Create first draft of Chapter 15: Setting up a Bitcoin Regtest

15_0_Setting_Up_a_Bitcoin_Regtest.md

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+# Chapter 15: Setting Up a Bitcoin Regtest
+
+While developing Bitcoin applications, you might want to use your applications isolated from any public Blockchain such as the Mainnet or the Testnet.
+You can create a Blockchain from scratch using the Regtest, with one main advantage over Testnet: you choose when to create new blocks, so you have complete control over the environment.
+
+## Objectives for This Chapter
+
+After working through this chapter, a developer will be able to:
+
+   * Create your own Blockchain from scratch
+   * Generate/mine blocks and get the rewards
+   * Get balance and interact with Bitcoind in a private way
+
+## Table of Contents
+
+  * [Section One: Starting the Regtest](15_1_Starting_the_Regtest.md)
+  * [Section Two: Mining with Regtest](15_2_Mining_with_Regtest.md)
+  * [Section Three: Testing with Regtest](15_3_Testing_with_Regtest.md)

15_1_Starting_the_Regtest.md

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+# 15.1: Starting the Regtest
+
+> **NOTE:** This is a draft in progress, so that I can get some feedback from early reviewers. It is not yet ready for learning.
+
+This document explains how to build a Regtest (Regression Test) by hand to be able to develop new applications without the need to interact with other peers and blocks.
+Bitcoin Core’s regression test mode (regtest mode) lets you instantly create a brand-new private block chain with the same basic rules as testnet—but one major difference: you choose when to create new blocks, so you have complete control over the environment.
+
+## Starting Bitcoind on Regtest
+
+After [setting up your Bitcoin-Core VPS](02_0_Setting_Up_a_Bitcoin-Core_VPS.md), you are now able to use Regtest. To start Bitcoind (Bitcoin Daemon) on Regtest and create a private Blockchain, you have to use the following command:
+```
+$ bitcoind -regtest -daemon
+```
+
+## Resetting the Regtest Blockchain
+
+Regtest wallets and block chain state (chainstate) are saved in the regtest subdirectory of the Bitcoin configuration directory:
+```
+user@mybtc:~/.bitcoin# ls
+bitcoin.conf  regtest  testnet3
+```
+
+If you want to start a brand new Blockchain using regtest, all you have to do is delete the `regtest` folder and restart the Bitcoind:
+```
+$ rm -rf regtest
+```
+
+## What's Next?
+
+After starting your bitcoind on regtest, you can now use RPC commands to [generate/mine blocks in your private chain](15_2_Mining_with_Regtest.md).
+This will allow you to get balance in your wallet and [test the Regtest blockchain](15_3_Testing_with_Regtest.md).

15_2_Mining_with_Regtest.md

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+# 15.2: Mining the Regtest
+
+> **NOTE:** This is a draft in progress, so that I can get some feedback from early reviewers. It is not yet ready for learning.
+
+This document explains how to generate (i.e. mine) blocks using a Regtest (Regression Test) blockchain.
+To generate blocks on a new blockchain requires very minimal proof-of-work and it will take less than a second, due to the low difficulty and that it follows the Testnet rules.
+
+
+## Generating blocks
+
+You can generate/mine new blocks using the RPC method `generate`. It only makes sense to use this method on regtest, due to the high difficulty it's very unlikely that it will yield to new blocks in the mainnet or testnet:
+```
+$ bitcoin-cli -regtest generate 101
+[
+  "57f17afccf28b9296048b6370312678b6d8e48dc3a7b4ef7681d18ed3d91c122",
+  "631ff7b8135ce633c774828be3b8505726459eb65c339aab981b10363befe5a7",
+  ...
+  "1162dbfe025c7da94ee1128dc26d518a94508f532c19edc0de6bc673a909d02c",
+  "20cb2e815c3d42d6a117a204a0b5e726ab641c826e441b5b3417aca33f2aba48"
+]
+```
+The output is the block hash of every block generated (in our example, 101 hashes).
+
+
+This command will generate 101 blocks using a special RPC to generate the blocks on your regtest network. Running this command only makes sense on the regtest, if you try to run on the mainnet or testnet, it is very unlikely that it will be able to yield any block. On regtest, this takes less than a second on a generic PC.
+Because this is a new block chain using Bitcoin’s default rules, the first blocks pay a block reward of 50 bitcoins.
+Unlike mainnet, in regtest mode only the first 150 blocks pay a reward of 50 bitcoins. After that, the reward halves after 150 blocks, so it pays 25, 12.5, and so on...
+
+However, a block must have 100 confirmations before that reward can be spent, so we generate 101 blocks to get access to the coinbase transaction from block #1.
+
+
+## What's Next?
+
+After starting your bitcoind on regtest and generating the first blocks, you have balance in your address to spend and [test using Regtest blockchain](15_3_Testing_with_Regtest.md).

15_3_Testing_with_Regtest.md

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+# 15.3: Testing with Regtest
+
+> **NOTE:** This is a draft in progress, so that I can get some feedback from early reviewers. It is not yet ready for learning.
+
+This document explains how to test transactions and situations using regtest (regression test).
+
+
+## Verifying balance
+
+After [mining blocks](15_2_Mining_with_Regtest.md) and getting the rewards, you can verify the balance on your wallet:
+```
+$ bitcoin-cli -regtest getbalance
+50.00000000
+```
+This will print the balance in your wallet.
+
+## Validating the Regtest
+Now you should be able to use this balance for any type of interaction with the private Blockchain, such as sending Bitcoin transactions according to [Chapter 4]((04_0_Sending_Bitcoin_Transactions.md)) in this guide. The only difference is that you need to use the flag `-regtest` when running the `bitcoin-cli` in order for the request to be sent to the Regtest Bitcoin daemon.
+
+It is important to note that for your transactions to complete, you will have to generate/mine new blocks so that the transactions can be included into them.
+
+For example, to create a transaction and include into a block, you should use the `sendtoaddress` command:
+```
+$ bitcoin-cli -regtest sendtoaddress [address] 15.1
+e834a4ac6ef754164c8e3f0be4f34531b74b768199ffb244ab9f6cb1bbc7465a
+```
+
+The output is the transaction hash included in the blockchain. You can verify the details using the `gettransaction`:
+```
+$ bitcoin-cli -regtest gettransaction e834a4ac6ef754164c8e3f0be4f34531b74b768199ffb244ab9f6cb1bbc7465a
+{
+  "amount": 0.00000000,
+  "fee": -0.00178800,
+  "confirmations": 0,
+  "trusted": false,
+  "txid": "e834a4ac6ef754164c8e3f0be4f34531b74b768199ffb244ab9f6cb1bbc7465a",
+  "walletconflicts": [
+  ],
+  "time": 1513204730,
+  "timereceived": 1513204730,
+  "bip125-replaceable": "unknown",
+  "details": [
+    {
+      "account": "",
+      "address": "mjtN3C97kuWMgeBbxdB7hG1bjz24Grx2vA",
+      "category": "send",
+      "amount": -15.10000000,
+      "label": "",
+      "vout": 1,
+      "fee": -0.00178800,
+      "abandoned": false
+    },
+    {
+      "account": "",
+      "address": "mjtN3C97kuWMgeBbxdB7hG1bjz24Grx2vA",
+      "category": "receive",
+      "amount": 15.10000000,
+      "label": "",
+      "vout": 1
+    }
+  ],
+  "hex": "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"
+}
+```
+
+After creating a transaction, it has to be confirmed and recorded in the Blockchain, the transaction has to be included in a block.
+Most of the applications require 6 block confirmations to consider the transaction as irreversible. If that is your case, you can mine additional 6 blocks into your Regtest chain:
+```
+$ bitcoin-cli -regtest generate 6
+[
+  "33549b2aa249f0a814db4a2ba102194881c14a2ac041c23dcc463b9e4e128e9f",
+  "2cc5c2012e2cacf118f9db4cdd79582735257f0ec564418867d6821edb55715e",
+  "128aaa99e7149a520080d90fa989c62caeda11b7d06ed1965e3fa7c76fa1d407",
+  "6037cc562d97eb3984cca50d8c37c7c19bae8d79b8232b92bec6dcc9708104d3",
+  "2cb276f5ed251bf629dd52fd108163703473f57c24eac94e169514ce04899581",
+  "57193ba8fd2761abf4a5ebcb4ed1a9ec2e873d67485a7cb41e75e13c65928bf3"
+]
+```
+
+
+## Testing with Regtest
+
+When you are on regtest, you are able to simulate edge cases and attacks that might happen in the real world, such  as Double Spend.
+We are going to use the package [bitcointest by dgarage](https://github.com/dgarage/bitcointest) to simulate a transaction from one wallet to another, but you can check [their guide](https://www.npmjs.com/package/bitcointest) for more specific attack simulations, such as Double Spend.
+
+First of all, you need to install Node.js, and use the NPM (Node Package Manager) to install `bitcointest`:
+```
+$ curl -sL https://deb.nodesource.com/setup_8.x | sudo -E bash -
+$ sudo apt-get install -y nodejs
+$ npm install -g bitcointest
+```
+
+After installing `bitcointest`, you can create the `test.js` file with the following content:
+```
+$ nano test.js
+```
+```javascript
+const { BitcoinNet, BitcoinGraph } = require('bitcointest');
+const net = new BitcoinNet('/usr/local/bin', '/tmp/bitcointest/', 22001, 22002);
+const graph = new BitcoinGraph(net);
+
+try {
+
+  console.log('Launching nodes...');
+
+  const nodes = net.launchBatchS(4);
+  const [ n1, n2 ] = nodes;
+  net.waitForNodesS(nodes, 20000);
+
+  console.log('Connected!');
+  const blocks = n1.generateBlocksS(110);
+  console.info('Generated 110 blocks');
+
+  console.log(`n2.balance (before) = ${n2.getBalanceS()}`);
+
+  const sometxid = n1.sendToNodeS(n2, 100);
+  console.log(`Generated transaction = ${sometxid}`);
+  n1.generateBlocksS(110);
+  n2.waitForBalanceChangeS(0);
+
+  const sometx = n2.getTransactionS(sometxid);
+  console.log(`n2.balance (after) = ${n2.getBalanceS()}`);
+
+
+} catch (e) {
+  console.error(e);
+  net.shutdownS();
+  throw e;
+}
+```
+
+When running `node test.js`, the command outputs:
+```
+$ node test.js
+Launching nodes...
+Connected!
+Generated 110 blocks
+n2.balance (before) = 0
+Generated transaction = 91e0040c26fc18312efb80bad6ec3b00202a83465872ecf495c392a0b6afce35
+n2.after (before) = 100
+
+```

README.md

@@ -104,10 +104,10 @@ Add: HOW TO DO A REFUND (short answer: ask!)
 
 ** PART FIVE: BITCOIN FUTURES **
 
-* 15.0: Setting Up a Bitcoin Regtest
-   * 15.1: Building the Regtest
-   * 15.2: Testing with Regtest
-   * 15.3: Mining with Regtest
+* [15.0: Setting Up a Bitcoin Regtest](15_0_Setting_Up_a_Bitcoin_Regtest.md)
+   * [15.1: Starting the Regtest](15_1_Starting_the_Regtest.md)
+   * [15.2: Mining with Regtest](15_2_Mining_with_Regtest.md)
+   * [15.3: Testing with Regtest](15_3_Testing_with_Regtest.md)
 
 ** APPENDICES **