Author

I am Joannes Vermorel, founder at Lokad. I am also an engineer from the Corps des Mines who initially graduated from the ENS.

I have been passionate about computer science, software matters and data mining for almost two decades. (RSS - ATOM)

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Wednesday
Jan242018

## Fast 1D convolution with AVX

Convolutions are important in a variety of fields. For example, in deep learning, convolutional layers represent a critical building block for most signal processing: image, sound or both. My company Lokad is also extensively using convolutions as part of its own algebra of distribution.

One technical problem associated to convolutions is that they are slow. The theory tells you that FFT can be used to obtain good asymptotic performance, but FFT isn't typically an option when your signal has only a few dozen data points; but that you still need to process tens of millions of such signals.

It is possible to speed-up convolutions with a GPU, but my latest experients also tells me that a massive speed-up can already be achieved with CPUs as well, by leveraging their now widespread vector instructions. This idea isn't new, and I was inspired by an original post of Henry Gomersall on the very same topic.

I have just released my own fast 1D convolution in C++ which differs substantially from the original one posted by Henry Gomersall. More specifically:

• This implementation works with AVX (rather than SSE), for further performance boost.
• The approach can canonically be upgraded to AVX2 (or even larger vector instruction).
• It delivers full convolutions rather than exact ones (NumPy terminology).

Compared to the naive C#/.NET implementation of convolution - which was my starting point - this implementation delivers a rough 20x speed-up; but it comes at the cost of doing PInvoke from C#/.NET.

Sidenote for .NET enthusiats: AVX intrinsics are coming to .NET. It will soon be possible to write such ultra-optimized code directly from C#/.NET.

Tuesday
Dec262017

## Mankind needs fractional satoshis

Update: Dr Craig Wright is pointing out that payment channels are a viable alternative to fractional satoshis. I am not an expert in payment channels, but it would certainly largely help in mitigating the problem discussed below. Then, choosing between on-chain scaling and payment channels boils down in establishing the actual limits of on-chain scaling.

Bitcoin Cash aims at becoming the world currency. As discussed previously, terabyte blocks are needed to achieve this goal. However, the Bitcoin Cash protocol also needs a few changes as well. In this post, I will demonstrate why fractional satoshis are needed for Bitcoin Cash.

In the following, for the sake of concision, Bitcoin always refers to Bitcoin Cash.

## Overview of the issue

A satoshi is, presently, the smallest unit of payment that can be sent across the Bitcoin network. There are 100 million satoshis in 1 bitcoin. In particular, the smallest non-zero transaction fee that can be paid is 1 satoshi. Non-zero transaction fees are desirable in order to eliminate spam; however, the original intent behind Bitcoin is clearly to keep those fees vanishingly small as far humans are concerned.

At mankind scale, let’s assume that we have 10 billion humans, and that every human wants to do 50 transactions a day. This might seem a bit high - after all, mankind won’t reach 10 billion humans before 2050, however, good engineering implies safety margins and thinking ahead. I firmly believe that Bitcoin must be engineered to support 10 billion humans and 50 transactions per day per human.

Let’s further assume that those transactions are secured by paying exactly 1 satoshi per transaction (1). The miners collect 1e10 * 50 * 365 / 1e8 ≈ 1.8 millions BCH per year. This amount is huge, about 10% of the total BCH that will ever be in existence (2).

Bitcoin Cash needs to be designed in such a fashion that it is possible for mankind to spend less than 0.001% of its whole monetary supply per year in order to transact freely. Over the lifetime of a human, 100 years, the total transaction fees would remain below 0.1% her or his average monetary capital, which feels about right.

Practical example: let’s assume that my average monetary capital is 100,000€ (just counting cash, not any other asset classes). Over the course of my 100 year’s lifetime, I will pay 0.1% of this amount to cover all my transaction fees, that is, 100€. On average, it’s 1€/year, that is, 0.27 cents per day. We are not far of the 1/10th of a cent per day of my previous analysis.

As such, the current Bitcoin protocol is not tenable at mankind scale. Satoshis are too large, mankind needs fractional satoshis.

