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4 changes: 4 additions & 0 deletions _includes/link-to-issues.md
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{% assign _issues = include.issues | split: "," %}
{% for _issue in _issues %}
[#{{_issue}}]: https://github.com/bitcoin/bitcoin/issues/{{_issue}}
{% endfor %}
9 changes: 9 additions & 0 deletions _includes/references.md
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{% comment %}
<!--REQUIRES PERIODIC UPDATE: update rpc_version below to latest
version of BitcoinCore.org's RPC docs-->
{% endcomment %}
{% assign rpc_version = "0.16.1" %}
[rpc fundrawtransaction]: https://bitcoincore.org/en/doc/{{rpc_version}}/rpc/rawtransactions/fundrawtransaction/
[rpc abandontransaction]: https://bitcoincore.org/en/doc/{{rpc_version}}/rpc/rawtransactions/fundrawtransaction/


174 changes: 174 additions & 0 deletions _posts/en/newsletters/2018-07-24-newsletter.md
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---
title: 'Bitcoin Optech Newsletter #5'
permalink: /en/newsletters/2018/07/24/
name: 2018-07-24-newsletter
type: newsletter
layout: newsletter
lang: en
version: 1
---
This week's newsletter includes information about a new language to describe
output scripts, an update on Bitcoin Core's support for partially-signed
Bitcoin transactions, and news on several other notable Bitcoin Core merges.

## Action items

- Bitcoin Core [0.16.2RC2][] released for testing in preparation for a
maintenance release that will provide bugfixes and backports.
Community testing is highly appreciated. Note, there was no RC1 due
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I've cut some of the detail from the last sentence here.

to a metadata problem being detected during the release process.

## Dashboard items

- Transaction fees are lower than they were this time last week. Anyone
who can wait 12 or more blocks for confirmation can reasonably pay the
default minimum feerate. It's a good time to [consolidate UTXOs][].

- The number of [native segwit outputs][p2shinfo bech32] had been
increasing steadily over time, but dropped by about 400,000 (80%) this
week, possibly due to UTXO consolidation by an exchange. The average
number of new native segwit outputs created per hour remains
relatively constant, indicating no obvious decrease in adoption.

## News

- **Bitcoin Optech publicly announced:** we received great coverage in
[Bitcoin Magazine][announce bmag], [Coindesk][announce cdesk], and several
other publications. This wouldn't have been possible without the
support of our founding sponsors and member companies. Thank you!

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Added an item on our first workshop.

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I love it, thanks! I'm made two small changes: (1) made "Replace-by-fee and Child-pays-for-parent, and Coin Selection" into a list and dropped the title caps, (2) made both lists in this content use the serial comma (a, b, and c) to match the style of the other lists in the newsletter (serial comma is my preferred list punctuation, but if you want to use the non-serial comma in our docs, we can make a style guide).

- **First Optech workshop held in San Francisco:** as
[previously announced][workshop announce], we held our first workshop
in San Francisco last week. There were 14 engineers from Bay Area companies and
open source projects in attendence, and we had great discussions about
coin selection, replace-by-fee, and child-pays-for-parent. Thanks
to Square for hosting and Coinbase for helping with organization.

If you work at a member company and have any requests or suggestions for
future Optech events (be that location, venue, dates, format, topics,
or anything else), please contact us. We're here to help our member
companies!

- **Coin selection RPC unlikely:** In Bitcoin Core's weekly
meeting, Andrew Chow raised the possibility of
creating an RPC that would allow users to pass in information about a
transaction they wanted to create, including a list of available
inputs, and receive back a list of which inputs would be selected by
the Bitcoin Core wallet's coin selection algorithm.

Meeting participants were mostly opposed to providing this feature,
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added "...as an RPC"

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I reverted this. My read on the discussion is that most discussion participants were against it being in Bitcoin Core whatsoever, and that they additionally thought that (if it was done), it should be done as a library---probably a third-party library. Just to check, I rescanned that discussion; here were the participants:

achow, wumpus, gmaxwell, jonasschnelli, sipa, jnewbery

Here are one comment per person against making it part of Bitcoin Core. Note, I think the comment from sipa might be more a response to wumpus than an opinion of his own.

19:20:06 <gmaxwell> But the argument I was making above is also an argument against a library: pressure to maintain a stable interface to this would be harmful to the project.
19:22:00 <wumpus> it's fine, they can make a library out of it themselves
19:29:53 <jonasschnelli> Agree with wumpus: I guess its a one-day job to extract the coin selection code and create a library out of it...
19:31:58 <sipa> wumpus: perhaps once the code is sufficiently encapsulated, someone else can librarify that and maintain it

So that's either 3/6 or 4/6 participants suggesting whatever it is should be outside of Bitcoin Core, and with 2/6 being strongly opposed to including it in Bitcoin Core. I think that's sufficient opposition that (in the absence of other evidence) we shouldn't hold out hope that this could be part of a Bitcoin Core-provided library.

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Yes, that's fair.

suggesting that it would be better if it was a library and that
Bitcoin Core's recent and continuing work towards encapsulating its
coin selection code would simplify development of a third-party
library later. A particular opposition to the idea was that it
might reduce the pace of development for direct users of the Bitcoin
Core wallet; as Gregory Maxwell said, "Pressure to maintain a stable
interface to [coin selection] would be harmful to the project. [...]
I don’t want to hear 'we can't implement privacy feature X because
it'll break [the coin selection] interface'."

