The Bitcoin sidechain Liquid Network will execute the DynaFed hardfork on Oct. 4.
Liquid Schedules DynaFed Hardfork
A hardfork for the Bitcoin sidechain Liquid Network is scheduled to go live on Oct. 4.
Liquid Network is one of the two leading Layer 2 protocols on Bitcoin, alongside Lightning Network. Developed by Blockstream, both projects enhance Bitcoin’s scalability and allow the network to support faster payments.
Lightning Network is Blockstream’s most popular product. It was created to settle small-scale merchant payments, whereas Liquid Network is designed for traders and exchanges looking to move larger amounts of Bitcoin.
Blockstream’s most popular product called Lightning was created to settle smaller merchant payments. On the other hand, Liquid was designed for traders and exchanges to transact big amounts of Bitcoin quickly and privately.
The hardfork, dubbed Dynamic Federations (DynaFed), is aiming to improve the security and flexibility of Liquid Network.
In a Wednesday tweet, Blockstream said that the DynaFed was the sidechain’s “the biggest update to date.”
Some of the most important aspects of the upgrade include increasing the number of functionaries, which are currently limited to 15, and adding and removing functionaries without affecting network operations. Functionaries are the network’s equivalent of validators. They play a critical role in securing transactions and assets on Liquid by running specialized hardware security modules.
The hardfork is also aiming to improve the security of the functionaries. The update brings improvements to the current multi-signature model and restricts functionaries’ access to emergency keys by extending the time lock parameter. It’s hoped that the changes will eliminate the possibility of a nefarious entity stealing funds from the network.
According to Blockstream, users running Liquid Network nodes will need to upgrade to node client version Elements v0.18.1.11 to avoid service interruption.
While Liquid Network is a sidechain to Bitcoin, the base chain itself is also due to launch its own update later this year. Taproot is due to launch in November, opening the door for DeFi to emerge on the network.
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This article covers the materials needed, installation, configuration and operation of a Bitcoin node connected via satellite using a Raspberry Pi and aBlockstreamsatellite kit.
Special thank you toIgor Freirefrom Blockstream, his patience and attention to detail were tremendous resources for the author through this exercise.
This guide has the following sections:
Satellite Selection And Rough Pointing Angles
Raspberry Pi OS Image
Configuring The SSD
Installing And Configuring BlockSat-CLI And Bitcoin Satellite
Dialing In The Antenna Pointing Angles
Running Bitcoin Satellite
All together, a setup like this will cost less than $800 for all the required materials. You will also benefit from having a laptop with WiFi capabilities.
Everything needed for the Raspberry Pi comes in the CanaKit listed above, except for the SSD.
Make sure to first install the supplied heat sinks as shown here:
Then, start with the lower portion of the case and place the Raspberry Pi circuit board on it. Then, place the middle of the case on the circuit board as shown here:
Then, connect the red lead from the fan to pin #2, which is the five-volt direct current power supply pin. Connect the black lead from the fan to pin #6, which is the ground pin. The fan itself snaps into place on the underside of the top of the case.
Then, snap the top of the case onto the middle part and the Raspberry Pi assembly is finished. You can set this aside for now and we’ll come back to it later.
Satellite Selection And Rough Pointing Angles
Navigate to the Blockstream Satellite network coverage website and make note of the satellite with the strongest signal for your geographic location. You will want to either drop a pin on the map, enter the address where the satellite will be installed, or use a satellite pointer mobile app to get the most accurate elevation, azimuth and polarity numbers that you will need to set up your mounting bracket and antenna.
For example, using the Denver Federal Reserve bank address:
1020 16th Street Mall, Denver, Colorado, 80202, United States
Enter this address into the satellite map website, it will reveal the best numbers for the elevation, azimuth and polarity. Then, use those numbers to set up the correct angles on the mounting bracket and antenna. If you are using the flat panel antenna like the one in this guide, then you will want to make sure your selected satellite has the green check mark, like the Galaxy 18 for example.
You can also download the Satellite Pointer app for iOS or Android to utilize an augmented reality tool to help get all of your angles right. With this app, you can find the satellite you want to point your antenna at by scanning the sky around you. Then, you will be given the best azimuth and elevation to use when you align the cross-hair pointer on screen with the satellite you want to connect with. You can also find the best polarity to use by selecting the appropriate satellite from the list option and scrolling down through the details. It helps too if you allow the app access to your location, or you can also enter the location manually.
Make sure to notate the ideal pointer angles. You will need to carefully set up your mounting bracket based on these angles as described in the next section; otherwise you may not receive good reception from the satellite.
Also, you can follow the @BlockstreamHelp Twitter account to stay up to date with scheduled satellite maintenance that may briefly interrupt service. The announcements will look like this:
The antenna is shipped in an inconspicuous box that has no mention of Blockstream or Bitcoin on it. The label on the outside of the box merely indicates that there is a flat panel antenna inside, which is commonly used for internet reception and televisions, among other things. You can view the complete manual here.
