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The new version of the Bitcoin Core software

Bitcoin

en.cryptonomist.ch 08 November 2022 11:41, UTC
  
Reading time: ~4 m

Bitcoin Core is the software with which Bitcoin nodes can be managed. It is not the only one, but it is by far the most widely used, as it is reportedly installed on 14,729 of the 15,295 public nodes currently surveyed.

A new version, 24.0, is expected to be released soon, but there is controversy about it.

Summary

The new version of Bitcoin Core software

Version 22.0 is currently available, and the next one is already in the release candidate stage. So it may be released soon.

There will be some important new features in the new version, such as how nodes download blocks when they synchronize with the network.

However, the controversy concerns the introduction of an additional option that will allow users to apply full replace-by-fee (RBF) logic.

Until now, Bitcoin Core nodes applied the “first seen” rule, meaning conflicting transactions were simply not accepted into the mempool. In the new version, users will be able to choose to have their nodes accept and forward any conflicting transactions if they include a higher fee than the other transactions they conflict with.

RBF, what is it?

RBF (Replace by Fee) allows users to replace an unconfirmed transaction with an alternative transaction with a higher fee until it is placed in a block.

The scheme, however, works only with zero-confirmation (0-conf) transactions, that is, transactions that can be accepted even before a miner confirms them by placing them in a block.

The problem is that in the new version of Bitcoin Core, full RBF logic will be built in that allows for the replacement of transactions that have not yet been confirmed. According to some, this will harm the network and even facilitate double-spending attacks.

It should be mentioned that such arguments have been there since version 12, but have intensified recently due to the expansion of Lightning Network (LN).

Lightning Network

The most skeptical is the founder of LN Muun, Dario Sneidermanis.

Sneidermanis says that Muun’s theme examined the Bitcoin Core 20 release candidate and found some troubling things specifically about the full-opt-in RBF implementation. According to Sneidermanis, zero-conf apps like Muun are forced to disable zero-conf functionality, meaning that it even goes so far as to disable outgoing LN payments.

The issue is debated, but the point of the question is whether or not adding full-opt-in RBF functionality to Bitcoin Core creates problems for LN transactions.

For example, according to Bitcoin Core developer David Harding, this update would not change the substitutability of transactions significantly.

The controversy over Bitcoin Core’s new software version

Hence, the whole issue is still wide open.

On one side there are LN supporters who claim that the new version of Bitcoin Core software will harm Lightning Network, while on the other side there are Bitcoin Core supporters who claim that the new version will not harm LN.

For now, since Bitcoin Core version 24 is not yet in use, there is no clear data to prove beyond doubt which side is right, and so the controversy will likely go on.

It is worth noting that no one can prevent Bitcoin Core developers from releasing a new version with full-opt-in RBF functionality, so it is very likely that the new version 24 will be released as it is now in its release candidate.

Only once its use is widespread will it be possible to tell whether it has brought disadvantages to LN or not.

Meanwhile, controversy is on the rise, not least because among those who are taking part there are also some maximalists who are very unwilling to compromise, and generally not at all kind to those who think differently from them.

The problems of the miners

Meanwhile, it turns out that some miners have big problems continuing to mine with such low profitability.

In fact, there are quite a few miners who, with current prices, prefer to hold on to their collected BTC while waiting to sell them at higher prices.

Some, on the other hand, are forced to sell them right away with minimal gains.

For example, Core Scientific, which has huge financial problems because of a $2 million uncollectible claim against the bankrupt Celsius, was forced to sell nearly 2,300 BTC at an average price of less than $19,700.

Core Scientific is publicly traded, and thus is required to report important shareholder information to the SEC.

A few days ago it reported that in October it sold 2,285 Bitcoin at an average price of $19,639 per BTC, with total proceeds of about $44.8 million. It also admitted that as of 31 October it held only 62 BTC, in addition to about $32 million in cash.

In other words, it was forced to sell off almost all of the BTC it had accumulated over time and was still holding in cash, probably in anticipation of selling them at a higher price.

It is worth noting that during 2022 its share price went from $11 to $0.16, a loss of 99%. The company had listed in April 2021 with an initial price of about $10.

So far there are no reports of other similar collapses in the Bitcoin mining industry, but certainly, with current prices, there will be other miners in big trouble.


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