Second Generation of Bitcoin

Transcription

1 1 Second Generation of Bitcoin White Paper The BitClassic Team

2 2 CONTENTS 1. Abstract 3 What is BitClassic? 3 2. Blockchain 4 3. Mathematical Representation 5 4. Proof-of-Work 5 5. Proof-of-Stake 6 6. Smart Contracts 7 7. Secure 8 8. Transparency 8 9. Staking Mining Disclaimer Conclusion Facts 10

3 3 BitClassic: A Peer-to-Peer Electronic Cash System Abstract A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution. Digital signatures provide part of the solution, but the main benefits are lost if a trusted third party is still required to prevent double-spending. We propose a solution to the double-spending problem using a peer to peer network. The network timestamps transactions by hashing them into an ongoing chain of hash-based POW/POS, forming a record that cannot be changed without redoing the POW/POS. The longest chain not only serves as proof of the sequence of events witnessed, but proof that it came from the largest pool of CPU power. As the blockchain industry expands and the number and value of crypto assets increase, the market for crypto-investing and speculation will also grow. Crypto markets are borderless, open 24/7, subject to minimal regulatory control, and offer huge potentials for growth. Because of these characteristics, crypto markets represent an incredible, new opportunity for investors over traditional markets. Currently, the crypto-investment market is primed to attract new investors into the blockchain industry. However, the learning curve for investing in crypto assets is extremely steep and the marketplace lacks sophisticated tools and information products that will encourage new users to make the jump into the crypto community. What is BitClassic? BitClassic (B2C) is a digital currency that can be sent between people over the internet. BitClassic (B2C) stays true to the original vision of cryptocurrency: a financial system owned by its users, the people s coin. BitClassic (B2C) is not controlled by large banks or mining hardware manufacturers and can be mined by anyone profitably.

4 4 BitClassic (B2C) is an open source, blockchain based, decentralized cryptocurrency that enables instant payments to anyone with minimum transaction fees. BitClassic also allows you to earn interest for helping maintain security on the network by holding B2C in a Qt Desktop wallet that is attached to the network and allowing transactions to flow through it. A finite resource similar to gold, you can rest assured that BitClassic (B2C) will keep your money safe from vested interests and ensure that transaction fees are proportionate and shared between a large number of miners. With BitClassic (B2C), you can truly be your own bank. BitClassic (B2C) is an open source, peer-to-peer, community driven decentralized cryptocurrency that allow people to store and invest their wealth in a non-government controlled currency, and even earn a substantial interest on investment. We have seen counterparty reduction emerge in e-commerce, where goods are now often purchased straight from manufacturers. In financial services, the trend up until now has seen financial technology companies building their businesses by piggybacking off existing infrastructure to create better solutions for individual products. For example, remittance companies have emerged simply because they could process bank wires faster in various countries. However, such technologies have created numerous counterparties. By being a core participant in financial markets, BitClassic (B2C) can provide many services without the need for such counterparties. Blockchain The BitClassic Blockchain focuses on addressing critical issues related to community adoption and sustainability. This means that people who find themselves using the currency mined on this blockchain must be able to maintain their sovereignty by protecting their balances in such a way that adversaries cannot analyze and make targets of the users. Therefore, the currency must employ anonymizing features to protect the people who use it. Secondly, users should be able to exercise activities over the blockchain, in this case exposing a marketplace where people can buy and sell the things that they want and need from other people without leaving the confines of the BitClassic peer to peer network. In addition, the sustainability aspect depends on the blockchain not being constrained and prone to spam attacks due to full blocks as is the case with Bitcoin.