Upon opening the box, you will find that it contains the antenna, the Ethernet power supply, literature, mounting brackets for multiple applications, a compass, hardware and a flat wrench.
Be careful while handling the antenna; try not to scratch the surface or drop it. Also do not apply any paint, stickers or anything else to the face of the unit. The back of the unit has the legacy-style coax cable connections and the Ethernet connection.
In this guide, I will be demonstrating the Ethernet connection. The advantage here is that the satellite signal is being converted into a digital signal internally and I do not need additional outboard hardware with this antenna.
There are a few different mounting options, such as window mounting, railing mounting and surface mounting. The right choice for you will depend on your unique situation. For me, I had an old DirecTV satellite dish installed on my house, so I decided to use the existing stand for it and I went with the railing mounting hardware in the kit.
After removing the old satellite dish, I mocked up the mounting bracket with the hardware to make sure I had everything I needed before going back up onto the roof.
Next, I installed the bare mounting bracket onto the existing mounting pole on the roof, leaving the satellite safe on the ground.
After I had the new mounting bracket installed and only fastened hand-tight, then I mounted the satellite antenna onto the mounting bracket.
Now that everything is in place and still only hand-tight, the pointing angles all need to be roughly set, these angles will be fine-tuned once it’s powered up. Based on the geographic location example using the Denver Federal Reserve bank, the best pointing angles for the antenna are going to be:
Geometry is not my strong suit, but here is my best explanation: This graphic helps illustrate the three-dimensional planes. The vertical XZ plane defines elevation, the flat XY plane defines azimuth and the horizontal YZ plane defines polarity.
Elevation is the vertical degrees of X from Z, with Z being 0.
Azimuth is degrees on the XY plane of Y from X, with X being equal to north. With my antenna, I set the main mounting bracket roughly correct and then used the smaller adjustment to fine tune the setting:
Polarity is the horizontal degrees of Z from Y, with Y being equal to 0.
The notches on the mounting hardware will only get you so far. To get as accurate as I could, I used the Satellite Pointer app to provide the angles while my mobile phone was physically placed on the antenna. Since the Satellite Pointer app doesn’t display real-time polarity, I used the Level Tool app on my mobile device for this. Also, to assist with the azimuth reading, I used the Compass app on my mobile device. As each angle was as accurate as I could get it, I would tighten down the hardware with the included flat wrench.
With the antenna installed and the pointer angles roughly set, all that is left for the installation piece is to run the Ethernet cable. About a year ago I ran a new coax cable from this satellite dish to my office in the basement on the other side of the house. Due to stocking levels at Blockstream, Lightning Network payment routing issues on my end and getting busy with other projects, I never did end up ordering the Satellite Kit despite running the cabling for it. I’m glad that I waited though, because the flat panel antenna has a built in LNB and internal satellite signal converter. Running a new Ethernet cable from the new antenna to my office was a worthwhile chore, since I did not want to use the legacy signal and buy an additional piece of hardware to convert it.
If you are not comfortable installing your own cable, then call a licensed professional. Depending on your installation, you may need to terminate your own cables, drill holes in your walls, and crawl inside your attic.
I went to a hardware store and bought 100 feet of outdoor-rated CAT5e Ethernet cable, a box of RJ45 connectors and the crimping tool.
Then, you need to decide which standard you want to use for your Ethernet cable. I couldn’t find the standard used for the SelfSat>IP22 antenna but considering it is new, I made a safe assumption that it was the T568B configuration. So long as you terminate both ends of the cable with the same configuration, I don’t think it really matters how the device’s internal configuration is set up. All of the wires are the same color on the inside, after all.
There are some good guides online for making your own Ethernet cables, such as this one. I won’t go into the full details here on how to terminate your Ethernet cables, since there are so many good videos and guides online. But just a few things I do want to point out: Make sure your wire color order is the same on both ends. Make sure the wires go all the way to the end of the RJ45 connector. And make sure there is some of the insulated outer jacket where the pinch point clamps down on the cable in the RJ45 connector.
Before terminating the end of your Ethernet cable that gets plugged into the antenna, make sure you slip the cord-grip connector over the cable so that once you do have the end terminated, you can still plug it in and tighten down the cord-grip to keep and weather out of the connection.
Next, I used some zip ties to run the cable down along the side of my house and then drilled an inconspicuous hole to pass the cable through to the attic. Then, I crawled inside the attic and ran the cable along the length of the house to the opposite side and then down through the interior wall and then through the floor into the basement where I terminated the other end of the cable in my office. If you are uncomfortable with crawling into confined spaces to do this type of work, then I would recommend contacting a professional installer.
With the cable installed, simply plug it into the Power over Ethernet (PoE) adaptor, making sure that the cable connected to the antenna is in the correct port and that the other port is connected to your Raspberry Pi.
