Bitcoin Taproot Upgrade and Ergo Sigma Protocol


The recent Bitcoin Taproot upgrade has included many changes and has been widely discussed. The Taproot upgrade consists of three Bitcoin Improvement Proposals (BIPs): Schnorr Signatures (BIP340), Merkelized Abstract Syntax Trees (MAST-BIP341), and Tapscript (BIP342). With this upgrade, Bitcoin will allow for greater scalability, privacy, and flexible smart contract design.

Ergo’s design is also based on the Sigma protocol, the well-known generalized Schnorr proof. Ergo has been designed for scalability and privacy since its inception, such as NIPoPoW (Non-Interactive Proof-of-Work) envisioned by Bitcoin. Additionally, Ergo enjoys the power of extending the UTXO model and the long-term security of proof-of-work.

BIP340 brings the Schnorr signature mechanism, which has been debated among Bitcoin developers since 2018. Schnorr signatures are considered to have a high level of security while maintaining a fast verification process. Schnorr signatures make complex transactions look like regular transactions, making various transactions indistinguishable.

BIP341 implements a Merkelized Abstract Syntax Tree (MAST), which allows a set of hashes to be compiled under a single hash. This structure allows the spender to choose some conditions to be met, while others are not disclosed. MAST allows for a simpler verification process, increasing expressivity and privacy without compromising security.

Bitcoin’s previous Pay-to-Script Hash (P2SH) design was limited by smart contract privacy. When using multi-signature contracts, the contract script is displayed after the transaction. This would reveal information about users while adding to the bloat of the blockchain. The newly implemented MAST design allows to hide this extra information embedded in the contract. Using Schnorr proofs, Taproot can even hide evidence that the MAST structure ever existed.

BIP342 Tapscript updates the Bitcoin script, implementing the aforementioned Schnorr and MAST upgrades. Tapscript also removes the 10,000-byte script size and opcode limit, improving signature hashing and enabling more expressive scripts.

Adding BIP340 and zero-knowledge proofs to Bitcoin enables interoperability between Ergo and Bitcoin, allowing for private cross-chain atomic swaps and possible future sidechains.

While Ergo is not a dedicated privacy chain, its Sigma protocol allows zero-knowledge privacy applications to provide verification using Schnorr signatures. This enables Layer 2 applications such as NIPoPoW and sidechains to run anonymously on Ergo.

Ergo’s language, ErgoScript, already includes what was envisioned for Bitcoin – it adopts a similar structure, but applies different techniques. By implementing a more expressive smart contract language with UTXO and PoW elements, Ergo aims to be A platform for secure, complex, scalable, and private decentralized financial applications. Bitcoin can take advantage of Ergo’s security through its interoperable DeFi capabilities.

Posted by:CoinYuppie,Reprinted with attribution to:
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