5 5 Mathematical Representation A blockchain protocol is fundamentally a monadic implementation of concurrent mutations of a global state. This is achieved by defining blocks as operators acting on this global state. The free monoid of blocks acting on the genesis state forms a tree structure. A global, canonical, state is defined as the minimal leaf for a specified ordering. This suggests the following abstract representation: - Let (S, ) be a totally ordered, countable, set of possible states. - Let / S represent a special, invalid, state. - Let B S S { } be the set of blocks. The set of valid blocks is B S S. The total order on S is extended so that s S, < s. This order determines which leaf in the block tree is considered to be the canonical one. Blocks in B are seen as operators acting on the state. All in all, any blockchain protocol (be it Bitcoin, Litecoin, Peercoin, Ethereum, Cryptonote, etc) can be fully determined by the tuple: ( S,,, B S S { }) The networking protocol is fundamentally identical for these blockchains. Mining algorithms are but an emergent property of the network, given the incentives for block creation. In BitClassic, we make a blockchain protocol introspective by letting blocks act on the protocol itself. We can then express the set of protocols recursively as P = {(S,,, B S (S P) { })} Proof of-work To implement a distributed timestamp server on a peer-to-peer basis, we will need to use a proof- of-work system similar to Adam Back's Hashcash [6], rather than newspaper or Usenet posts. The proof-of-work involves scanning for a value that when hashed, such as with SHA-256, the hash begins with a number of zero bits. The average work required is exponential in the number of zero bits required and can be verified by executing a single hash. For our timestamp network, we implement the proof-of-work by

6 6 incrementing a nonce in the block until a value is found that gives the block's hash the required zero bits. Once the CPU effort has been expended to make it satisfy the proof-of-work, the block cannot be changed without redoing the work. As later blocks are chained after it, the work to change the block would include redoing all the blocks after it. Block Block Prev Hash Nonce Prev Hash Nonce Tx Tx... Tx Tx... The proof-of-work also solves the problem of determining representation in majority decision making. If the majority were based on one-ip-address-one-vote, it could be subverted by anyone able to allocate many IPs. Proof-of-work is essentially one-cpu-one-vote. The majority decision is represented by the longest chain, which has the greatest proof-of-work effort invested in it. If a majority of CPU power is controlled by honest nodes, the honest chain will grow the fastest and outpace any competing chains. To modify a past block, an attacker would have to redo the proof-of-work of the block and all blocks after it and then catch up with and surpass the work of the honest nodes. We will show later that the probability of a slower attacker catching up diminishes exponentially as subsequent blocks are added. To compensate for increasing hardware speed and varying interest in running nodes over time, the proof-of-work difficulty is determined by a moving average targeting an average number of blocks per hour. If they're generated too fast, the difficulty increases. Proof-of-Stake BitClassic can implement any type of blockchain algorithm: proof-of-work, proof-of-stake, or even centralized. Due to the shortcomings of the proof-of-work mechanism, the BitClassic seed protocol implements a proof-of-stake system. There are considerable theoretical hurdles to designing a working proof-of-stake systems, we will explain our way of dealing with them. Is Proof-of-Stake Impossible? There are very serious theoretical hurdles to any proof-of-stake system. The main argument against the very possibility of a proof-of-stake system is the A full, technical, description of our proof-of-stake system is given in the BitClassic white paper. A new user downloads a client and connects for the first time to the network. He receives a tree of blocks with two larges branches starting

7 7 from the genesis hash. Both branches display a thriving economic activity, but they represent two fundamentally different histories. One has clearly been crafted by an attacker, but which one is the real chain? In the case of Bitcoin, the canonical blockchain is the one representing the largest amount of work. This does not mean that rewriting history is impossible, but it is costly to do so, especially as one s hashing power could be used towards mining blocks on the real blockchain. In a proof-of-stake system where blocks are signed by stakeholders, a former stakeholder (who has since cashed out) could use his old signatures to costlessly fork the blockchain this is known as the nothing-at-stake problem. Smart Contracts Though Bitcoin does allow for smart contracts, most of its opcodes have been historically disabled and the possibilities are limited. Ethereum introduced a smart contract system with some critical differences: their scripting language is Turing complete and they substitute stateful accounts to Bitcoin s unspent outputs. While emphasis has been put on the Turing complete aspect of the language, the second property is by far the most interesting and powerful of the two. In Bitcoin, an output can be thought of as having only two states: spent and unspent. In Ethereum, accounts (protected by a key) hold a balance, a contract code and a data store. The state of an account s storage can be mutated by making a transaction towards this account. The transaction specifies an amount and the parameters passed to the contract code. A downside of a Turing complete scripting language for the contracts is that the number of steps needed to execute a script is potentially unbounded, a property which is generally uncomputable. To address this problem, Ethereum has devised a system by which the miner validating the transaction requires a fee proportional to the complexity and number of steps needed to execute the contract. Yet, for the blockchain to be secure, all the active nodes need to validate the transaction. A malicious miner could include in his block a transaction that he crafted specially to run into an infinite loop and pay himself an exorbitant fee for validating this transaction. Other miners could waste a very long time validating this transaction. Worse, they could just slack and fail to validate it. In practice though, most of the interesting smart contracts can be implemented with very simple business logic and do not need to perform complex calculations. Our solution is to cap the maximum number of steps that a program is allowed to run for in a single transaction. Since blocks have a size limit that caps the number of transactions per block, there is also a cap on the number of computation steps per block. This rate limitation foils CPU usage denial of service attacks. Meanwhile, legitimate users can issue multiple transactions to compute more steps than