## 14-bit left shift

The Bitcoin transactions are encoded with 64-bits integers. This choice, made back in 2009, remains sound. For the foreseeable future, all CPUs will be 64-bits CPUs. However, the current Bitcoin implementation is wasteful. There are 14 bits that are wasted, as we will see below. Yet, it turns out that those 14 bits are exactly what Bitcoin needs to make transaction fees low enough at mankind scale.

Proposal: 1 bitcoin is redefined as 1,638,400,000,000 naks - nak being the shorthand of Nakamoto - that is 214 nakamoto per satoshi.

Let’s demonstrate why 14 bits makes sense. With 50 bits, it is possible to represent 250 satoshis, that is, about 11 millions BCH. The richest BCH address in existence contains about 400k BCH. It’s unlikely that this address will ever grow 1M BCH, let alone 11M BCH.

Thus, in order to represent even the richest BCH address, the protocol only needs 50 bits. While it may be theoretically possible to accumulate more than 11M BCH on a single address, it’s straightforward to add a rule in the Bitcoin protocol to invalidate any transaction which would try to accumulate more than 11M BCH on a single address, forcing the owner of such a fortune to split her/his fortune over 2 addresses instead.

Now, the protocol is left with 64-50 = 14 bits which are “wasted” if we want to preserve the encoding of transactions inputs and outputs as 64-bits unsigned integers. Re-encoding all amounts in sat as nak only requires a 14-bit shift to the left.

As 214 = 16384, we can revisit our initial back-of-the-envelop calculations with 10 billion humans doing 50 transactions a day. We have 1e10 * 50 * 365 / (16384 * 1e8) = 111.4 BCH paid in fees to the miners per year. This is much better, about 0.0005% of the whole monetary supply paid to the miner per year, that is, 0.05% over the 100 year lifetime of a human.

## A non-urgent yet kind-of-urgent change

Fractional satoshi won’t become a problem until about 1% of mankind starts using Bitcoin to pay for everything. However, every single day that passes, there are more software out there which are dependent on the current instance of the Bitcoin protocol. Thus, the Bitcoin ecosystem is accumulating technical debt.

We know that this debt will have to be paid back. Indeed, as demonstrated above, keeping satoshis as the smallest payment unit is not tenable. We also know that this debt comes with compound interests. At present time, fixing this issue will only incur a modest friction in the ecosystem. 10 years from now, if Bitcoin has any measurable degree of success at being a currency, then, it will be a huge mess. Every single piece of Bitcoin-dependent software will be broken by such a change.

Thus, I call to the Bitcoin developers to coordinate in order to introduce fractional satoshis in their mid-term roadmap.

Will I still own the same amount of BCH? Yes, there is zero impact on your current BCH holding. If you have 1 BCH now, you will still have exactly 1 BCH after the change.

Does it change the upper limit on the number of BCH? Technically yes, but in practice, no. This change would push back the date when mining becomes purely fee-funded by 4*14=52 years; and the total amount of extra BCH which will ever be mined will be less than 0.001 BCH. Hardly noticeable.

## Nitpicking, why not 18 bits?

I do feel strongly that fractional satoshis are needed, and that 14 bits of extra precision is a minimum. However, if someone has a good reason to motivate a shift beyond 14 bits, maybe up to 18 bits, then, this person might be right. The discussion below is merely opinionated. This is not a demonstration.

The richest BCH address hold about 400k BCH. Thus, technically, it is still possible to adjust the protocol to free up to 18 bits, with a hard-cap at 703k BCH for a single BCH address. However, I do see for potential edge cases in the ecosystem of Bitcoin.

If Bitcoin succeeds, then the world will start implementing accounting packages, ERP, POS, CRM …, where assets are valued in Bitcoins, or rather in naks. Most of those software developers will use int64 integers (signed) to track the valuations of those assets. Why? Just because it’s what naturally comes to mind as a developer if you need large signed integers.

As the non-monetary assets are typically valued more than the monetary assets - eg. for most people, their home is worth more than the cash they have at the bank, the same goes for companies - those accounting books may contain values that exceed 10M BCH. Those situations, arguably rare, would trigger bugs known as numeric overflows.

