Subject: [bitcoindev] Re: The Future of Bitcoin Testnet

From: Garlo Nicon <[email-masked]>
Date: Mon, 8 Apr 2024 12:11:53 -0700 (PDT)

> so mining is not doing a great job at distributing testnet coins any more

It is a feature, not a bug. Would people want to reset Bitcoin main network 
in the future, for exactly the same reasons? Or would they want to 
introduce "tail supply", or other similar inventions, to provide sufficient 
incentive for miners? This testnet3 is unique, because it has quite low 
block reward. And that particular feature should be preserved, even if the 
network would be resetted (for example, it could be "after 12 halvings, but 
where all previous coins were burned"). And not, it is not the same as 
starting from 50 tBTC, as long as fee rates are left unchanged (and 0.014 
TBTC means "the ability to push around 1.4 MB of data, with feerate of 1 
sat/vB", instead of 50 tBTC, which means "pushing 5 GB with the same 
feerate").

> a rather amusing edge case bug that causes the difficulty to regularly 
get reset to 1

It can be fixed in a soft-fork way, no network reset is needed to achieve 
that. Because if there is a block number X, and it could have minimal 
difficulty, under the current rules, then it is possible to reject it, and 
enforce the higher difficulty. In general, increasing difficulty is a 
soft-fork. For example, if someone would enforce testnet difficulty on 
regtest, it would be perfectly valid. All that is needed, is just rejecting 
more block hashes, so even if all fields are left unchanged, the old client 
could see, that the 32-bit difficulty field says "minimal", but produced 
blocks are not accepted, and "the true difficulty" is put anywhere else, 
for example just after the block number in the coinbase transaction.

> Testnet3 is being actively used for scammy airdrops

This is because mining is costly, and because coins are never "resetted", 
so they are never "worthless". Pointing at some chain, and saying "this 
should be worthless" is not enough to make it. There are no consensus rules 
to ensure that test coins are truly worthless. There is no "automatic 
reset", or any "demurrage". If large amounts of coins are misused, then 
that misuse can be stopped, by burning coins, or invalidating them in any 
other way, for example "the coin is unspendable, if it was created during 
the previous halving". As long as there are no such rules, resetting the 
network won't help in the long term, so something new is needed, to 
discourage assigning any value into test coins.

> Should we plan for a reset of testnet?

I guess the answer is "yes", but maybe not by "throwing away the whole 
existing chain", but just by "fixing errors one-by-one". For example, 
fixing blockstorms as a soft-fork would be a good starting point. And in 
practice, it may turn out, that all fixes could be applied in a soft-fork 
way, which would be the best, because then it would be enforced also on 
non-upgraded clients.

> If so, given how long it has been since the last reset and how many 
production systems will need to be updated, would a reset need to be done 
with a great deal of notice?

No additional "notice" would be needed, if every "fix" would be a 
soft-fork, and if all old clients would follow all new changes.

> Is there interest in fixing the difficulty reset bug?

Yes. But because it could be a soft-fork, miners could signal readiness in 
block versions. Also, as with every other soft-fork, it would have 
additional advantage, that if someone would want to locally test 
"blockstorms", then that person would be able to locally create a chain, 
where that particular soft-fork would be inactive. Which means, that it 
would be still possible, to download the new chain, and disable that 
soft-fork locally, if someone would need it.

> Would such a change, which would technically be a hard fork

It would be a soft-fork. Each difficulty increase is a soft-fork, because 
"old blocks are invalid in a new version" (they don't meet increased 
difficulty), but also "new blocks are valid in an old version" (they meet 
the old difficulty, exactly as the mainnet Genesis Block with 40 leading 
zero bits meets the required difficulty with 32 leading zeroes).

> necessitate a BIP or could we just YOLO it?

Well, it is possible to just add some flag, like "-blockstorm=0". Then, 
some miners could activate it, just like they activated full-RBF. And if 
the majority would want to get rid of blockstorms, then it would just 
happen naturally, if the majority would simply reject blockstorms in a 
soft-fork way. I think it is not that important to make a BIP, unless you 
really want to get through the whole process.

> Is all of the above a waste of time and we should instead deprecate 
testnet in favor of signet?

This scenario is also possible, but probably not in the way you think. 
Transition from testnet into signet is a perfect soft-fork. If you decide, 
that since block number N, all blocks should be signed with "signet 
challenge", then it would lead to a natural conversion from permissionless 
mining into permissioned mining. You can implement it, and start with 
OP_TRUE, to test, if everything is working correctly. And then, you can 
apply for example "OP_1 <taproot_address>" as the signet challenge, and 
then use all TapScript features to sign new testnet3 blocks.

sunday, 31 march 2024 at 15:24:34 UTC+2 Jameson Lopp wrote:

Hi all,

I'd like to open a discussion about testnet3 to put out some feelers on 
potential changes to it. First, a few facts:

1. Testnet3 has been running for 13 years. It's on block 2.5 million 
something and the block reward is down to ~0.014 TBTC, so mining is not 
doing a great job at distributing testnet coins any more.

2. The reason the block height is insanely high is due to a rather amusing 
edge case bug that causes the difficulty to regularly get reset to 1, which 
causes a bit of havoc. If you want a deep dive into the quirk: 
https://blog.lopp.net/the-block-storms-of-bitcoins-testnet/

3. Testnet3 is being actively used for scammy airdrops; those of us who 
tend to be generous with our testnet coins are getting hounded by 
non-developers chasing cheap gains.

4. As a result, TBTC is being actively bought and sold; one could argue 
that the fundamental principle of testnet coins having no value has been 
broken.

This leads me to ponder the following questions, for which I'm soliciting 
feedback.

1. Should we plan for a reset of testnet? If so, given how long it has been 
since the last reset and how many production systems will need to be 
updated, would a reset need to be done with a great deal of notice?

2. Is there interest in fixing the difficulty reset bug? It should be a one 
liner fix, and I'd argue it could be done sooner rather than later, and 
orthogonal to the network reset question. Would such a change, which would 
technically be a hard fork (but also arguably a self resolving fork due to 
the difficulty dynamics) necessitate a BIP or could we just YOLO it?

3. Is all of the above a waste of time and we should instead deprecate 
testnet in favor of signet?

- Jameson

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