Ultimate magazine theme for WordPress.

Assessing Bitcoin’s Fundamentals (Cryptocurrency:BTC-USD) | Seeking Alpha

Andriy Onufriyenko/Moment via Getty Images

When investing in bitcoin (BTC-USD) as an asset, or companies that build on top of the Bitcoin network as part of an asset mix, we need some set of metrics with which to evaluate the

Broken Money

Look Into Bitcoin

Look Into Bitcoin

Lyn Alden, Look Into Bitcoin

Bitcoin vs M2

Lyn Alden, Look Into Bitcoin

Do I contradict myself?

Very well then I contradict myself,

I am large, I contain multitudes.

-Walt Whitman

In 2010 when it was still brand new and barely had a market price, the Bitcoin node client had an inflation bug, which Satoshi fixed with a soft fork.

In 2013, a Bitcoin node client update was accidentally not backward-compatible with the prior (and widely used) node client due to an oversight, resulting in an unintended chain split. Within hours, developers analyzed the problem and told node operators to fall back to the prior node client, which resolved the chain split. Since that time over a decade ago, the Bitcoin network has enjoyed 100% perfect uptime. Even Fedwire has encountered outages and failed to achieve 100% uptime during that period (and doesn’t even attempt to run 24/7/365 to begin with like Bitcoin does).

In 2018, another inflation bug was accidentally added to the Bitcoin node client. However, this one was identified and discreetly fixed by developers before it was exploited, and so it never caused an issue in practice.

In 2023, people began making use of the SegWit and Taproot soft fork upgrades in ways that were not intended by the developers of those upgrades, including inserting large images into the signature portion of the Bitcoin blockchain. While this is not a bug per se, it shows the risks of how certain aspects of the code can be used in ways that were not intended, and therefore shows the ongoing need for conservatism when performing upgrades in the future.

Bitcoin suffers from the “year 2038 problem” that many computer systems have. During the year 2038, the 32-bit integer used for Unix timestamping will run out of seconds for many computer systems, resulting in an error. However, because Bitcoin uses an unsigned integer for this, it won’t run out until the year 2106. This can be fixed by updating the time to a 64-bit integer or by taking the block height into account when interpreting the wrapped-around 32-bit integer, but as far as I understand it this may require a hard fork, which means an upgrade that is backward-incompatible. This shouldn’t be hard in practice because it’s obviously necessary and can be done well in advance of the problem (years or decades even), but it may open a window of vulnerability. One potential way to do it would be to release an update that is backward-compatible at first, but that activates when the integer runs out and thus solves the problem.

-Broken Money, Chapter 26




Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers

Comments are closed.

%d bloggers like this: