The objective of the latest improvements to the Bitcoin code is to increase the privacy and efficiency of the network. Taproot and Schnorr signatures are among the initiatives that need support from the nodes for their adoption.
One of the most notable years for Bitcoin was 2020 when its market had unprecedented growth. The 12-year-old network has grown larger and more mature month by month. Last year, the full track record of the blockchain managed to reach over 300 gigabytes despite difficulties.
In addition to the expansion of the network, there have been improvements to some of its technological advances. These include the presentation of Minsc languages, Schnorr signatures and the Taproot suite of updates. Likewise, a proposal for multi-signature transactions and an advance in smart contracts (DLC) for Bitcoin appeared.
Network users are looking for much more privacy, efficiency, and interactivity, which has led to updates and new features. Some technological advances in Bitcoin from last year promise to positively impact the network’s behavior in 2021.
Discrete Log Contracts (DLC) for Bitcoin
Discrete Log Contracts (DLC) allow two or more parties to agree to exchange money depending on the outcome of a certain event. They work based on an oracle, which is in charge of informing the correct result. After the event, the oracle publishes a commitment to the result, which one of the parties can use to claim their funds.
DLC developer Tadge Dryja said that these contracts can allow Bitcoin to enter the dApp market. The researcher described DLC “as one of the most important advances in Bitcoin today.” He noted that this feature will allow betting, borrowing, or even decentralized trading between Bitcoin and other cryptocurrencies or physical assets. Other networks including Ethereum, Tron, EOS have been exploring this concept.
Minsc Language for Bitcoin
The Minsc language is another advance in smart contract technology that could have great relevance in the future of Bitcoin. This scripting-like programming language allows the coding of complex contracts and transactions on the network. Minsc is a tool that seeks to expand the programming capabilities of Bitcoin.
Its developers, among those who are Nadav Ivgi, say that Minsc will generate the Bitcoin Script code starting from direct and simple instructions. Those behind the non-commercial and open source project have implemented it in Rust and posted its source code on GitHub. The new language could improve the performance of atomic swaps or contracts on the Lightning Network.
Upgraded Version of CoinSwap Protocol
Unlike other privacy products such as CoinJoin or PayJoin, CoinSwap creates a 2-of-2 or 2-of-3 multi-signature. That allows an on-chain atomic swap, so users can send their coins to a third address that they control. Chris Belcher, Developer of the protocol, says that it makes the transaction path more complex and more difficult to trace.
CoinSwap would mix Bitcoin from multiple owners and transfer them into a single address, making it difficult for tracing companies. In the case of this mixer, the transaction of the funds would involve several addresses simultaneously. Besides, CoinSwap does not leave any traces since there are no records that someone used this tool.
Taproot and Schnorr Signatures on the Bitcoin Code
The Taproot protocol and Schnorr signatures are complementary solutions that seek to increase Bitcoin’s privacy and scalability. Schnorr signatures emerged as a replacement for the Elliptical Curve Digital Signature Algorithm (ECDSA). The latter allows third parties to verify a transaction without the need to compromise privacy. Schnorr converts multiple transactions into one, thus reducing storage space and enabling faster confirmations.
For its part, the Taproot protocol provides privacy to the Bitcoin network as it makes regular transactions indistinguishable from complex transactions. In other words, Taproot allows a Coinjoin transaction with multiple signatures to go completely unnoticed. Along with the Schnorr firms, Taproot has gained acceptance from the Bitcoin mining industry, with 90% support.
By Alexander Salazar
