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Early bitcoin users reduced transaction fees or increased their anonymity online, but how? Have a seat, we're about to share all about it 🤫

It seems like an outdated and inconvenient solution now, but there used to be transaction tumbling.

The idea behind this solution was this:

Let's say you are Alice, who has to make a transfer to Bob every day. Bob, in turn, also has to transfer funds to someone else quite often, e.g., Eve and so on in a circle.

Would you agree that it is not very profitable to send dozens of transactions to each other every day? Bitcoin commissions are quite high, and hardly everyone likes the publicity of your daily transfers.

The solution to this problem was transaction tumbling. To create a tunnel, you had to stipulate all its participants in advance. A departure of one of the participants from your group or the addition of a new one leads to the destruction of the old tunnel and the formation of a new one, so you need to precisely stipulate the terms of your cooperation in advance.

So, how does it work?

In general, this mechanism has numerous different implementations, but one of the most common solutions is using a trusted service.

➡️ You form a group of participants who will mix transactions among themselves in the future.

➡️ You transfer your funds to a temporary account, which is controlled by a trusted service.

➡️ Through the trusted service or in any other way, all group members indicate where and what amounts they will send within a predetermined period of time.

➡️ After your contract is finalized, the service or participants calculate how much each user needs to transfer and a single transfer is made.

As a result, instead of paying numerous commissions, each participant pays only for the deposit of funds and the service for their withdrawal. In addition, it becomes more difficult to track the exact movement of funds, which increases the anonymity of such transfers. However, with the passage of time and improvement of bitcoin analytics technologies, such solutions became irrelevant and outdated.

They have been replaced by second-tier protocol solutions for Bitcoin that allow for instant and low-cost transactions between all participants. They also allow the creation of private channels between different users.

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⚡️ Breaking News. Again:

😠 The candidates for the next presidency of the United States have abandoned the standardized vote and decided that the one whose meme token raises the most money will win. So far, $TRUMP and $BODEN are among the leaders.

🔒 One developed country's tax service has been out of business for a year and shut down as a result due to fierce debate over which blockchain they should analyze first for fraudulent transactions.

👽 When disassembling the miners , the main source of the noise was revealed - all of it it was the fault of colonies of little aliens from the planet ToTheMoon, which make a very loud slurping noise when they absorb electricity.

📝 Scientists have created the most energy-efficient consensus algorithm, Proof of paper. You write a check, which is the proof of funds transfer. It works asynchronously and provides more bandwidth.

🍅 During Elon Musk's stream, fruit got into the frame, some serious Bloomberg analysts took it as a signal and began to buy vegetable meme-tokens en masse.

If you ask our CEO what he thinks the best place in the world is, he will no doubt say Dubai, but in his heart he will only remember our farm. No wonder, look how beautiful it is!👀

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Time to Say Goodbye!🥺

Starting next week, we will gradually begin decommissioning the old, inefficient miners to make way for new equipment that is about to arrive at our farm.

Your income and hashrate will remain stable. But there may be short-term fluctuations in the residual hashrate, which is used to replenish the Treasury. After new miners are connected we are going to mine even more profit for our users.

Like = Pay tribute to the retiring old miners ❤️

⚡️ Wrote a short article about the main usage difference between DeFi and bitcoin. Don't forget to share your opinion via reactions or in the comments 👇🏻

We asked our corporate crypto-psychic to look at the stars, calculate the best karmic hours to buy coins and this is what we found out for each zodiac sign!

For each like we will send her 2 BTCMT as a thank you 🤡

⚡️ PoW Blockchains: Decentralization and Censorship

Today, fewer and fewer blockchains use PoW technology while PoS networks are favored. Despite the fact that PoS has a huge number of advantages, such as energy efficiency, increased resilience, improved scalability and broad adaptability, it also has some significant drawbacks. One of the main disadvantages of such blockchains is centralization. This disadvantage has become particularly noticeable with the emergence and flourishing of liquid steakings such as LIDO.

The technical entry threshold for PoS blockchain validators has become much lower than it was for PoW. Instead of a farm of asics or graphics cards, it now requires only a single computer connected to the network. This greatly simplifies the ability of single validators to participate in consensus. Without additional hardware costs, validators will be able to validate blocks or even produce them with luck. However, there is still a high entry threshold from a financial perspective for PoS network validators.

For example, on Ethereum the minimum amount of ETH needed to become a single validator is 32. At the current exchange rate, that's about $96,000. However, this problem is completely solved by liquid staking protocols, where you can deposit any amount of free tokens without taking into account the small commission and receive income as if you were a full-fledged network validator

Solving this problem as it is actually holds a much bigger danger — network centralization. Using the same Ethereum as an example, we can see that more than 80% of all funds in staking are provided by just 1 liquid staking protocol. This carries two serious problems — uneven geographic distribution of validators and censorship.

Blockchain censorship seems absurd, as the blockchain was originally created for the exact opposite purpose, but the reality is much worse. Even now, some transactions that are related to the operation of Tornado Cash or other protocols prohibited for use in some countries are not added to the blockchain. They are processed by only a small number of independent single validators, which obviously decreases the speed of their processing and inclusion in blocks. Geographical skewing of validators is also a consequence of the emergence of liquid staking, as in order to optimize costs and reduce possible risks associated with the loss of Internet packets, subordinate validators are placed physically close to each other. As a result, transactions sent from another continent have fewer privileges than transactions sent to a network near a cluster of nodes.

These problems are also exacerbated by the fact that in PoW networks, periodic hardware changes are required to improve computing power or energy efficiency, while in PoS networks this is not necessary to improve profits. As a result, this fact leads to capital accumulation and retention in the hands of large owners who invest the rewards earned in staking back into it. This leads to a constant increase in their funds, which under this system of operation can lead to irreparable consequences in the future. In this case, the expediency of network participants with small capital is negated, because the more funds are blocked in staking, the smaller rewards all validators receive.

To summarize, we would like to note that the PoS network protocol needs various updates and improvements. That is why bitcoin and other large PoW-based blockchains are the most decentralized of all, despite the «obsolescence» of their consensus algorithms.

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While everyone is having a Solana summer, we're announcing a week of Ryan Gosling memes.

Like = you're a Ryan fan too ❤️

Without words 🤡