Through a 14-bit shift, naive financial software implementations would still work up to 5M BCH (beware, signed integers, we lose 1 bit of precision), while a 18-bit shift will cap the maximal amount at 350k BCH, that is, 16 times less. While, it’s only a hunch, my take is that this numeric precision of a 14-bit shift would be sufficient to eliminate all int64 numerical overflows in finance calculations even when dealing with the budget of giant corporations. With, a 18-bit shift, edge cases would remain somewhat possible.

(1) Most Bitcoin wallets that exist today do not let you pay 1 satoshi. Instead, the minimal non-zero payable fee is 1 satoshi per byte. However, this behavior only reflects the implementation of the wallet, not a limitation of the Bitcoin protocol itself.

(2) Technically, there is a limit at 21M BCH, however, experts suspect that a few millions BCH are lost forever. Anecdotal evidence: I personally know one person who has irremediably lost about 100 BCH. Thus, those estimates sound right. In any case, even if those coins where not actually lost, it would not fundamentally change the discussion above.

Sunday
Dec172017

## Terabyte blocks for Bitcoin Cash

Terabyte blocks are feasible both technically and economically, they will allow over 50 transactions per human on earth per day for a cost of less than 1/10th of a cent of USD. This analysis assumes no further decrease in hardware costs, and no further software breakthrough, only assembling existing, proven technologies.

## Introduction

As pointed out in the original Bitcoin whitepaper, achieving very large blocks do require taking advantage of Moore's Law rather than being stuck with fixed-capacity device. A terabyte block represents a block of 1e12 bytes, which can contain about 4 billion Bitcoin transactions. Assuming a worldwide population of 10 billion humans, terabyte blocks offer about 50 transactions per human per day (57 actually, but the extra numerical precision is not significant).

50 transactions per day per human appears sufficient to cover all human-driven activities; and only a healthy machine-to-machine market would require an even greater number of transactions. Such a market remains hypothetical at present time, and goes beyond the scope of this post.

Bigger blocks is the go-to plan to make the most of the hashing power invested in the Bitcoin network. Indeed, the hashing power provides the same security no matter if 1MB blocks or 1TB blocks are used, yet in the later case, the each transaction is secured with a million times less energy per transaction.

The on-chain scalability challenge is irrelevant for Bitcoin Core, as blocks are capped at 1MB which ensures no more than half a dozen of transactions per second. However, terabyte blocks are relevant for Bitcoin Cash, which could face about 7 millions transactions per second while producing terabyte blocks. In the following for the sake of concision, the term Bitcoin is always referring to Bitcoin Cash.

The mining rig detailed below, a combination of existing and proven hardware and software technologies, delivers the data processing capacity to process terabyte blocks. The cost associated to this mining rig is also sufficiently low to ensure a healthy decentralized market that includes hundreds of independent miners; arguably a more decentralized market than Bitcoin mining as of today.

For the sake of the scalability analysis, I am excluding the Bitcoin emission revenues, focusing only on the transaction fees and other alternative revenue streams which do not depend on Bitcoin inflation. Naturally, for the next decades, the bulk of the mining revenues are expected to be associated with the emission of Bitcoins rather than transaction fees.

## A terabyte block mining rig

The mining rig includes 256 nodes, where each node includes:

• 1 Intel Xeon Processor E7, 8 cores (USD 1250)
• 2 Intel Xeon Phi 7210, 64 cores (USD 4000)
• 1 Intel Optane 4800X 750GB (USD 3400)
• 2 Samsung 64GB PC4-19200 DDR4 (USD1400)
• 2 WD Red 10TB HDD (USD 750)
• Misc (rack, power, network) (USD 3000)

The prices have been obtained from public sources such as Amazon. Totaling those 256 nodes gives a price point of 3.5M USD. In addition to the nodes, a storage layer of optical storage based on the Freeze-Ray technology of Panasonic. While the pricing point of this technology is not publicly advertized, various sources are quoting 10 USD/TB as the price point for optical storage. This figure also matches the price point of the optical storage cartridges sold by Sony. Then, Facebook, who has deployed the freeze-ray claims a 80% reduction in energy consumption compared to HDDs. As current 10TB HDDs have a typical consumption of 5W when active, the freeze-ray energy consumption should be about 0.1W per TB. I will be using those two estimates in the following.

In order to cover 20 years worth of terablocks, the storage layer would require 553 free-ray rackable units of 1.9PB, which would represent a cost of 11M USD.