Raspberry Pi OS Image
There are three main steps covered in this section:
Installing a Raspberry Pi Image
Installing the Blockstream Satellite command-line interface (CLI)
Installing the Bitcoin Satellite application, which is a fork of Bitcoin Core with the added capabilities to receive Bitcoin network data from satellites
First, the Raspberry Pi needs an Operating System (OS). To achieve this, the OS image will be downloaded and then flashed to the 32 GB microSD card that came in the CanaKit. Navigate to this website and select the image you want, I recommend downloading the latest available ARM 64 image; you may need to navigate back up the parent directory to get to the latest images. I chose the “2021-05-07-raspios-buster-arm64.zip.” Then, you also want to download the SHA-256 file, as well as the signature file as shown here:
You will also need the Raspberry Pi imager executable file to flash the OS image onto the microSD card. The imager application can be downloaded from here. Unfortunately, I wasn’t able to find any PGP verification tools for the imager executable file.
Save all of the files in the same folder. It is important to verify the software that you can. This is why the SHA-256 file and the signature file were also downloaded in addition to the OS image. I’ll show you how to use a PGP signature and a hash value to cryptographically verify the integrity of the OS image you just downloaded before installing it on your Raspberry Pi. For this, I will be using the Kleopatra key manager.
First, import the Raspberry Pi public PGP key into your key manager and then certify it. The PGP key can be downloaded here:
Then, simply right click on the signature file, select “More GpgEX options” and then select “Verify.”
The software will run for a moment and it should return a green verified dialog. Now, you know the downloaded .ZIP file is verified with the Raspberry Pi signature.
Now, you can run a SHA-256 hashing algorithm on the .ZIP file and compare that to the hash value in the downloaded hash file. I like to use a hex editing program called HxD for calculating hash values. Always be sure to get the latest hash files from the same archive you downloaded the image file.
Now that everything is verified, you can delete the SHA-256 hash file and the signature file from that folder, so the only items left are the imager executable file and the .ZIP file. Leave the .ZIP file compressed, the imager executable will take care of decompressing it. Load the microSD card in the USB adaptor and make sure that is available for your computer to communicate with it. Then double click on the imager executable file and the flashing process should start.
The microSD card that comes with the CanaKit already has an image loaded on it. But there is a preference to use the downloaded image in this case. Simply formatting the microSD card is only going to clear out the data in the available disk volume, just to be sure there are no hidden partitions, I’ll do this with the Disk Manager instead. Open the Computer Manager by right clicking on “This PC” from a file explorer. Then navigate to the Disk Manager and then right click on the disk volume in question and select “delete volume.” A warning will pop up indicating that this will delete all the data, select “yes.”
Next, right click on the unallocated volume and select “start new volume.” Then, follow the prompts in the wizard, leaving all of the default settings as they are. Formatting for FAT32 is fine.
Navigate back to the folder containing only the .ZIP file and the imager executable, and double click on the executable. Then, follow the prompts to install it and then run it. If everything went according to plan, you should be looking at this screen:
Select “Choose OS” then scroll down to “Use Custom” and then navigate to your .ZIP file:
Select “Choose Storage” and then select your microSD card. Then click on “Write” and select “Yes” to the warning that all data will be erased.
Then the writing and verification processes will start. This should take approximately ten minutes. When it is finished, you should receive the success notification.
Once you hit “Continue,” it will eject the microSD card from the computer. However, a blank Secure Shell (SSH) file needs to be written to the root directory of the microSD card so that it can be connected to remotely. Upon reinserting the microSD card, your computer may tell you that the microSD card needs to be reformatted. Do not reformat it, just select “cancel.”
Using the file explorer, navigate to the root folder on the microSd card, it is probably called “boot.” Then, simply right click in that folder and select “new,” then “text document.” Then, just name it “ssh” without any file extension. You should receive a dialog warning you about changing file extensions, just select “yes.”
That’s it, you’re done flashing the Raspberry Pi image, you can eject the microSd card. Insert the microSD card into the Raspberry Pi microSD card port, not into the USB port using the adaptor, but on the opposite side of the circuit board from the USB ports, there is a microSD card port. Then, connect an Ethernet cable to your router or switch, and the power cable.
Now you are ready to turn on the Raspberry Pi and next I’ll show you how to remote in via SSH connection and install the Blockstream Satellite command-line interface (CLI) tool.
Do not connect your SSD yet.
In this step, you will see how to make the SSH connection from your desktop computer to your Raspberry Pi computer. Once this connection is established, you will then build the OS Image, install the Blockstream Satellite CLI, and compile the Bitcoin Satellite application.
I recommend using a simple SSH tool like Putty.exe. Learn more about Putty here and download it here. Verify the download, then run the .MSI file and follow the install wizard prompts.
