Bitcoin Engineering Course at Stanford University Introduces Hands-on Approach with the 21 Bitcoin Computer

Bitcoin Magazine
Bitcoin Engineering Course at Stanford University Introduces Hands-on Approach with the 21 Bitcoin Computer

Dr. Balaji Srinivasan and Dr. Dan Boneh started their new course, “Bitcoin Engineering” at Stanford University on Monday, January 4th.

The class is a companion to Stanford’s previous Bitcoin-related course, “Crypto Currencies, the Blockchain, and Smart Contracts.” About 85 percent of this quarter’s class will feature new material.

The class gives you a sense of what Bitcoin can do. It’s not Bitcoin as a financial instrument, not about buy low/sell high. It’s about Bitcoin as a protocol.” —Balaji Srinivasan

The two courses differ in that the previous class focused on Bitcoin as a technology (or Bitcoin theory), while this quarter’s class will teach students how to write Bitcoin-powered versions of popular Internet services.

Bitcoin Engineering – @balajis @21dotco @Stanford

— Avery Haskell (@AveryHaskell) January 5, 2016

“You will learn by doing,” said Srinivasan on the first day of class.

The course is structured around a weekly hackathon. At the beginning of each week students will receive stub code demonstrating the basic mechanics of a Bitcoin-powered Internet service. The students will then have the rest of the week to improve their version of the code before submitting it for judging. While technical aesthetics and usefulness will play an important role in picking the winning project, the instructors hinted that they may experiment with an Elo-style ranking system.

Enrollment in the course has doubled since last semester, with 83 students showing up for class on the first day. In response to the demand off-campus and abroad for access to the class material, Srinivasan and Boneh have considered offering a free massively open online course (MOOC) version of the class later this year.

Each student received a 21 Bitcoin Computer (21BC), known for being the “first computer with native hardware and software support for the bitcoin protocol,” on the first day of class. Because the 21BC developer kit abstracts away much of the Bitcoin protocol’s complexity, students with no prior Bitcoin experience (roughly 75 percent of the class) will be able to integrate the Bitcoin protocol into their future and existing projects with as little as two lines of code.

Students at Stanford University line up to receive their 21 Bitcoin Computers.

One of the instructors for this course, Dr. Srinivasan is the co-founder and CEO of 21 Inc., the company behind the 21 Bitcoin Computer. After working in secret for more than two years, 21 emerged last March to announce a $116 million round of funding from Andreessen Horowitz, Peter Theil, Khosla Ventures, Qualcomm and Cisco. In addition to his position at 21, Srinivasan is a board partner at Andreessen Horowitz, a board member of the Coin Center, the co-founder of Teleport, and the co-founder of Counsyl. In recognition of his work, Srinivasan has received The Wall Street Journal’s Innovation Award for Medicine and was listed in the Scientific American’s Top 10 World Changing Ideas.

The other instructor, Dr. Boneh is a computer science and electrical engineering professor at Stanford University and the second Andreessen Horowitz Professor-in-Residence. In addition to being one of the main contributors to the development of pairing-based cryptography, Boneh created the first broadcast encryption system with full collision resistance, and performed one of the first cryptanalysis using a DNA computer. Boneh co-founded Ingrian Networks and Voltage Security, the latter of which was acquired by Hewlett-Packard last year.

With the demand from banks and Wall Street companies for tech talent with Bitcoin-related technology experience at an all-time high, students taking this course will be uniquely positioned to leverage their newly found Bitcoin knowledge as they enter into the workforce over the next two years.

In addition to providing coverage of the technical concepts covered throughout the quarter, Bitcoin Magazine will be reporting regularly about the hackathon projects.

Photo Christian Sanz / Creative Commons

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Coinomi Founder John Jegutanis: Scale Bitcoin by Decreasing Latency

John Jegutanis, co-founder of bitcoin and altcoin mobile wallet Coinomi, recently proposed the concept of ”Soft Blocks“ to help scale Bitcoin. Soft Blocks, Jegutanis says, could reduce the risk of increasing Bitcoin’s block-size limit.

Speaking to Bitcoin Magazine, he explained: “It is not so much the block size – although yes, it must be increased – but the inefficiency of our current block relay mechanism that needs solving.”

The block-size dispute – which made headlines throughout 2015 – represents a trade-off between the number of transactions the Bitcoin network can handle and its decentralization.

While larger blocks would allow for more transactions, these blocks would take longer to propagate over the network. This could increase the rate of pruned (“orphaned”) blocks, as miners will build blocks on top of older blocks while newer blocks are still making their way to them. Some worry this would favor larger miners (and pools) more than smaller miners, as larger pools don’t need to wait for blocks as often; they mine more blocks themselves. (Additionally, a higher prune rate would decrease Bitcoin’s security overall, as the hash power invested in these blocks doesn’t secure the network.)

Jegutanis’ Coinomi was one of the first Bitcoin wallets to test Bitcoin XT – designed to hard fork a block-size limit increase through BIP 101. While Coinomi is compatible with Bitcoin XT, Jegutanis decided not to enable it in production until developer consensus has emerged.

Jegutanis still supports a hard fork to increase the block size, however, and proposes to decrease propagation time through Soft Blocks.

Similar to other potential block propagation improvements such as IBLTs and – in particular – “Weak Blocks,” Soft Blocks do away with the need to transmit full blocks over the Bitcoin network once a block is found.

Instead, miners can effectively transmit a confirmation and proof that they, indeed, found a block, which requires much less data to be sent around the network. This vastly decreases propagation time, limiting pruning risk.