8 8 allowed in a single transaction, though at a limited rate. Miners may decide to exclude too long of an execution if they feel the included fee is too small. Since the BitClassic protocol is amendable, the cap can be increased in future revisions and new cryptographic primitives included in the scripting language as the need develops. Secure People use different encryption techniques to authenticate the transfer of money, which is self-governing (that is, it is not dependent on central bank) and synchronize the generation of the units of the currency in decentralized currencies. Cryptocurrencies are decentralized; and as a digital currency, it offers a definite and secure environment. Moreover, it has made possible to gather individual wealth without any hassle, which was unachievable and anonymous. Transparency In cryptocurrencies, all of the transactions are obvious. The flow of currency transactions is very simple. So if there is any invalid or fake details related to the person using the system provided, the high level transparency of this decentralized currency can easily identify the real fact. Staking You can deposit you Bitcoins, Litecoin, Dashcoin & other AltCoin at the B2C exchange and then BitClassic coin. You can then deposit you BitClassic coin in your Windows, Mac and Linux wallet. The profit depends on the amount of coins deposited by you. The higher the coins the more will be the earned profit. As BitClassic Coin s blockchain technology will give you bonus you when you hold your coin and your coin will be used to stake. It is a way to confirm transaction for the system, the more you keep BitClassic Coin, the more bonus you earn from Staking. This means that if you just hold your coin in your wallet over time, and your coins are not used for Staking, you could miss substantial benefit. So, if you have BitClassic Coin that you are not involved in trading then you should be involved in staking. With BitClassic Coin, you are always guaranteed to earn profit in one way or another. Mining You can also earn profits by mining BitClassic Coin. You need to invest in hardware resources, (CPU and GPU or ASCI) and using POW for mining

9 9 BitClasiic Coin. You just need to download miner for mining B2C and start BitClassic coin mining. For each block being mined you will be getting 25 B2C. There are two ways of mining, solo mining. You can choose between solo mining. You can visit our website for more information. Disclaimer This whitepaper does not provide any type of legally binding contract. BitClassic coin Team does not accept any legal liability arising from the material contained in this whitepaper. Anyone looking to invest in cryptocurrency should seek professional advice regarding tax regulations and legislations in their local area. The material provided here represents our current plans for the cryptocurrency platform. The details may change (including ICO distribution plans) and should not be considered finalized. BitClassic coin co-founders and employees do not offer investment advice under any circumstances. No entity is legally bound or contractually obligated by the transferring of BitClassic coin or fiat currency. Contributions from investors should be seen as that, a contribution towards the project. BitClassic Team and all persons associated with the company are in no way arranging, dealing or advisingon regulated financial investments. Conclusion We have outlined a path that will solve the most important issues that face crypto-currencies today. Those of fair currency distribution considered a global infrastructure that is being cultivated for the long term BitClassic is more than just a coin. It s a technology poised to disrupt the entire payment industry covering peer to peer payments and mass payments. It is like of a revolution in the peer to peer crypto-currency payment world. Traditional payment system requires efforts to manage & maintain the systems. While in the case of BitClassic coin, less maintenance with nearly less transaction fees puts up maximum benefits to the users of BitClassic coin.

10 10 BitClassic coin offers not only a decentralized payment mechanism based on the blockchain, but also a sustainable economy that produces, manages & securely send/receive large number of transactions each & every second. Last but not the least, the BitClassic Coin is just going to be the first leading peer to peer cryptocurrency to manage the high value instant payments. Facts Coin Name - BitClassic Abbreviation B2C Algorithm Scrypt Types Proof-of Work / Proof-of Stake Total Coin Supply 21 Million Block Reward 25 Coins Proof-of-Stake Percentage 7% Per Year Coinbase Maturity - 50 Blocks Target Timespan 1 Block Transaction Confirmations 6 Blocks Target Spacing 64 Seconds Last POW Block