Then, the cost of energy should be accounted for. Each node consumes about 700W/h according to the nominal consumption of its parts, which gives about 180kW/h for the 256 nodes. Also with 0.1W per TB, the storage layer consumes an extra 100kW/h. Assuming a kWh at 0.1 USD, the yearly energy consumption cost would be 250k USD, totaling 5M USD over 20 years.

Finally, a 50Gbps internet connection is added for a price of 25,000 USD per month; which totals at 6M USD over 20 years.

The cost for the mining equipment per se, i.e. computing terahashes is voluntarily ignored, because this hardware can be considered as independently funded through the Bitcoin inflation.

Thus, I am considering here a 26M USD investment, to be amortized over 20 years; that is 1.3M USD/year of funding. At this point, it still needs to be proven that (A) the Bitcoin fee market can sustain such an expensive mining rig (B) this mining rig is capable of processing terabyte blocks.

As it does not make sense to build such a rig if the market cannot reasonably fund it, let's start with the financing part.

## Financing terablocks

Assuming 250 bytes per transaction, terabyte blocks would deliver about 55 transactions per human per day, assuming a rough 10 billion humans on earth. The exact count of human is not important, as the cost of the mining rig is essentially linear in the number of transactions, which is also itself essentially linear in the number of humans transacting on the blockchain. If there are less humans using the blockchain, then the mining rig is linearly cheaper.

If we assume that the same 10 billion humans contribute 1/10th of a cent per day to fund the miners through their transaction fees, then the yearly transaction fees would be of 3,65 billion USD. Thus, those yearly transaction fees would cover the amortized cost of over 3650 / 1.3 = 2800 mining rigs. Assuming that miners want to profit beyond the marginal cost of operating a rig, a gross operating margin at 60% would still leave room for over 1000 profitable miners.

Funding a large number of copies of the blockchain is important to ensure a high degree of decentralization. The analysis that has been carried so far shows that minimal transaction fees would be sufficient to fund over a hundred of competing yet very profitable miners. However, our analysis is ignoring all the economic value that can be generated by holding a copy of blockchain data for other purposes than validating transactions.

Let's assume that a wallet app, which display an ad along with Bitcoin balance could earn about 1 USD per 100,000 views for a simple non-intrusive banner. Assuming that the same humans would check their balance once a week on such a service, we are considering a 5 billion USD market just through advertising revenues, which would fund hundreds of additional copies of the blockchain. This single use case does fund by itself hundreds more copies of the terabyte blockchain.

Then, assuming that the upper bound for the monetization of a terabyte blockchain is at 0.5 USD per user per year, is conservative. In 2016, Google is extracting about 7 USD per user per year, while Facebook is extracting about 16 USD per user per year. If Bitcoin reaches 1TB per block, a large portion of the world economy will be running on top of this blockchain offering numerous monetization opportunities.

I fail to see why, collectively, the market would not manage to extract at least 5 USD per user per year on average through blockchain related services. At this point, we are entering the realm of profitably funding a thousand more copies of the terabyte blockchain.

## Scaling the terabyte blockchain

Some data processing problems are intrinsically difficult to spread over multiple computers (like machine learning) or are even designed to prohibitively difficult (like breaking encryption). However, Bitcoin is neither. Bitcoin is an embarrassingly parallel, the easiest and most straightforward kind of problems to be addressed through distributed systems.

The scalability challenges faced by Bitcoin are:

1. Propagating transactions
2. Validating transactions

Let's review each one of those challenges.

### Scaling the transaction propagation

Propagating transactions is the easiest. It merely requires bandwidth. As Bloom filters, or even better filters can be used, the P2P propagation of 1TB worth of transactions needs less than 3 TB of bandwidth per miner every 10 min (assuming that miner resent twice every transaction for fast propagation of the transaction through the network). Indeed, miners transmit the filters first which are vastly more compact, and transfers the actual transactions only when those transactions is actually requested.

A direct calculation gives a minimal requirement of 45 Gbps to operate. The mining rig has 50 Gbps which is sufficient to reach a sustained throughput of 1TB blocks while aggressively relaying transactions.

