New blogpost; Smaller is stronger. About Bitcoin mining and wallets.

[TomZ]

New blogpost about Bitcoin Classics progress towards a better Bitcoin.

http://zander.github.io/posts/Smaller%20is%20Stronger/

[LiteCoinGuy]

thx for sharing. it would be nice if you can post a little preview of that here

[TomZ]

Unfortunately, the forums don't seem to support markdown. So it would look odd.

### Don't leave your money on the street.

Bitcoind is labelled as the backend of the network. When I explain this to
friends I explain it like its the router that you have stuffed behind the
sofa or if you are more professional, in a server room, sometimes not even
in the same country you are in.
Either way, it is something needed for everything else to work. But mostly
ignored.

This is how I imagine the users of Bitcoin Classic to use the software, and
it is the way I think it should be. They use it as something that just
works to make it possible for them to keep their business or infrastructure
running.

One such group of Bitcoin Classic users are the miners, they run
bitcoin-classic to have an accurate view of the state of the network. The
new transactions are collected in Bitcoin Classic and it creates new block
templates for them. In short; Bitcoin Classic helps miners connect to the
network.

What is totally out-of-character with the design that Bitcoin has had for
years is that, when the miner actually mines the block that the
block-reward is "stored" in the Bitcoin node.

This means that your Bitcoin Classic suddenly isn't just a piece of network
infrastructure anymore. It holds thousands of dollars worth of value. And
because of that you'd have to protect it. Which is not always compatible
with the way that you want to use a piece of network infrastructure.

See, the original Bitcoin node that Satoshi made was a reference client and
it included the ability to relay messages, it has a wallet and it knows how
to mine blocks.

Over the years we stopped using the mining software because other software
and hardware solutions have appeared that were much better.

We have also seen many better wallets which are much more used than a full
node based wallet.

All of those still use the bitcoin full node software, like Bitcoin
Classic, as a platform to build on. They communicate via various channels
with the Bitcoin software which in turn connects them to the Bitcoin
Network.

It is in my opinion time to separate Bitcoin Mining from the Bitcoin
Wallet. We should no longer force Miners to use the Bitcoin wallet that is
shipped in Bitcoin Classic. We should no longer force the horrible security
practice of storing bitcoin private keys (and the money they represent) on
a piece of equipment that really is meant to be like a router or a hub
connecting your business to the Bitcoin network.

### Stop demanding a wallet in a mining node

In Bitcoin Classic's development branch we have changed the
system to allow mining on a node that does not have a wallet compiled in.

I introduced a new RPC command called ``createaddress``, which returns
something like this;

<pre>
{
"address": "1E852VpivAYpZcwGo5bNB9U4twjnJfrL2c",
"pubkey":
"0303a60a215af3ea3240705db3201b5161445e1bdbd1e4e942284cfd9e9ede0ea1",
"private": "KyjwYTJrhAS14fV7fP16Z9bhiudpPcSTT5HpPgpoampS57zgT59w"
}
</pre>

The private key is the one piece of information needed to later spent the
money that would be stored on the address. To benefit from this change the
miner would store this private key in a secure location.

The pubkey and the address are not needed to be stored securely, they
can be used in future mined blocks. When a block is mined with the pubkey
set, the money can later be redeemed using the safely stored private key.

A second new RPC command is ``setcoinbase``. When called with the 'pubkey'
field from above this will cause any following calls to
``getblocktemplate`` to be generated so when it is mined all the fees and
block reward will go to the address.

People can use the output of ``createaddress``, **or if they don't like
change, just use the existing ``getnewaddress`` and ``validateaddress`` rpc
calls to create a coinbase that will end up in your bitcoind wallet**.

Additionally the command-line option ``--gencoinbase`` is added to bitcoind
which has the same effect as the setcoinbase RPC command and that may be
useful to use until the mining software is upgraded to use these new RPC
commands. Because calling getblocktemplate without setting the coinbase
will now cause an error to be returned.


This change is still only available on the development branch, and has not
been scheduled for release just yet. So **there is still time to give
feedback on what you like or dislike or would like to change**.

In my opinion these changes will have the positive effect that miners can
now feel much more safe when their bitcoind connects them to the bitcoin
network, without needing all the security that a full wallet should have.