Once you run Putty, you will need to enter the IP address of your Raspberry Pi. To find this, log into your home router from a web browser, usually by simply entering 192.168.0.1 in the URL dialog box. Most routers have basic log in credentials like Admin/1234, check online for your brand of router and login instructions.
Once logged into your router, you should be able to locate a list of connected devices on your home network. For example, the connected devices on my home network and their IP address can be viewed from navigating to: “Basic Router” to “DHCP.”
Then in Putty, in the Host Name dialog box, enter your user, which will be “pi” the “@” symbol followed by your RaspberryPi IP local address. For example, all together, mine was: “email@example.com” and then select “Open” at the bottom.
A terminal window will automatically open on your desktop, then you may get a warning about the host key not being registered. Select “Yes” to add this key to your registry.
Then, you will be asked for the password: “raspberry.”
Then, you should be ready to continue when you see this screen:
Configuring The SSD
Here is how I configured my SSD. There might be better and/or more efficient ways to do this, but here are the steps I took:
$sudo apt update;
$sudo apt upgrade -y;
A script will run for a few moments and then run the following commands:
$sudo apt install git -y;
$sudo apt install htop -y;
$sudo apt install curl -y;
$sudo apt install bash-completion -y;
$sudo apt install jq -y;
$sudo apt install qrencode -y;
$sudo apt install dphys-swapfile -y;
$sudo apt install hdparm -y;
Now, there are a few things that need to done in order to set up the SSD such as formatting it, mounting it, and setting the permissions:
$sudo dmesg -C;
$sudo dmesg -w;
Now, connect your external drive. Make note of “idVendor” and “idProduct.” For example, “idVendor = 1058” and “idProduct = 0748”
Where the “UUID” is what you copied from above. Hit “control” and “x,” “y” for yes, and then “enter” on your keyboard to save.
$sudo mkdir -p /mnt/ext;
$sudo mount -a;
$df -h /mnt/ext;
It should return something like:
Filesystem Size Used Avail Use% Mounted On
#/dev/sda 916G 77M 870G 1% /mnt/ext
Set the owner:
$sudo chown -R pi:pi /mnt/ext/;
$sudo mkdir -p .bitcoin;
If “owner” and “group” for the new bitcoin folder are “root” and “root,” then run:
$sudo chown -R pi:pi /mnt/ext/.bitcoin;
The bitcoin folder should now be owned by pi.
Edit swap file:
$sudo nano /etc/dphys-swapfile;
Scroll down to “CONF_SWAPSIZE=100” and put a (#) hashtag in front of it. Hit “control” and “x,” “y” for yes, and then “enter” on your keyboard to save.
$sudo dphys-swapfile install;
Install BlockSat CLI
$sudo apt update;
$sudo pip3 install blocksat-cli;
$blocksat-cli deps install –btc;
$blocksat-cli btc -d /mnt/ext/.bitcoin;
Enter “y” for yes to save the bitcoin.conf file to your bitcoin directory on your SSD.
Configure BlockSat CLI
After that runs for a moment, run the following command and launch the configuration dialog. The terminal will ask you if you want to run the configuration file now, select “y” for yes.
First, you will select the appropriate satellite for your location and then the model of receiver you have. For example, option “0” for Galaxy 18, followed by option “3” for the Base Station receiver.
Next run this command:
Following the instructions, now you can connect the Ethernet cable coming from the satellite to the PoE adapter. Then, plug the other Ethernet port into your router or switch. And then plug the PoE adapter into power. Ensure you have the Ethernet cables connected to the right ports, otherwise you can cause damage to your hardware.
When that is connected and powered on, hit “enter” on the terminal window and then you will receive instructions giving you a couple commands you can run once you get back to the main terminal window to complete the configuration.
This means that you are ready to run this terminal on your laptop and monitor the values to make the fine tuning alignment adjustments on the satellite receiver.
Dialing In The Antenna Pointing Angles
With your laptop in hand and a connection to your antenna, you can start dialing in the exact angles on your receiver. This is the most time-consuming part of this entire project. Make sure you attempt this when you have plenty of time and are not in a rush. Ensure that you do this on a day when you have a clear, unobstructed view of the sky, preferably with no clouds, smoke or smog in the air.
My basic approach was to loosen the bolts for the azimuth adjustments and then slowly move the antenna side to side ever so slightly, like half a degree at a time. Then, I would wait a few seconds to see if the readings in the terminal window changed to “Lock = True.” If not, then I would move the antenna half of a degree and wait again.
I repeated this process again and again and again. Sweeping from center to one side, then starting back at center and sweeping the other side. When I couldn’t get a locked signal, then I would loosen the elevation adjusting bolts, adjust the elevation angle by half a degree, and lock the elevation adjusting bolts back down. Then, I would start sweeping the azimuth again.