“While it is true that slow propagation favors larger miners, I believe we can relegate this to a theoretical concern only,” Jegutanis explained. “In reality, miners will want to propagate their blocks to as many miners as fast as possible; they would be gambling otherwise. Solutions such as Matt Corallo’s relay network and soft blocks will help them with that.”

As such, Jegutanis believes the block-size limit should be increased more rather than less. While he supports the Segregated Witnessheavy scalability road map as laid out by Bitcoin Core and Blockstream developer Gregory Maxwell, Jegutanis indicated he believes Bitcoin will need a hard fork to increase the block-size limit in the longer term.

“I think Segregated Witness is a really, really smart ‘hack’ that solves many problems,” Jegutanis said. “But it creates a new problem: It’s effectively a block-size increase that the peer-to-peer network cannot efficiently handle. We, therefore, need a solution to increase block propagation as well, like soft blocks. And if we have that, we might as well increase the block-size limit a lot more. BIP 101 solves the problem of full blocks for once and for all. We will never hit this ceiling as we are hitting the 1 megabyte ceiling recently.”

Photo Emile Aben / Creative Commons

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Bitcoin a Safe Haven as Global Equities and Commodities Tumble

On the first week of trading in 2016, U.S. and European markets have fallen markedly. Britain has undergone its worst trading start to the new year in 16 years. China, with a long history of command-and-control economics, has enjoyed recent literature about its more laissez-faire ways, but in times of crisis, the government institutes regulations in order to keep the nation afloat.

In its 25-year history, China’s stock market experienced its shortest day of trading on Thursday. Concerns about capital flight have taken foothold in the world’s second-largest economy.

Thirty minutes after opening, markets ceased trading in order to limit volatility. The Shanghai Composite Index ended its sessions down more than 7 percent at 3115.89. The yuan fell 0.5 percent from its Wednesday rate. Stocks had also fallen throughout Monday.

The yuan fell nearly 1 percent overseas. For the year, the offshore yuan has declined 2.7 percent and is at a record low against the U.S. dollar. The People’s Bank of China stated: “some speculative forces are trying to reap gains from playing [the yuan].”

Such trades “have nothing to do with [China’s] real economy” and precipitated “abnormal fluctuations” in the yuan, the central bank stated.

Because China’s economy is so large, other global currency markets rebalance their currencies so as to negate any benefit that would be felt by Chinese exporters. China, which is often touted as quasi free market, also instituted new regulations, as the Chinese Securities Regulatory Commission declared after trading stopped that shareholders owning 5 percent or more of a listed company are barred from selling more than 1 percent of outstanding shares.

They are also henceforth required to notify exchanges of sales 15 trading sessions prior to execution. This is set to last three months, but the commision is gaining a reputation for renewing old regulations or instituting new ones.

Oil prices and the U.S. stock market acted ahead of China’s steep decline on Thursday, as the Dow Jones Industrial Average declined to a three-month nadir, declining 252.15 points, or 1.5 percent, to 16906.51. That’s the lowest close since October 6.

The price of U.S. crude oil declined 5.6 percent. The S&P 500 fell 26.45 points, or 1.3 percent to 1990.26. Nasdaq fell 55.67 points or 1.1 percent to 4,835.76.

European stock markets also suffered a “rollercoaster” ride this week. Britain endured its worst new yearstart to trading in 16 years.

Mike van Dulken, of Accendo Markets, told The Telegraph: “Gold is still attempting to break out beyond two-month falling highs around $1,075 as it benefits from safe-haven demand amid market volatility and geopolitical risk.”

Amid the chaos, Bitcoin has firmed its bearings at $450, acting in much the same way it usually does when stocks become volatile as they have across the globe in the first week of trading.

Although engulfed in a bit of a “constitutional crisis,” Bitcoin appears to enjoy healthy demand in times of crisis, almost acting as a safe haven asset as investors call commodities and investments that do well in times of uncertainty.

Not only has the raw Bitcoin price done well in the new year, but so too has the public market-based Bitcoin Investment Trust (GBTC).

The Winklevoss twins’ Gemini Exchange has seen a spike in trade volume in the past 24 hours. So, it appears that, while global stocks panic, those based in Bitcoin sustain the crisis quite handsomely.

The shaky markets could be fallout from the U.S. Federal Reserve’s recent small increase in the interest rate .25 percent from December when it raised the benchmark interest rates for the first time in almost 10 years.

The Federal Reserve called its December decision a “close call.”

The Fed said:

In the economic forecast prepared by the staff for the December FOMC meeting, real GDP growth in the second half of this year was little changed, on net, relative to the projection for the October meeting. The staff’s medium-term projection for real GDP growth was revised up slightly, on balance, from the previous forecast, primarily because the recently passed Bipartisan Budget Act of 2015 was anticipated to lead to somewhat higher federal government purchases.
As a result of the recently passed Bipartisan Budget Act, federal spending was expected to provide a modest boost to economic activity over the next few years.

The Fed made the entire world nervous by keeping interest rates low for nearly a decade. This built anticipation inside the global investor that, once interest rates raised, this forebode economic uncertainty.

Perhaps this is what is now playing out in the beginning of 2016, perhaps not. Nobody knows what the Fed’s decision regarding raising interest rates will have. Commodities are continuing to fall, which hurts many nations and global producers, including the so-called “BRICs” who were supposed to power the global economy through the recession.

Photo 2 dogs / Flickr(CC)

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