This is a guest post from Kieran Smith
Bitcoin critics suggest the cryptocurrency has become a dinosaur, left behind by technologically superior altcoins.
But while the protocol is mostly unchanged since Segregated Witness (SegWit) was activated in August 2017,there are several upgrades in the pipeline promising to bring fresh innovation to the leading cryptocurrency.
A new second-layer privacy protocol proposal—CoinPool—was shared on the bitcoin dev mailing list by Antoine Riard and Gleb Naumenko earlier this month. The protocol promises to upgrade bitcoin privacy and scalability, guarding against block chain surveillance by allowing several users to trustlessly share a single UTXO.
As it relies on Taproot, the protocol is not tipped for implementation anytime soon, but it could represent a significant step forward for Bitcoin.
AltNet is another proposal put forward in May by Bitcoin Core contributor Antoine Riard that aims to make the P2P layer of Bitcoin more robust. This would enable full nodes to communicate with alternative data transports across the network, making it easier for nodes to receive data from other data transport methods like bluetooth, orbital satellites, or the lightning network.
The Dandelion protocol was originally proposed in 2017 to help improve privacy by concealing the IP address behind a transaction. The protocol breaks transactions in two parts—the “stem” and the “fluff”—to obfuscate its origins.
After some feedback and subsequent adjustments, an improved version of the Dandelion Protocol was proposed in May this year called Dandelion++. And it now looks ready to be included in an upcoming Bitcoin Core release.
Simplicity is a proposal from 2017 for Bitcoin itself to upgrade its scripting capabilities and become more versatile and attractive to developers.
The original Bitcoin script was somewhat limited by Nakamoto for security purposes, and Simplicity attempts to preserve this original ethos but allow for more complex applications like smart contracts.
Merkelized Abstract Syntax Trees (MAST)
First proposed by Dr Johnson Lau in 2016, MAST is a combination of Merkle trees and Abstract Syntax Trees (AST).
The protocol would allow more complex data sets to be added transactions, and also use Merkle Proofs to reduce transaction size. This would increase scalability and privacy on bitcoin and make it possible to implement complex smart contracts.
At present there are several different proposals containing MAST, and the technology looks set to eventually make it on to the network.
The idea of Drivechains was conceived by Paul Sztorc in a November 2015 blog post as a way to implement his peer-to-peer oracle protocol known as Bitcoin Hivemind.
The protocol seeks to “peg” additional sidechains to Bitcoin, with each having their own qualities. For example, one sidechain might have privacy functionality, and another might be built specifically for running smart contracts. Unlike other sidechain projects like Liquid and Rootstock, drivechains would be secured by Bitcoin miners.
The Schnorr/Taproot upgrades encompass several different technologies that also promise greater scalability and privacy for Bitcoin.
Schnorr signatures have been tipped for implementation on Bitcoin since 2014. These signatures replace Bitcoins’ signature digital algorithm, ECDSA, and would create efficiency benefits by allowing the aggregation of signatures to minimize network load and improve scalability.
Several bitcoin devs are working on a Schnorr signature proposal that would include another proposal called Taproot in a single protocol upgrade. While Schnorr lets signatures aggregate, thus allowing bitcoin multi-signature transactions to appear as if they were standard transactions, Taproot allows an even broader set of transaction types to be condensed—offering even more significant privacy benefits.
As this selection of proposals from the past few years show, bitcoin is constantly subject to change, and has innovative upgrades in store.
With that said, one should remember that as an asset with the potential to become a global reserve, the Bitcoin network benefits from stability because individuals must be able to have confidence that the key aspects of the network—including the hardcoded supply cap and the block size—will remain unchanged.
About the Author
Kieran Smith provides content strategy and copywriting services for cryptocurrency companies at Bitcopy.
Photo Credit: Davidstankiewicz