I repeated this process several times over the course of several days. The windows of opportunity to try this were few and far between because of all the wildfire smoke in the air where I lived during this time. My attempts were spread out over several weeks. But finally, during a clear evening around sunset, I got my terminal to print “Lock = True.”
Once you achieve “Lock = True,” make sure to tighten down all the hardware. The connection should remain locked. Also, keep an eye on the signal quality. If you are not getting 100% quality in clear sky conditions, try adjusting the polarity to dial this in. Be careful not to lose your locked signal.
Running Bitcoin Satellite
With your signal locked, you are now ready to start downloading the Bitcoin blockchain data. You can either use your internet connection to facilitate a quicker Initial Blockchain Download (IBD). Or, if you want to strictly download Bitcoin blocks from the satellite connection and not use any internet connection, you can run bitcoind with the “connect=0” flag. Be aware that if you are doing this for your IBD, this will take approximately 40 days.
You’re going to have three terminal windows open during this part.
1. In the first terminal window you need to have the blocksat-cli running:
“Lock” should “= True” and “Quality” should be as close to 100% as possible.
2. In the second window, you can run Bitcoin Satellite. You want to run this from the directory where you created the /.bitcoin folder on your SSD:
Now you can just let the IBD run. Remember that this will take roughly a month or longer, so check on it often and make sure to address any issues if they happen.
After I get the blockchain synchronized, I plan on setting this up so that my other Bitcoin nodes will continue receiving blockchain data from my satellite node over my local network during an internet outage. But because I’m strictly downloading from satellite signal, this will take roughly a month or longer to get a full sync. That is why I think this is a good stopping point for this guide and I will follow up with shorter guides on useful things you can do with a satellite-connected receiving node.
Having a Bitcoin node configured to receive blockchain data over satellite connection is a censorship-resistant tool that can help mitigate government-enforced internet shutdown like we have been seen in Myanmar recently. Even though the current satellite node configuration only allows for receiving blockchain data and not broadcasting transactions back to the network yet, this can still be a valuable tool to facilitate keeping other internet-connected nodes up to date during times of internet outages, so that when internet communications are back online, valuable time is not wasted syncing.
As this technology continues to develop and get into the hands of those who need it, development of application use cases will grow.
Thanks for reading! I hope that this article helped you get your own Bitcoin Satellite node up and running. Whether you are using a Blockstream satellite kit or sourcing the materials from other places, this is a powerful censorship-resistant tool that helps strengthen the Bitcoin network and helps transfer power from the hands of the few to the hands of the many.
This is a guest post by Econoalchemist. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
Blockchain infrastructure developer Blockstream has partnered with Macquarie Group, an Australian multinational investment bank, to launch a new pilot for a Bitcoin (BTC) mining facility with a mandate of exploring carbon-neutral alternatives.
As part of the pilot project, Macquarie is investing in one of Blockstream’s enterprise-grade mining facilities, the companies announced Wednesday. This will allow Macquire to uncover new opportunities in renewable energy that can be bootstrapped for more sustainable Bitcoin mining initiatives.
Macquarie Group is one of the largest institutional investors in renewable energy infrastructure, with 44 gigawatts of generation under development or construction as of March 31, 2021.
Blockstream has broadened its ambitions in the Bitcoin mining industry after successfully raising $210 million in Series B financing. In addition to the successful fundraiser, the company disclosed that it had acquired the intellectual property of Spondoolies, a Bitcoin mining hardware manufacturer. As a result, the core team at Spondoolies joined Blockstream’s newly developed ASIC unit.
As Cointelegraph reported in June, Blockstream’s increasing focus on Bitcoin mining attracted a sizable investment from Twitter CEO Jack Dorsey, who committed $5 million towards a solar-powered mining facility.
Related:Crypto mining needs to be redefined before simply casting it away
Bitcoin mining received considerable mainstream attention this year after Tesla CEO Elon Musk seemingly disavowed the cryptocurrency over concerns that its network was environmentally unsustainable. A public debate about renewably sourced Bitcoin soon emerged, with industry champion Michael Saylor convening an industry group composed of BTC miners. Musk appears to have softened his stance on miners’ negative environmental impact, going as far as confirming that SpaceX, another company he owns, also has Bitcoin on its books.
Hashrate on the Bitcoin network appears to be growing again after the industry suffered a major disruption at the hands of China, which effectively banned BTC miners earlier this year.
Blockstream and Macquarie collaborate to explore carbon-neutral alternatives for their joint investment in bitcoin mining.
Bitcoin infrastructure company Blockstream and financial group Macquarie will be partnering to pilot a Bitcoin mining facility and explore alternative carbon-neutral energy sources to power such operations. The partnership, announced in a press release sent to Bitcoin Magazine today, will join together Blockstream’s enterprise-grade bitcoin mining facilities with Macquarie’s knowledge in energy to achieve environmentally sustainable Bitcoin mining solutions.