### Scaling the cryptographic validation

Validating the correctness of a Bitcoin transaction is a two-fold process. First, the cryptographic correctness of the transaction must validated: the miner must verify that the transaction has been properly signed by the sender of the funds. Second, the economic correctness of the transaction must be validated: the miner must verify that the originating address contains enough fund to cover the transaction. In this section, I am focusing on the first part of this challenge, the cryptographic correctness.

Based on [1], I assume a 2ms CPU cost per transaction on a regular 2Ghz x86 CPU. At 250 bytes per transaction, a 1TB block every 10 mins represents 6.7 millions transactions per second. With 2ms of CPU per transaction, we need 13400 CPUs to perform the concurrent validation. The mining rig contains 256 * 2 * 64 = 32768 CPUs through the the Intel Xeon Phi boards. The mining rig is largely sufficient to keep up with the transaction validation. The rig has even spare capacity to catch-up with a delayed validation which could, for example, occur in case of a local network outage. As transactions can be trivially partitioned against a fast hash, achieving a linear scaling of the cryptographic validation is straightforward.

### Scaling the economic validation

As pointed out above, in order to validate a transaction, the miner must also check the balance of the Bitcoin addresses in order to ensure that a transaction does not end-up creating Bitcoins out of thin air. In the present implementation of Bitcoin, this validation is performed through a software component known as the UTXO database, the database of unspent transaction outputs.

Terabyte blocks represent 7 millions transactions per second. An optimized implementation only requires 2 reads and 2 writes per transaction to the persistent UTXO storage:

• First read: check whether the transaction is even legit.
• First write: If the transaction is legit, the address is marked as dirty with the fund removed.
• Second read: If the transaction makes its way into the next block (produced by another miner), another check is performed to recheck correctness.
• Second write: if the foreign block is correct, update the balance of the transaction.

Thus, the miner needs a sustained IOPS throughput of 4*7=28 millions IOPS. As every Intel Optane card offers 550,000 IOPS, the mining rig delivers a collective 140 millions IOPS, largely sufficient to sustain the throughput associated with 1TB blocks. Moreover, the rig has also spare capacity to catch-up after an outage.

Once again, sharding transactions against a fast hash is trivial, thus, implementing a Cassandra-like UTXO database is straightforward. Using Cassandra, Netflix had already done benchmark up to 1 million write / sec back in 2011 while Intel Optane delivers more than 50x the IOPS available back in 2011 through SSDs. Thus, there is no doubt that a specialized database could scale to 28M IOPS and more.

Then, beyond the IOPS, the miner also needs to ensure to have enough storage to store UTXO database. A compact binary encoding of the UTXO database requires:

• 1 byte for flags (up to 8)
• 3 bytes for the block height
• 20 bytes for the Bitcoin address
• 4 bytes for the "clean" amount in Satoshis (*)
• 4 bytes for the "dirty" amount in Satoshis (*)

(*) There are only 21 millions Bitcoins, and each Bitcoin contains only 100 million Satoshis. Thus, the number of Bitcoin addresses that can contain over 4 billions (2^32) Satoshis (40 bitcoins) is limited to 550,000 addresses or so. This number of "super-rich" addresses is very small, and thus would be special cased in order to let the rest of the UTXO database benefit from a more compact encoding. In total, 32 bytes are needed per entry in the UTXO database.

With 256 nodes equipped of 750GB Intel Optane, there is enough storage to store 6e12 hot addresses, that is, 600 addresses per user considering 1e10 humans. Then, the HDDs of the nodes, which provide over 20TB of additional storage could be used to increase to the number of hot addresses to 6000 per human, while keeping more than half of the original storage capacity to spare for other needs.

In practice, both modern HDDs and the Intel Optane are performing 4KB block reads and 4KB writes at the hardware level (beware block reads and block writes should not be confused with the blockchain blocks). Thus, the most efficient strategy when writing would be to read a storage block, which contains 4096/32 = 128 entries and to evict the oldest entry, according to the blockchain block height.

Beyond, those hot addresses, the miner leverages its slower optical storage layer, which contains checkpointed copies of the full UTXO database. As it would take more than 100 days for all users to collectively touch more than their 6000 "hot" addresses, the full snapshots of UTXO database can be done rather infrequently, probably about one per month, the final tuning being dependent on the precise hardware specification.

