Bitcoin as a Mandala Network

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Or how I learned to stop worrying and love coin backups

Well, it has finally happened. The world of BSV is finally starting to think big and start discussing and debating the economic inevitabilities that your wallet starter phrase won’t work forever. *breath*

I first wrote about this two years ago in an article about the commons brainworm tragedy plaguing the Bitcoin ecosystem as a whole. And I even had more than a few debates on Twitter with self-proclaimed socialist-thinking blockchain experts like Derek Moore at the time, who claimed that miners were already duly paid for perpetual storage of whatever anyone wanted. put on the blockchain. Well, the time for their comeuppance has finally arrived. I told you. Thanks to the creeping upscaling of BSV seen over the past 6 months, people are finally starting to realize[1] that you can’t expect miners to store everything forever and what that means for wallets is starting to scare some people.

Well, dear reader, you are in BSV, aren’t you? You have to be used to your view of reality being constantly challenged. So it won’t be too uncomfortable for you. To other readers, I apologize for the inconvenience to come and my lawyer told me to state up front that I will not be held responsible for any seizures, aneurysms or myocardial infarctions that may occur. You were warned.

As mentioned in the opening paragraph, your opening sentences – that is, those 12 secret words your friend told you to keep in a steel case – won’t work forever. This, while shocking for any maximalist reading of BTC here (well, what are you doing here in the adult section of the internet anyway? The kids section is here, move on now, shoo!) don’t believe in big blocks and BSV. It just means that you just kicked the box like any good politician in the hopes of making this unpopular truth the next guy’s problem instead of your own. Why? Well, Connor explained it well in his video, expecting there to be free services that will be used for the recovery of anonymous wallet coins is a mistaken expectation in any long term horizon in any capitalist world anyway.

The solution, of course, is also capitalist. Just be prepared to pay for this service. So far, I have just rehashed what I already discussed in my original article on the tragedy of the commons. Let’s dive a little deeper into this period.

In the original article, I explained that there was a whole layer of service providers that would necessarily have to exist in the Bitcoin network, if the Bitcoin protocol was allowed to be free and openly innovative instead of protocol developers trying to fix everything centrally and in so doing, stifle natural economic specialization and diversification. In BSV we don’t have this problem, as the base protocol is set in stone and any attempt to change it will make this version non-BSV. This is the reason why BSV is the first public blockchain to encounter this problem in nature.

Let’s start by separating the two often confused tasks: private key recovery vs coin recovery.

Most people today see them as one and the same and this is partly the fault of the way portfolios are currently designed. In their attempt to simplify the user experience, wallet developers hid the notion of keys and coins (aka UTXO) from users. They want the view to look like a wallet. A virtual bag of chips. But below all of that, the wallets manage two sets of data: the keys which are used to generate addresses and the actual bitcoin coins that you own and can spend. With a brain wallet or a starter phrase, you can only regenerate the keys. He alone cannot restore a portfolio and its balance.

Along with this starting sentence, to restore, you must find the parts you own. Now normally this is not a difficult task, as all the unspent coins (everyone, not just yours) are necessarily stored by the miners in the blockchain network, but there is no guarantee that they will serve them to you. when you need it. Currently, most wallets run their own backend services for free or use free blockchain explorer APIs. Also, the nodes in the network only have the set of unspent coins and the block explorers only contain historical spend, but not any additional comments or metadata that you may have kept in your wallet about it. .[2] spent.

This means that while you can get your current wallet balance back if you just kindly ask a miner, they won’t necessarily be able to give you the full spending history of your wallet. For this history, you will need historical information about coins spent and something that only your wallet has, metadata. As the blockchain is a database to which data is continually being added, the cost of keeping all historical blocks increases monotonously, and unless a service generates revenue, they will not exist. If only there was a service that would accept the transactions you send to it, and keep them perpetually

The solution to this problem[3] is right to let capitalism do its job. The wallets themselves record all the coins they have spent and all the coins they currently own. This data is not large and can be backed up by traditional means. It can also be placed in password programs or other encrypted storage solutions, so that it can be restored later. But that does mean that your backup format may differ from wallet to wallet, and it also means that if it is stored in encrypted form, you might forget the password. Treat wallet backups like backups of sensitive data. Keep multiple backups.

The other problem is that backups will have to be done often, if the wallet is active. Ideally, a backup of the coin set should be written to the backup after each transaction. This backup can itself be written to the blockchain as data, as the coin and history information itself is not sensitive, and the keys themselves can be generated separately using phrases. traditional starting points. This backup transaction can be forwarded to an archiving service, for a one-time cost, in the hope that if you request it later, they can charge you for it. For wallets that are more for cold storage or secure vaults that won’t be used much on a regular basis, they can afford to back up much less often.

Thus, archive nodes finally seem to be at the heart of people’s concerns. A company that runs a full copy of the blockchain and will give you access to all historical coins for a price. Thanks to BSV, paying for this service will be easier than ever. You don’t have to go to a website, download software, or import anything. In fact, considering some middleware projects like Babbage, you might soon automatically pay for a backup of a wallet through the wallet itself. Imagine, you have a starter phrase for a wallet that you haven’t used for 50 years. You download the latest version of a wallet, it asks if you have a backup file. You don’t. (If you did that would restore everything and you would be done) then you have the option to pay for a restore, which charges you 3% of the value of the restored parts or 5% of you want a full expense history[4]. You agree, enter your start phrase (which includes decryption passwords), wait as long as it takes to make yourself a Tom Collins, and boom, you’re done. (Less 5% that went to the wallet and archive service it used). This will also work for all hardware wallets.

Once again capitalism to the rescue. No core developer required. No new blockchain required[5]. Just supply, driven by demand. Demand seems to be mounting rapidly now, and the middle layer of the mandala network that Craig spoke about (and first reminded me of that faithful day in July 2017) is finally being recognized, and the real innovation of the economy will likely be the first to take advantage of it.

/ Jerry Chan

The Wall Street Technologist

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[1] Connor Murray, Seed Phrases and Mandala network – https://youtu.be/3_3jLw0kMHM

Joshua Henslee, On Seed Restoration and UTXO Management – https://youtu.be/XMFCMcSCYJs

[2] Was it 5 years ago at this address 1933ae5GsXB this payment for the LN in just 18 million! hat I bought from Blockstream? Or was it to pay for that latest Twitter retweet service? Damn, I’d like to keep records!

[3] I use quotes because I don’t see this as a problem, it’s just a lack of services that will eventually grow, if you believe in the free market and the lack of interference from protocol developers and developers. socialist nannies like Derek Moore.

[4] Some may wonder how to achieve this. One way is to put the expense comments in the transactions themselves, encrypted by the key itself. There are undoubtedly many other means.

[5] It’s really sad to have to say that. But it’s still true that people will make more money by building their own blockchain and selling its token pre-sale, then building something useful on top of the existing blockchains we have. Ahem, I’m looking at you Derek Moore.

New to Bitcoin? Check out the Bitcoin for Beginners section of CoinGeek, the ultimate resource guide to learn more about Bitcoin initially envisioned by Satoshi Nakamoto and the blockchain.

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