“Macquarie’s experience and scale in traditional infrastructure investment, as well as commodity and energy markets, and Blockstream’s position as a leading Bitcoin miner and provider of Bitcoin-based technology solutions offers terrific potential,” said Dr. Adam Back, Blockstream CEO.
This initiative builds upon many of Blockstream’s previous building-block developments in the bitcoin mining ecosystem. The company, which operates mining and hosting facilities in Quebec, Canada, and Georgia, announced Blockstream Energy in August, a new service that allows renewable energy producers to increase energy production efficiency and sell surplus energy. The company also recently launched its new ASICs manufacturing arm in a merger with mining hardware manufacturing company Spondoolies.
Blockstream’s previous leap into researching and creating a 100% renewable energy bitcoin mine at scale saw its inception in a partnership with financial services company Square. Square would invest $5 million in the arrangement, and Blockstream would provide bitcoin mining infrastructure and management experience.
By collaborating with Macquarie, Blockstream expects to develop renewable power infrastructure to fulfill its vision of scaling this initiative to new sites in the future. The first pilot project with Macquarie will allow Blockstream’s experience in bitcoin mining and mining hardware hosting to leverage the financial group’s investments and expertise in energy to research and explore alternative solutions to make renewable bitcoin mining at scale viable.
Macquarie is a leading investor in renewable energy infrastructure, which, as of March 31, had $428.3 billion of assets under management and 44 gigawatts (GW) of generation under development, according to the release. The firm provides asset management, finance, banking, advisory, and risk and capital solutions across debt, equity, and commodities.
Adding to a list of offerings that touches nearly every aspect of the industry, Bitcoin infrastructure company Blockstream is now planning to launch the “world’s first enterprise-class miner” in 2022. And, in addition to this being a massive challenge in and of itself, Blockstream hopes to improve the efficiency of mining rigs, meet major industry demand and increase the decentralization of the mining space in the process.
Acquiring Spondoolies, Innovating ASICs
In a “friendly merger” with mining hardware manufacturing company Spondoolies, Blockstream is launching its new ASICs manufacturing arm and adding to an already diverse suite of products and services, including mining and hosting (in Quebec, Canada and Georgia), energy efficiency development (through Blockstream Energy), a settlement sidechain project (the Liquid Network), investment products (through Blockstream Finance), as well as the Blockstream Satellite.
For this latest line, Blockstream has acquired both Spondoolies’ intellectual property (IP) and its core team in order to build up its new mining hardware arm. Spondoolies CEO Assaf Gilboa is coming on board as the head of Blockstream’s new ASIC division.
According to a recent announcement, since its founding in 2013, the Spondoolies team has designed and built five different mining products and was one of the first teams in the bitcoin mining industry to deliver energy-efficient, high-performance mining hardware.
“Many consider Spondoolies’ system design, and improved rack-mount, form-factor miners to be the best designed and highest build-quality miner series taken to market to date,” Blockstream CEO Dr. Adam Back told Bitcoin Magazine.
And while Dr. Back doesn’t see much room for major improvement in ASIC performance, he does see room for refinement — particularly in the size of the chips these rigs use.
“Hash functions like SHA256 are designed to be hard to find computational shortcuts, so it is likely there is limited room left for further algorithm optimization in bitcoin proof of work,” he told us. “As ASIC technology advances from 7 nanometers (nm) to 5 nm and, in the future, 3 nm chips, power consumption and therefore the efficiency of miners improves over time.”
ASIC Size Matters
Driving this efficiency forward would be an achievement very much in demand by the bitcoin mining market.
In its most recent newsletter, Bitcoin mining company Luxor Technologies noted that as the hash rate starts to climb back up following a crackdown in China, miners are looking for infrastructure space as much or more than they seek mining equipment.
“As more S19s and other new gen rigs enter the North American market, industrial-scale farms are swapping out older hardware for newer hardware wherever they can,” according to the newsletter. “Rack space is scarce, so it makes more sense economically to fill shelves with more efficient machines which can produce more hash rate while consuming less energy (one S19, for e.g., has the same output of eight S9s and is roughly three times as power efficient).”
Compass Mining also noted a trend toward more compact, efficient machines.
“Although prices haven’t fully recovered from the market’s drop in April and May, aggregate prices for ASICs on secondary markets have rebounded significantly in July and August,” wrote Compass’s Zack Voell. “Machines with efficiency under 38 joules per terahash (J/TH) are selling in the mid-to-upper $80 per terahash range. Machines with efficiency between 38 J/TH and 65 J/TH are back above $60 per TH.”
These trends can only bode well for Blockstream’s new venture.
Going Forward, Toward Decentralization
The pressure is on Blockstream to produce and market bitcoin ASICs before the end of next year, but Dr. Back is confident they have made the right decision teaming up with Spondoolies.
