TL:DR; ATO treats forks as creating a “new asset” causing unexpected tax burdens for any Australian taxpayer holding cryptocurrencies in future.


I got a nasty surprise when preparing my 2017/2018 tax return. I had sold my Bitcoin Cash as fast as possible, and gotten around to selling other minor forks just before the close of the financial year. The ATO then decided that those sales were (1) assets under 12 months old, and (2) a cost-basis of 0. The result was that they wanted 48% of the amount in tax; over twice what I was expecting and had set aside!

Extended plugin features and dynamic add & remove

Written by Rusty Russell

The c-lightning team is proud to announce the v0.7.2 release of c-lightning. This is the first of our new “every two months” timed releases, and it has improvements across the board. This is a recommended upgrade!

  • Plugin improvements: External contributor Antoine Poinsot contributed dynamic plugins: this means you can now add and remove plugins to a running lightning daemon without restarting.
  • New plugin notifications: invoice_payment tells you when an invoice has been paid, forward_event tells you when an HTLC is forwarded and channel_opened tells you when a new channel has been opened.
  • Better handling of peer…

Fears over the declining block reward are real.

I hypothesize several hundred billion, in present value USD, would be an adequate security budget — Dan Held,

Dan dismisses concerns about Bitcoin’s security once we transition to fees; he’s wrong. [Note: Dan claims I misread maliciously, and that is an annual budget, hence I have fixed up below.]

Taking his quote above, let’s assume we want it to cost $̶1̶0̶0̶ ̶B̶i̶l̶l̶i̶o̶n̶ $700 Million USD to undo 100 blocks, widely considered an “uncrossable threshold” in bitcoin; at that point, miners’ coins start disappearing and chaos ensues.

That implies we’re paying $̶1̶0̶0̶ ̶B̶i̶l̶l̶i̶o̶n̶ 700 Million USD in fees per 100…

My mainnet node sees 23304 unique channels (technically 45958 half-channels) from 2902 nodes; mean capacity is 0.027 BTC ($US92), median is 0.005 BTC ($17).

Capacity of Channels; Limited to 0.16777216 by Protocol

Mean fee is 960 millisatoshis + 190 parts-per-million, median is 1000 millisatoshis+ 1 ppm. (I trimmed outliers, and rounded). This shows that most people are running with the (lnd/c-lightning) default fee settings:

I’ve had this idea for a while, but I’ve never got around to it so I’m calling publicly for collaborators:

The project would be in several parts:

  1. Do some rough analysis of the current lightning network: number of (public) channels, number of nodes, distribution of channels by node, and distribution of channels in blocks.
  2. Apply a scaling factor to make a similar network on regtest, preferably in a reproducible manner. This would be the corpus.
  3. Write a program to generate all the gossip generated by that network.
  4. Feed the gossip into a test node and watch it die horribly.

Last week I had the honor of hosting the key Lightning developers in my hometown of Adelaide, Australia. I put this article on for a week before publishing it on here Medium (the resulting US$6 has gone into my c-lightning testing node 024b9a1fa8e006f1e3937f65f66c408e6da8e1ca728ea43222a7381df1cc449605 which I use for random test payments: thanks!).

The Path To The Summit

Once we had announced a spec freeze for 1.0, there was always an intention to have a face-to-face meeting to decide on targets for 1.1. Unlike Milan, I worried that we’d be overwhelmed with explaining details to newcomers and not be productive, so I modelled the Summit on…

It’s natural to make simplifying assumptions about technology; such abstractions let us build on top without dealing with exponentially increasing complexity. But it’s worth revisiting our assumptions occasionally, particularly when they’re yet to be proven.

Is It Sufficient?

Bitcoin works by nodes validating transactions (economic actors), and tie-breaks between valid alternatives being provided by Proof of Work (miners). The state is kept as small as possible to reduce barriers to entry in mining; the constant supervision of nodes provides economic incentives for miners to create valid blocks, the slow reduction in subsidy (in favor of fees) provides incentive for miners to fill blocks.

I work on Bitcoin (currently: Lightning Network), continuing a 20 year career of Free/Open Source Software development. I love the developers and the project, but sometimes I despair of the environment.

I wrote rant which my more level-headed colleagues advised me not to post, but this issue is one I feel strongly about, which won’t go away: we are beset by scammers, attracted by the “free” money. If we compare ourselves to them, it will inevitably lower our ethical and moral standards until we do something abhorrent to our former selves.

Ever been tempted to start an altcoin? Launch an…

“Be excellent to each other please!”

— Lightning-dev mailing list welcome message

Two and a half years ago I read a paper which, once I finally understood it, opened my eyes to what bitcoin could be. I felt compelled to implement it, and I spent a year experimenting, refining and playing with the concepts.

Other engineers were also inspired, and Joseph suggested we collaborate on a specification; this is the kind of thing I’ve done before and so it seemed natural. …

The way the bitcoin ecosystem will play out is written in the mathematics of its consensus rules; we should all know the three phases it will go through.

First Era: Satoshi’s Free Offer (2009–2014)

In the early years of bitcoin, it was obscure and unvaluable. Demand was so tiny you could send any amount for free. There was no real congestion, so software didn’t handle it, nor did business plans: gambling service Satoshidice famously sent a 1-satoshi payment to losing bets, using the infinite-capacity blockchain as a signaling layer. It was all free money.

Bitcoin was a new, barely-understood technology. It was hard enough to comprehend…

Rusty Russell

Rusty is a Linux kernel dev who wandered into Blockstream, and is currently trying to produce a prototype and spec for bitcoin lightning. Hodls bitcoin (only).

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store