Friday, November 26

What are the next improvements to come in Bitcoin?


Key facts:
  • Reducing data on the network to improve efficiency is one of the purposes.

  • Also, work is being done to enable more complex transactions through several new features.

Periodically, Bitcoin undergoes developer-created enhancements to make this network more efficient, secure, and scalable. The most recent was Taproot, which has not yet completed a week since its activation, but there are already other improvement proposals (BIP) on the horizon.

John Newbery, Bitcoin Core developer and founder of the NGO Brink, whose purpose is to help others developers to get funds to carry out their projects, he presented on this subject in LaBitConf that takes place in El Salvador. His exhibition was called What to Expect from Upcoming Bitcoin Enhancement Proposals.

In its chat, Newbery detailed in a summarized and didactic way, without too many technical complexities, the four BIPs or Bitcoin improvements that could come in the medium term. All of them, he remarked throughout the presentation, aim to encourage the nodes and miners that keep the network running to continue doing their job. Next, we detail the main of each one of them.

1. Aggregation of signatures

This first BIP or Bitcoin Improvement Proposal commented by the specialist it would give the possibility of carrying out several transactions using a single signature. “That’s good because it involves less computational resources and less data on the network,” said the speaker.

Using this example, Newbery illustrated the improvement that signature aggregation would bring to Bitcoin. Source: YouTube screenshot.

This change would encourage different behaviors for users, and one of them is that would make it cheaper to make one coinjoin than an independent transaction by oneself. In this way, Newbery explained, “behavior that protects privacy is encouraged.”

2. Sighash_anyprevout

With the BIP-118 it would be feasible that the most recent transaction in a chain of transactions off-chain, like those of the Lightning network of Bitcoin, can lead to any transaction of that chain. Thus, “it is easier to create LN extensions with contracts off-chain Similar. With this, we could have scripts more complex, ”Newbery said.

As expressed in the abstract of the improvement proposal, BIP 118 would make it possible for firms not to lead directly to the UTXO (output of unspent transaction), but are dynamically linked to various transactions that have a script compatible.

3. Delegation

The BIP Delegation also includes several improvements, such as grave root —Proposed by Gregory Maxwell, who developed Taproot in 2018—, g’root o generalized root, and entroot.

From Taproot, you can create a tree (Merkel’s tree) with complex spending conditions, but you have to create it in advance when creating the output. Through delegation, various additional spending conditions can be added to that tree.

The three functionalities of BIP Delegation, illustrated in LaBitConf by John Newbery. Source: YouTube screenshot.

«Without going into details, this will also allow transactions off-chain more complex, “said Newbery, adding that” if we can bring the data off-chain, we can improve the scalability and privacy of the network.

4. Covenants

In law, a covenant (clause) is a condition in a lease or other contract that prohibits certain behaviors, as it would be, for example, not to raise animals in a house that is rented. That link may also have one more clause that says that if I sell that house, the clause must remain in effect.

How does this principle apply to Bitcoin? In the spending conditions that apply to a transaction. A) Yes, conditions could be added to what the counterparty can do in that output, as explained in more detail in this CryptoNews article about the bip-119.

Like the previous two enhancements, this also has implications for more complex transactions, he said. With this, expenses could be compensated off-chain as it happens on the Lightning network, but with many more people.

The principles of Bitcoin BIPs

Beyond the specificities of each one, Bitcoin’s BIPs all pursue similar goals. As the Cryptopedia explains, these are proposals from the developers to optimize the base code of Bitcoin and they need the consensus of the community for their approval and implementation. In this way, it is possible to systematize the development of Bitcoin.

The objectives of the BIP referenced here are to maintain a private and fungible network that cannot be censored, scalable, decentralized and compatible with incentives for the nodes and miners that support the work. Newbery emphasized the latter in all his presentation, since, according to his vision, it is the way to ensure that no one controls or coerces the network.

These principles of convenience that developers must follow are reflected in the most important BIPs that have occurred in the history of this cryptocurrency. In this sense, Newbery listed several improvements explained by CriptoNoticias in the past, such as the P2SH (Pay-to-Script Hash) of 2012, SegWit or Segregated Witness in 2017 or finally Schnorr Taproot on November 14, 2021.



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