order to delete them from the state, as it would be too expensive to do a full sweep as part of the blockchain protocol itself. We did not go with this mechanism only to speed up development for 1.0; 1.1 and beyond will likely use such a system.
Would you purchase a house if you had no information on mortgages encumbering it? Of course not; yet, that is analogous to what buyers of bitcoin are doing every day – purchasing without information about liens on their bitcoins. This article identifies (1) the fatal flaw in the current Bitcoin ecosystem created by Uniform Commercial Code (“UCC”) Article 9 (Secured Transactions) and (2) the solution presented by UCC Article 8 (Investment Securities).
Focus on Section III. “PROPERTY AND IDENTITY”
Attorney Brian Klein explains how relatively recent changes to a federal law make it a felony to run an unlicensed bitcoin business whether you knew you needed a license or not.
Anthony Murgio, 33, of Tampa, pleaded guilty on Jan. 9 to three conspiracy counts, including bank fraud and operating an unlicensed money transmitting business. The sentence was roughly half as long as prosecutors had sought.
The Financial Crimes Enforcement Network is issuing this interpretive guidance to clarify the applicability of the regulations implementing the Bank Secrecy Act to persons creating, obtaining, distributing, exchanging, accepting, or transmitting virtual currencies.
Former CEO Of Bitcoin Exchange Company Sentenced