Updating the UTXO database once a new block is found is also a non-issue. The mining rig has 32TB of RAM available, and this RAM can be used to keep the latest blocks in-memory while those blocks are being gradually written to the UTXO database. In particular, the amount of RAM is sufficient to cover the even rarest situations where a short dozen of blocks end-up being orphaned.

### Scaling the block propagation

Once a miner has found a target hash, there is a strong incentive of quickly broadcasting the corresponding block, otherwise, another miner might win the mining race by broadcasting faster its own alternative block in the mean time. However, by the time a block is found, the bulk of its content, the transactions is already known to the other miners. Thus, the only information that needs to be transferred is a compact filter which points out the exact set of transactions that has been included in the block.

This mechanism is leveraged by Graphene, which reduces the amount of data that needs to be broadcast when a new block is found to a fraction of the original block size. Graphene demonstrates a compression factor of 186, which would bring down a 1TB block to 5.5GB. As the mining rig has a 50Gbps network connection, it will take less than 1 second to transfer the the full payload to a second miner, triggering an exponential cascade of broadcasts. However, it would be inefficient for the receiving miner to wait for the full payload to be received; the cascade of broadcast would usually start from the first "chunk" received. The Graphene payload would be chunked in smaller chunks, of say, 100MB.

Indeed, the economic interest of the miners is to always work on the latest block, thus if a miner claim to have found a new valid block and that the latest, say, 100 claims made by the same miner all proved to be correct, then it would a profitable assumption to put a limited trust into this miner and immediately start the cascade of broadcasts. Breaching this trust would not earn anything to the miner as its peers would still reject the faulty block within a minute. Worse, the bad behaving miner would immediately lose its hard-earned reputation, hence slowing down the propagation of its own future blocks, for tens of blocks, as the other miners would opt for the full prior validation. In practice, such a miner would most likely have to re-earn the trust of its peers by mining dozens of reduced blocks (faster to transmit), forfeiting most of the transaction fees to the benefit of its peers.

Through an early broadcast, and assuming that the Bitcoin network is comprised of miners with similar or superior internet bandwidth, the full broadcast of the 5.5GB to 10,000 miners is straightforward to achieve in 10 seconds or so, assuming that each miner starts propagating the fresh data upon reception of the first chunk, which would happen in less than 200ms no matter the distance between two miners on earth.

## Conclusions

At this point, we have seen that a rig costing 1.3M USD a year in amortized costs is sufficient to support terabyte blocks. However, my hardware and bandwidth costs assumptions are wildly unrealistic. It will take at least 5 years from now for the Bitcoin ecosystem to reach the point where terabyte blocks are needed (onboarding mankind just takes time). Within 5 years from now, the hardware costs will have diminished - a lot.

Since the publication of the original Bitcoin paper 8 years ago, practically every cost quoted in this document have been reduced by a factor greater than 10. The cost of long term data storage is already anticipated to be divided by 3 by 2020. The bandwidth cost is also expected to decrease of 30% per year for the coming years as well.

Then, I am not accounting for any additional software improvements. Flexible Transactions and Schnorr signature could reduce the transaction size by more than 20%. Pruning the blockchain itself could probably halve the amount of storage actually needed.

Thus, within 5 years, it is conservative to assume that the amortized cost will only be 1/3 of my present estimate with a conservative mix of cheaper hardware and more efficient software. At this point, we would be reaching 400k USD/year of a rig capable of processing all the transaction that mankind will ever need (maybe not all the transactions that machines will ever need though, but that's a different scenario altogether).

For the average individual, 400k USD/year may feel like a huge amount of money, yet from a business perspective, this is a modest amount. In Paris, many well-placed boutiques are paying more than that for the rent alone. A small consultancy firm of 50 consultants, still in Paris, does also pay over 400k USD/year for their offices. Opening an IKEA store is considered being a typical 50M USD investment, twice as much as much as the mining rig presently considered. The investment cost associated to a small 10 turbine's wind farm would also exceed the cost of such mining rig.

While it is true that this cost represents an entry barrier, mining has been a highly specialized business with high entry barriers for years already. Impotent miners, nodes who do not mine blocks, do not add security to the network. The only option to decentralize further Bitcoin is not to wish for a downsize of miners, but to organize a massive expansion of the mining pie which will comparatively shrink every miner.

