According to the market analyst known as “Bitcoin Jack”, the new “Schnorr Signatures” technology that will be implemented in the Bitcoin network will not bring total privacy to digital assets.
Whilst most people are focused on the halving event that will reduce Bitcoin miners’ reward, some are already studying one of the next innovations in the digital asset network: privacy.
“Schnorr Signatures” will be implemented in the Bitcoin network to give more privacy to the digital asset. Andreas Antonopoulos considers that this technology is better because of its peculiarities regarding the way mathematics develops.
The Bitcoin expert explained that how digital signatures are calculated can be verified without actually revealing the private key. In other words, it can be confirmed that someone owned the private key when doing the signature, said Antonopoulos.
A digital signature algorithm is a mathematical function that provides a number resulting from the application of the private key to a message. Consequently, anyone can verify that a user owns the private key without really having to know it.
Pieter Wuille, from Blockstream, announced last January 23rd that the final proposal to implement the new technology was published. The developer explained that these documents seek to integrate Schnorr and Taproot into Bitcoin. He said that it depends on users if the ecosystem accepts it and how.
The market analyst known as “Bitcoin Jack” also shared his opinion on the matter by stating that the Schnorr encryption scheme would allow improvements in the Bitcoin protocol such as block space efficiency, slightly higher levels of privacy and better security.
However, he said that the new technique will not make Bitcoin transactions private as Bitcoin is open. He noted that certain protocols, created based on the Bitcoin protocol, offer some kind of obfuscation of transactions, but they are second-layer solutions to a problem that should be solved natively.
Whilst stressing that Schnorr would not make Bitcoin private, “Jack” said that the technique will ensure that transactions will occupy less space on the blockchain, thus allowing more transactions to be processed and even fees to be reduced.
Brian Armstrong predicted that the 20s will witness the normalization of a private currency. The analyst also clarified that the Schnorr technique would introduce several improvements. However, it will not implement the fungibility feature for privacy in Bitcoin.
The expert believes that, with its full adoption, it will be possible to save up to 25% of space and, therefore, increase the transfer rate and reduce fees. He also assured that it will mask the types of transactions, thus effectively protecting the public keys involved.
Armstrong stated that the Schnorr technique will create an improved “privacy” layer, hiding some transaction information, which will make the chain faster and less transparent. Multi-digit transactions are among those that will be protected.
Throughout the years, Bitcoin has gained new functionalities and the network has increasingly developed, of which Lightning Network is probably the best example.
According to Samson Mow, Lightning Network can already process more transactions than competitors such as Visa and AliPay.
By Alexander Salazar