“Blockstream joining forces with Spondoolies makes a lot of business sense, and combines Blockstream’s protocol and cryptographic algorithm expertise and enterprise hosting and mining operations with spondoolies best-of-breed miner systems design and manufacturing capabilities,” said Dr. Back.
As far as a marketing strategy, Blockstream will stress the importance of decentralizing the supply chain out of China, and establishing a toehold in North America (as of early 2020, 73% of ASIC manufacturing took place in China).
“One differentiator for Blockstream miners is a more international design and assembly, adding supply chain diversification and a North American supplier,” Dr. Back explained. “For the short term, miners are in short supply so we, like other mining companies, have to allocate miners strategically. Longer term, we would like to bring new product lines to sell to other miners and individuals globally and to support Blockstream Mining products like BMN [Blockstream Mining Note] and Blockstream Energy.”
In a recent series B round, Blockstream raised $210 million. The financing, backed by U.K-based private equity firm Baillie Gifford and Hong Kong-based iFinex, which runs the cryptocurrency exchange Bitfinex, gave Blockstream a $3.2 billion valuation.
Though this valuation and the consistent growth of Blockstream seem to set the stage for a public listing, for now, Dr. Back plans to keep innovating as the CEO of a private company.
“Our capitalization with the B round is higher than some public market crypto sector companies,” he said. “We may at a future time consider a public listing, but for the moment we have the flexibility and agility afforded by operating as a private company and ample funding to accelerate growth.”
Blockstream’s $210 million raise will play a big role in North American ASIC production and manufacturing.
The below is from a recent edition of the Deep Dive, Bitcoin Magazine‘s premium markets newsletter. To be among the first to receive these insights and other on-chain bitcoin market analysis straight to your inbox, subscribe now.
As covered yesterday by Bitcoin Magazine’s very own Nik Hoffman, the Bitcoin infrastructure and services company Blockstream has raised $210 million in funding during its most recent seed round, valuing the company at $3.2 billion.
“Some of the money raised will be spent on advancing Blockstream’s bitcoin mining products and services like Blockstream Energy. The new mining infrastructure they are building is planned to be used in many partnerships such as their collaboration with Square, where they are developing a solar-powered mining facility.
The rest of the money will be used to build financial infrastructure with bitcoin-focused financial products and Liquid, which is a sidechain-based settlement network that enables faster, more confidential bitcoin transactions.” –Bitcoin Magazine
Blockstream, which is headquartered in Victoria, Canada, will most definitely play a big role over the coming years in terms of North American ASIC production and manufacturing, which is sorely needed since most semiconductor chip and ASIC manufacturing is currently happening offshore.
In a world where supply chains have never been more backlogged, domestic manufacturing of mining rigs should be considered a matter of national security for the United States. Although Blockstream itself is located in Canada, recently announced partnerships with companies like Square to develop solar-powered mining facilities is critical in the global bitcoin arms race.
The monetization process of bitcoin will only happen once. When looking throughout the history of the network, the BTC one can acquire per hash has only decreased over time in an exponential decay fashion.
Bitcoin infrastructure firm Blockstream is now valued at $3.2 billion after a $210 million Series B raise.
Bitcoin infrastructure firm Blockstream has announced a $210 million Series B financing round led by investment management company Baillie Gifford and iFinex. The raise now puts the company at a $3.2 billion valuation, says a press release sent to Bitcoin Magazine.
Some of the money raised will be spent on advancing Blockstream’s bitcoin mining products and services like Blockstream Energy. The new mining infrastructure they are building is planned to be used in many partnerships such as their collaboration with Square, where they are developing a solar-powered mining facility.
The rest of the money will be used to build financial infrastructure with bitcoin-focused financial products and Liquid, which is a sidechain-based settlement network that enables faster, more confidential bitcoin transactions.
“We have enormous respect for Blockstream’s founders and management team, and we believe its settlement network for bitcoin-based assets and securities has the potential to transform the design and operation of capital markets,” said a Baillie Gifford spokesperson.
Blockstream also acquired the intellectual property of mining hardware manufacturer Spondoolies and announced their core team will be joining Blockstream to build Blockstream’s ASIC arm. Spondoolies has been on the scene since 2013, building out five successful mining products as well as delivering energy-efficient and high-performance mining hardware.
“The Spondoolies team’s pedigree in Bitcoin ASIC design and engineering complements our enterprise-class mining infrastructure, and will accelerate our continuing expansion and decentralization of the Bitcoin mining space,” said Blockstream CEO Dr. Adam Back. “Blockstream is bringing on board the Spondoolies core team and acquiring related intellectual property to launch the world’s first enterprise-class miner next year.”
Canada-based Bitcoin (BTC) infrastructure firm Blockstream, co-founded by cryptographer and cypherpunk Adam Back, has hit unicorn status with its latest valuation at $3.2 billion.
The company, which focuses on various Bitcoin-related areas — including operating as a mining service provider and developing renewables-based infrastructure intended to “green” the veteran cryptocurrency — has raised $210 million in its latest financing round, according to the Canadian newspaper The Globe and Mail.