Saturday
Nov112017

## Bitcoin Cash is Bitcoin, a software CEO perspective

TLDR: my company, Lokad, is redirecting its attention to Bitcoin Cash, as the true Bitcoin

Like Jeff Bezos, I also believe that being successful in business depends on being right rather than being smart. Smarter means that you will solve given problems faster and better. Righter means that you will identify better problems. As I had been writing in the past, smarter problems trump smarter solutions. Any single time.

What’s Bitcoin about? The intent is to let anyone send and receive secure money in a way that is almost free and almost instant (check the original paper). Over the last two years, Blockstream, a heavily funded company, has brought “smart” but terribly wrong “improvements” to Bitcoin:

• They have denied the almost free property of Bitcoin by capping the block size.
• They have denied the almost instant property of Bitcoin through RBF (Replace By Fee).
• They have weakened the security of Bitcoin through SegWit (Segregated Witness)

To be fair to the Blockstream team, they can’t claim the full ownership of this mess. They got help from other, smart, but unfortunately equally wrong, people.

Now, the Bitcoin community is not without resources. Reasonable people, including the very first non-anonymous Bitcoin developer, have been pointing in the same direction for years. Thus, last August, the community finally made a stand: Bitcoin Cash.

The only thing that you really need to know about Bitcoin Cash is Bitcoin Cash is Bitcoin. Bitcoin Cash has simply undone the damaging Bitcoin features; and yes, sending money is back being almost free and almost instant. Plus, the whole thing does not rely anymore on insecure shenanigans such as anyone can spend tricks.

For my company Lokad which specializes in supply chain optimization, the blockchain has many promising applications. Naturally, it’s always possible to roll-out your own blockchain, but that somewhat defeats the purpose of having a globally unified ledger. Yet, a ledger limited to 7 transactions per second is unusable. At Lokad, we have clients who are already doing more than that! My company needs a ledger that can process tens of thousands of transactions per second; and this happens to be exactly what Bitcoin Cash is about.

Finally, the biggest hurdle that I see with SegWit Bitcoin (for a lack of better name) is SegWit. From my software engineering perspective, this feature is poison: an over-engineered mess that is going to increasingly hurt as time passes. Having personally rewritten four times the core forecasting engine of my own company, I do claim some experience in recognizing unsustainable engineering mess when I see one: SegWit is one of them. If you really seek to fix malleability (a non-urgent problem btw) then FlexTrans is a much simpler and more secure alternative. Removing SegWit from SegWit Bitcoin feels more unrealistic every passing day.

Thus, Bitcoin Cash remains as the only viable option, which fortunately, happens to be a very good option.

Tuesday
Jun062017

## Details on the .NET first strategy for CNTK

An extensive discussion is taking place on the CNTK project. As I am partly responsible for this discussion, I am gather some more concrete proposals for CNTK.

### Correctness by design and BrainScript

My company, Lokad, has built as complex data-driven analytical solution built on .NET. Because machine learning data pipelines are hellish to debug, we seek technologies to ensure as much design correctness as possible. For example, in many programming language, a certain degree of design correctness can be obtained through strong typing. Some languages like Rust or Closure offer other kind of guarantees.

My immediate interest for BrainScript was not for the language itself, but for the degree of design correctness appears to be enforceable in BrainScript at compile time. For example, a static analysis can tell me the total number of model parameters. For example, based on this number, it would be easy to implement a rule in our continuous integration built that prevent an abusively large training task to ever go in production.

Because of the limited expressivity of BrainScript (a good thing!), many more properties can be enforced at compile time, not even starting CNTK. Compile time is important because the continuous integration server may not have access to all the required data this is required to get CNTK up and running.

Then, BrainScript is only one option to deliver this correctness by design. In .NET/C#, it would be straightforward to implement a tiny API that deliver the sample expressivity of BrainScript. The network definition would then be compiled in .NET just like Expression Trees are compiled (*). BrainScript itself could be through at a human-readable serialization format for a valid expression built through this .NET API.

(*) OK, it's not strictly C# compile time, but in practice if your CNTK-network-description-to-be-compiled is reachable through a unit test, then any failure to compile will be caught through unit tests which is good enough in practice.

