A new project called UnitedBitcoin (warning: the site autoplays audio) promises to add smart contract features using the UTXO model, support for the lightning network and SegWit, and eight-megabyte blocks. Headed up by Jeff Garzik, the lead developer behind the failed SegWit2x hard fork, along with Matthew Roszak and SongXiu Hua, this UnitedBitcoin (UB) hard fork will offer replay protection to prevent people from accidentally spending their coins on both the Bitcoin and the UnitedBitcoin blockchains.
Garzik told Bitcoin Magazine that 10% of the total worldwide SHA-256 hash power has moved to the new UB network, with much of the support coming from China and older mining equipment that was no longer profitable due to the escalating difficulty in mining bitcoin. He noted that UB is already supported on the ZB and EXX exchanges.
The UB white paper outlines how lost bitcoins have created deflationary pressure that has pushed the price up. Because those bitcoins are out of circulation, the supply is further decreased. One of the issues that UB seeks to address is to find a purpose both for those lost bitcoins and for inactive wallets by creating a stable cryptocurrency linked to their addresses.
All active Bitcoin addresses will receive the same balance on the UB chain, much like previous forks. The balances of UB on inactive addresses, however, will be confiscated by the UB Foundation and used to serve the community.
Inactive addresses are defined in the white paper as addresses without activity since block height #494000 (November 11, 2017) and as a result didnt automatically receive UBTC during phase 1 of the asset allocation procedure.
UB does not distinguish between an inactive address and one which is simply being used by a long-time "hodler."
There is no difference. An inactive account is an inactive account, said Garzik. Like during [the] Ethereum new coin creation, you had to take a proactive step, otherwise you got zero [ether]. This is normal for new token creation new chain, new ERC20, but different from all other Bitcoin Forks. We are trying to do something new and different.
Anyone with a prior balance of 0.01 BTC in an inactive address at the time of the November 11 fork can still get UB tokens, so long as they are willing to take such a proactive step: that is, they make at least one transfer to their own Bitcoin address between Block 498,777 and Block 501,878 (December 12, 2017, to 12:00 GMT on January 3, 2018).
Only the original address can make the transfer to itself, and the receiving address must be used as one of the sending (input) addresses.
One privacy issue to consider is that in order to proactively claim BU tokens, the protocol forces users to reuse their Bitcoin addresses; this action puts privacy at risk and, unless it is done carefully, may link many of the users coins together.
User privacy protection is not the only part of the protocol that is drawing criticism, however.
The code contains a god mode; its literally called that, Blockchain developer Sjors Provoost said to Bitcoin Magazine. He said that it appears as if this god mode will create a multisignature address that belongs to a (yet-to-be-defined) UnitedBitcoin Foundation.
Unlike previous airdrops, the initial coin distribution is not determined by a consensus rule, he added. This means that even if you were to run the full UB node software (which you should not), you will have no way of knowing for sure how many coins you get. Conversely, if you already had bitcoin, you wont know how many of your coins will be confiscated. You simply have to trust their promise to take and redistribute coins as their marketing promises.
According to Provoost, the new consensus rule allows the owner of this foundation address to spend any UTXO they want. These confiscations will be included in holy blocks, which can be created during the first 500 blocks after the fork. This is how they implement the redistribution as I just described, but they can do much more.
Furthermore, Provoost is concerned about the quality of the code itself. Garziks previous project SegWit2x tried to keep its changes relative to Core to a bare minimum. Although at the time of the planned fork their code base was about a year behind Bitcoin Core, it didnt introduce many changes, he pointed out.
UnitedBitcoin on the other hand has introduced far more changes, making the task of tracking Bitcoin Core far more difficult. Its not as many changes as Bitcoin Unlimited and Bitcoin Cash, and the problem is somewhat mitigated by them sunsetting the more complicated consensus changes like god mode. However, even the small change in SegWit2x had a widely publicized serious bug in it and there are rumors of more.
Garzik has plans to build a better Tether by using the UB reserve, funded by coins reclaimed from inactive addresses. According to the project, 70 percent of confiscated UB coins will be held as collateral to issue stable tokens pegged to a fiat currency.
The UB reserve can be used as a backing asset for a stable, non-volatile currency, said Garzik. This is auditable and transparent and on the blockchain. It will be over-collateralized, 200300% to maintain the stability even in the face of a volatile price of the reserve.
The remaining 30 percent of the confiscated coins will support another new feature: owners of QTUM, H-shares and ether will receive a share of the remaining redistributed UB.
According to Garzik, the specific claim process for the redistribution of UB has yet to be determined. The UB board is still being put in place things are moving very fast and this will include more specifics on governance and community allocations.
The scheduled timeline of what has been released and what is coming breaks down as follows:
Fork of Bitcoin to UnitedBitcoin (at block height #498,777) with support for:
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