Scaling Bitcoin 2016, “Retarget,” was held this past weekend on October 8-9 for the engineering and academic community. The event, created in 2015, offers the development community a place where they can discuss how to safely scale and decentralize the Bitcoin protocol.
In order to aid the consensus process, Scaling Bitcoin has been held in Montreal, Hong Kong and now Milan, Italy. The conference enables workshops and keynote speeches concerning technical criteria, proposals, and evaluate the information with an academic discipline. Attendees consisted of academic researchers, engineers, and journalists.
Tradeoff’s Between Fungibility and a Scalable Protocol
Day one began with a fungibility overview given by Blockstream’s Matt Corallo and Adam Back.
The discussion of fungibility began by explaining the properties of a currency that acts like cash. This means when a ten dollar bill is exchanged by anyone, the bill is not tainted regardless of if it was used for either good or bad purposes. The ten dollar bill remains the same no matter who touches it, and many people within the Bitcoin community are concerned with Bitcoin’s fungibility.
The developers discussed topics such as the Silk Road usage, then began describing a few ideas to overcome fungibility challenges, as well as and some attacks. This included taint tracing, which is when a user broadcasts a transaction and “people connect to the nodes to identify an IP address by looking at trickle on the network,” the developer’s state.
Then, the discussion moved to the tradeoff between scalability and fungibility. Some believe there is a fine line in the sand between these two points.
After Back and Corallo wrapped up day one’s fungibility section, other topics included were JoinMarket presented by Adlai Chandrasekhar, TumbleBit with Ethan Heilman and Leen AlShenibr, and MimbleWimble by Andrew Poelstra.
Lighting Network, Onion Routing, and Flare
Following the morning fungibility discussion, Meltem Demirors and Eric Lombrozo presented “Build – Scale – Operate: The Three Pillars of the Bitcoin Community.”
After the two presenters had wrapped up, the next half of the day focused on the Lightning Network and routing challenges. A lot of discussions focused on the routing aspect of the Lightning Network (LN). There are significant hurdles with LN concerning routing the payment layer. This includes aspects of centralization, privacy concerns, fees, and external vulnerabilities.
After a lunch break, the next presentation began with Olaoluwa Osuntokun (roasbeef) discussing Onion routing in the Lightning Network. Osuntokun talked about privacy-preserving, decentralized micropayments distributed through a set of Onion routers. The goal is to make LN private and censorship resistant. Osuntokun described the many aspects this would entail, including using Sphinx, performance considerations, Hornet utilization, passive key rotation, and future directions.
Other discussions that day revolved around Flare, and sidechain scaling by Paul Sztorc. Following the topic of “Scalable and Accountable Timestamping” presented by Riccardo Casatta, the attendees concluded conversations with a set of workshops.
Day 2: Segregated Witness, Schnorr Signatures, and Peer-to-Peer Encryption
Day two began with the current hot topic in the Bitcoin space: Segregated Witness (Segwit).
Greg Sanders, a programmer for the Elements Project at Blockstream, discussed “Lessons Learned with Segwit in Bitcoin.” Recently, Segwit was introduced in the elements alpha testing, which “allows for safe chaining of pre-signed transactions, which is important for payment channels and lightning network,” says Sanders.
One key aspect Sanders touched in his presentation is Segwit is getting closer to implementation. Sanders states:
“So if segwit is already done, then why am I talking about? Well, it’s activated on testnet, and it’s close to deployment on mainnet. The activation parameters on mainnet have not been set. It’s one of the largest changes to bitcoin ever. It has touched nearly all areas of the Bitcoin code base, like p2p, wallet, consensus, every layer.”
Following Sanders’ discussion, developer Pieter Wuille talked about elliptic curve Schnorr-based signatures in Bitcoin. Schnorr signatures are another method of protecting anonymity.
Wuille explains the advantages Schnorr signatures could create within the Bitcoin network. “How to standardize that, and then go through applications that they could have and then show that the problem is harder than swapping one for the other,” he said.
The developer also noted that academic writeups are needed for the delinearization scheme.
Next up was Jonas Schnelli, discussing BIP151: peer-to-peer encryption. The recent BIP proposal, Schnelli explains, would encrypt peer traffic making analysis confusing. At the moment, the Bitcoin network does not encrypt peer communication. Moreover, Schnelli detailed that Simplified Payment Verification (SPV) wallets also reduced privacy. With BIP 151 encrypting peer traffic would curb monitoring, the Bitcoin developer explained.
Many other hard hitting technical discussions finished the day. Other topics included Bitcoin covenants by Emin Gun Sirer, and progress on scaling via client-side validation with Peter Todd. The second day was followed by another set of workshops and collaborations.
When Will True Scaling Begin?
Unfortunately, the Scaling Bitcoin Milan event speakers chose not to discuss onchain scaling methods. There was also very little discussion concerning larger blocks and ideas like Bitcoin Unlimited.
However, after day one of the event concluded, Roger Ver, Jerry Chan, and Jake Smith threw a “free speech” party at the Hotel Lombardia Milano. Party attendees discussed Bitcoin Unlimited, Xthin blocks, Bitcoin throughput, anti-spam measures, community coordination and several block size proposals. Those who attended the after party festivities had felt several ideas were intentionally left out of the main conference.
The Bitcoin network is a pretty big deal to a lot of people, and there’s an awful lot of technical decisions. Hopefully, some of the conversations during Scaling Bitcoin in Milan help the cryptocurrency push forward.
Scaling and operating this large billion dollar ecosystem is going to take a lot of work. This will continue to drive experts, developers, and a communal economy of users to push Bitcoin’s innovations to the rest of the world. So far this nascent technology has created a valuable and vast network.
What do you think about Scaling Bitcoin Milan? Let us know in the comments below.
Images via Shutterstock, and Pixabay.
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