In the ticket #1962, I was requesting an extension for BrainScript to be made available for Visual Studio Code because, at the time, I was incorrectly thinking that BrainScript was the core strategy for CNTK. Indeed, BrainScript is still listed as one of the Top 8 reasons to favor CNTK over TensorFlow. Then, as it appears that BrainScript is not the core strategy anymore anyway, then I don't see any particular reason for the CNTK team to invest in the BrainScript tooling. I am completely fine with that, as long as a .NET-friendly alternative is provided which share the good properties of BrainScript.

### Train vs. Eval, production and versioning support

From a machine learning perspective, training is a very distinct operation from evaluation. However, as far software engineering is concerned, the two operations typically live very close. Indeed, it usually one system that collects the data, feed the data to the training logic, collect the model, distribute the model to possibly "clients", and ensure that those "clients" are capable of executing the training logic. In company like Lokad, we have complex data pipelines, and the best way to ensure that the training data are consistent with the evaluation inputs is to factorize the logic - aka have the same bits of code (C# in our case) being used to cover both use cases.

By design this implies that any machine learning toolkit that does not offer a unified support for both training and evaluation is a major friction. It's not only a lot more costly to implement, it's also very error prone, as we need to find alternative ways to ensure that the two implementations (training-side and evaluation-side) are and remain strictly consistent in the way data are feed to the deep learning toolkit on both sides. In particular, this is why Python is so painful for a .NET solution: we not only end-up spreading an alternative stack all over the place, we end-up duplicating implementations.

Then, from v1 to v2, the CNTK changed the serialization format for models. Companies may end-up significant amount of resources invested in training one particular model, thus breaking the serialization format is bad. Yet, in the same time, it would be unreasonable to freeze the model serialization format forever, because it would actually prevent many desirable improvements for CNTK.

Once again, the solution is simply .NET. In C#, implementing complex binary (de)serializer is straightforward; arguably less than 1/10th of the effort compared to C++. Thus, CNTK could adopt an approach where the C++ toolkit only supports one format - the latest; and transfer the burden of maintaining multiple (de)serializers to C#. This approch would also offer the possibility to easily translate models in the "old" formats to the new formats. Moreover, the translation could even be done at runtime in .NET/C# if performance is not concern (it's not always a concern).

### The laundry list for .NET-first CNTK

In this section, I try to briefly cover the most pressing elements for a .NET-first CNTK.

Naked Nugget deployments. Nugget is the de-factor approach to deploy components in the .NET ecosystem. It's already adopted by CNTK for the C# Evaluation bindings but not for the other parts. In particular, deployements should not involve 3rd party stacks like Python (or Node.js or Java).

A network description API in .NET/C#. The important angle is: the API is declarative, and offers the possibility to ensure some degree of correctness by design. The CNTK team is not even expected to provide the tooling to ensure the correctness by design. As long the network description can be reflected in C#, the community can handle that part.

Low-level abstractions for high perf I/O. As posted at #1963, it's important to offer the possibility to efficiently stream data to CNTK. From a .NET/C# perspective, a p/invoke passing around byte arrays is good enough as long as the corresponding binary serializers are provided in .NET/C# as well.

### The non-goals for a .NET-first CNTK

Alternatively, there also non-goals the first version of a .NET-first CNTK.

Fully managed implementation. For a high-performance library like CNTK, a native C++ implementation feels just fine. Many low level parts of .NET are implemented this way, like System.Numerics.

ASP.NET specifics. As long as compatibility is ensured with .NET, compatibility will be ensured for ASP.NET. I don't anything to be done specifically for ASP.NET.

Jupyter notebooks. Jupyter is cool, no question. Yet, the interactive perspective is a very Pythonic way of doing things. While more features is desirable, Jupyter does not strike me as critical. Interative C# has been around for a long time, but there is very little community traction to support it.

Visual designer for networks. Visual design is cool for teaching, but this does not strike me as a high-priority feature for the .NET ecosystem. Again, the tools you need for 2h training sessions are very different from what you need for a mission-critical business system.

Unity specifics. Unity is very cool, but what Unity needs most - as far CNTK is concerned - is a clean .NET integration for CNTK itself. The rest is a bonus.

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