Blockstream’s new backers, which join existing investors like Twitter CEO Jack Dorsey, are the United Kingdom-based private equity firm Baillie Gifford and Hong Kong-based iFinex, the operator of crypto exchange Bitfinex.
In a statement about the grounds for Blockstream’s $3.2 billion valuation and the fresh capital investment, Baillie Gifford wrote that it has “enormous respect for Blockstream’s founders and management team” and believes that “its settlement network for Bitcoin-based assets and securities has the potential to transform the design and operation of capital markets.”
Blockstream Chief Strategy Officer Samson Mow has reportedly said that the investment will support the company’s further growth and help it to expand its mining operations. The company has recently acquired ASIC maker Spondoolies and, according to Mow, plans to develop its own ASIC miner to use for its own operations and to sell on the retail market “sometime in 2022.”
Related: Unicorns in crypto: A growing herd of billion-dollar crypto companies
Mow also disclosed that Blockstream aims to raise more capital in the coming months to expand its various initiatives. These have to date included the Blockstream Satellite network, which broadcasts the Bitcoin blockchain worldwide 24/7 and the launch of a service called Blockstream Energy, which allows energy producers to sell surplus electricity to proof-of-work miners.
In March of this year, Blockstream announced the launch of a security token backed by the company’s mining operations, intended to serve as a more flexible alternative to investing in Bitcoin mining stocks or physical mining infrastructure.
Blockstream has announced Blockstream Energy, a new service that allows energy producers to maximize energy production efficiency and sell surplus electricity.
Today, August 17, 2021, Blockstream announced their latest service, Blockstream Energy, which offers scalable energy demand to energy producers using Bitcoin’s proof of work (PoW), in a press release sent to Bitcoin Magazine.
This new service utilizes these self-contained and remotely operated mining facilities called modular mining units (MMUs) as featured in the picture above, which allows energy producers to maximize energy production efficiency and sell surplus electricity.
These plug-and-play MMUs are to be deployed at energy production facilities which allow for scalable and dynamically adjustable energy demand. MMUs can be very beneficial by playing multiple different roles such as optimizing energy utilization, balancing electric grids and improving carbon trading strategies. And because of their ISO-compliant dimensions, these units can ship around the world and between energy production sites with ease.
“For the first time, energy producers can control and scale demand to meet their supply. This incredibly powerful tool can be used to make existing electrical grids far more efficient while also significantly improving the economics of renewable energy projects,” explained Chris Cook, CIO and head of mining at Blockstream. “Looking ahead, we are very excited to leverage Bitcoin technology to accelerate renewables and anticipate this market to grow and remain coupled.”
Something that really makes this service unique is that you can access your MMU from anywhere in the world via the Blockstream satellite network. Since this service operates in even the most remote places on the planet, this brings new opportunities from previously unviable hydro and solar hotspots, in addition to any excess energy at sites isolated from civilian or commercial power infrastructure.
“Much of the world’s usable renewable sources are concentrated in remote locations where there is little local demand and not much surrounding infrastructure,” said Adam Back, CEO at Blockstream. “By combining Blockstream Energy with our network of satellites, these energy hotspots can be tapped into. We look forward to working with partners to identify some of these areas where stranded energy can be utilized for Bitcoin mining to further incentivize investment in renewables.”
This is one of the many announcements coming from Blockstream that aims to pursue alternative energy solutions, which includes a $5 million solar mine with Jack Dorsey’s Square as well as a partnership with energy infrastructure multinational Aker. All the above perfectly demonstrates how renewable energy can and will help drive clean Bitcoin energy adoption.
Two hands-on hardware wallet developers discuss bitcoin custody and its technicalities
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In this episode of “The Van Wirdum Sjorsnado,” Aaron van Wirdum conducted one more interview without his regular co-host Sjors Provoost. Instead, he was joined by Blockstream’s Lawrence Nahum, one of the developers behind the Jade wallet; and Ben Kaufman, one of the developers of the Specter wallet, which is specifically designed to work with hardware wallets.
Van Wirdum, Nahum and Kaufman talked about what hardware wallets are, and discussed the design tradeoffs that different hardware wallets have taken by focusing on — the Trezor, Ledger and Coldcard specifically. In this light, Nahum and Kaufman explained what secure elements and secure chips are, and why some hardware wallets choose to rely on using such chips more than others.
Then, Nahum explained which tradeoffs the Jade wallet makes. He also detailed how an additional server-based security step is used to further secure the Jade wallet, and he briefly outlined some additional differences in hardware wallet designs, for example those focused on usability.
Finally, van Wirdum, Nahum and Kaufman discussed whether the concept of hardware wallets are a good idea in the first place, or if it would perhaps be better to use dedicated smartphones to store your bitcoin.