- **First use of output script descriptors:** Pieter Wuille has opened
PR [#13697][] to Bitcoin Core that implements his [output script
descriptors][] language for describing which output scripts
(scriptPubKeys) a wallet should monitor for. This particular PR only
applies to the recently-added [`scantxoutset`][#12196] RPC but Wuille's
ultimate goal is to use this new language elsewhere in the API and "to
remove the need for importing scripts and keys entirely, and instead
make the wallet just be a list of these descriptors plus associated
metadata."

- **BIP174 Partially-Signed Bitcoin Transaction (PSBT) support merged:** this
provides a standardized format that multiple wallets can use to
communicate information about transactions that need to be signed,
so that hot wallets can get signatures from cold wallets or hardware
wallets, multisig transactions can be signed by multiple wallets, and
multiple wallets can collaboratively create multiparty transactions such
as CoinJoins. Several RPCs are added with this merge:
`walletprocesspsbt`, `walletcreatefundedpsbt`, `decodepsbt`,
`combinepsbt`, `finalizepsbt`, `createpsbt`, and `convertpsbt`. For a
full description, see PR [#13557][].

## Notable Bitcoin Core merges

*Not including those previously discussed in the News section.*

{% comment %}
git log --merges b25a4c2284babdf1e8cf0ec3b1402200dd25f33f..07ce278455757fb46dab95fb9b97a3f6b1b84faf
{% endcomment %}

- [#9662][]: New wallets can now be created with private keys disabled.
This is primarily meant for users who want to exclusively use their
wallet in conjunction with another program or hardware wallet that
stores private keys. This could also be useful to companies that want
to use Bitcoin Core features (like coin selection) by creating a
wallet, importing their addresses (but not private keys), and then
performing whatever actions they desire, such as using the
[`fundrawtransaction`][rpc fundrawtransaction] RPC.

- [#12196][]: New `scantxoutset` RPC method that allows searching the
set of spendable bitcoins (UTXOs) for those matching an address,
public key, private key, or HD keypath. The main expected use for
this is "funds sweeping" where transactions matching an old wallet are
found and transferred to a new wallet. Although this RPC will almost
certainly be included in Bitcoin Core 0.17, it will likely be marked
as experimental so that its API can be freely changed in subsequent
releases. This API is likely to be
updated to support output script descriptors, which is planned to
happen before 0.17.

- [#13604][]: Bitcoin-Qt is now built by default in addition to bitcoind
on 32-bit ARM systems, and should be distributed by default with the
other binaries for that system from BitcoinCore.org for future
releases. Bitcoin-Qt with 64-bit ARM is not yet supported by default.

- [#13298][]: The node now sends all announcements ([invs][inv]) for
new transactions to all of its incoming peers at the same time, after
a random delay. Previously, Satoshi Nakamoto [added a feature][rand
delay] to Bitcoin (the software) that waited for a different random
delay for each peer before sending an announcement so that a
transaction would propagate around the network somewhat unpredictably,
preventing spy nodes from being able to assume that the first peer
they received a transaction from was likely the peer that created it.

However, later investigators realized that someone operating
multiple spy nodes could make multiple connections to each node to
increase their chances of being the first to receive a given
transaction, allowing the spy to again guess which node create the
transaction. This merge improves the situation by preventing a spy
making multiple connections from receiving any more information than
a spy with one connection. Outgoing connections (which are selected
by the node itself using certain rules) continue to use the old
behavior so that transactions continue to propagate unpredictably.

This change might increase transaction propagation delay slightly,
although developers commenting on the PR think the effect will be
minimal. It may also cause bandwidth usage to be less evenly
distributed over time. However, it could (in theory) end up
reducing the number of incoming connections to upgraded nodes, if spy
nodes no longer find making multiple connections to be useful,
reducing overall wasted bandwidth.

- [#13652][]: The [`abandontransaction`][rpc abandontransaction] RPC has
been fixed to abandon all descendant transactions, not just children.

## Coming attractions

Next week's newsletter will feature a field report from Anthony Towns, a
developer at Xapo, about how they consolidated around 4 million UTXOs to
prepare for potential future fee increases.

We love getting contributions to the newsletter from member companies. If you'd like
to share your experiences in implementing better Bitcoin technology, please contact us!

[rand delay]: https://github.com/bitcoin/bitcoin/commit/22f721dbf23cf5ce9e3ded9bcfb65a3894cc0f8c#diff-118fcbaaba162ba17933c7893247df3aR718
[p2shinfo bech32]: https://p2sh.info/dashboard/db/bech32-statistics?orgId=1
[consolidate utxos]: https://en.bitcoin.it/wiki/Techniques_to_reduce_transaction_fees#Consolidation
[0.16.2rc2]: https://bitcoincore.org/bin/bitcoin-core-0.16.2/test.rc2/
[announce bmag]: https://bitcoinmagazine.com/articles/chaincode-devs-google-alumni-create-industry-group-help-bitcoin-scale/
[announce cdesk]: https://www.coindesk.com/bitcoins-biggest-startups-are-backing-a-new-effort-to-keep-fees-low/
[output script descriptors]: https://gist.github.com/sipa/e3d23d498c430bb601c5bca83523fa82
[inv]: https://bitcoin.org/en/developer-reference#inv
[workshop announce]: /en/newsletters/2018/06/26/#first-optech-workshop

{% include references.md %}
{% include link-to-issues.md issues="13697,13557,12196,9662,12196,13604,13298,13652" %}