What is the next step for Bitcoin after Taproot?

Taproot, a privacy and scalability upgrade, the long-awaited soft fork of Bitcoin developers finally launched in November. It is worth mentioning that even if Taproot is now activated, Taproot’s work is far from over, and more BTC upgrades are in preparation. After Taproot, what’s next?

So, after Taproot, what will be the next step?

After Taproot upgrade

Taproot is a particularly big upgrade of Bitcoin, known as a “soft fork”, which is not often implemented in the Bitcoin field.

Soft forks are not common. Before Taproot, the last soft fork was SegWit, which was activated on Bitcoin four years ago.

Nonetheless, they are an important type of upgrade that has affected many projects built on Bitcoin, iteratively improving the functions of open source digital currencies.

To use Taproot transactions, Bitcoin wallets, exchanges, and other services will need to be upgraded to support them. In addition, many of the Taproot-dependent changes that developers have been paying attention to still need to be made.

However, even if some exchanges and wallets have not yet adopted Taproot, some exchanges such as BitGo and Blockstream Green are already fast, and more than 50% of Bitcoin-supporting nodes are running upgraded software.

In order to understand the future of Bitcoin in the long term, let’s take a look at some other possible soft fork changes in the pipeline.

SIGHASH_ANYPREVOUT

SIGHASH_ANYPREVOUT is described in detail in Bitcoin Improvement Proposal (BIP) 118. The description seems to be overwhelming, but the changes may not be as dramatic as it seems.

In short, it allows a new signature option when signing transactions, allowing users to sign transactions without adding a specific output (ie the coins they want to send)-at least not immediately.

This code change helps solve various technical problems, including those faced by the Lightning Network. The Lightning Network is an overlay network of Bitcoin, which improves the scalability and speed of transactions and reduces costs.

One of the pain points of the Lightning Network is the need to store the latest data. Similar to losing Bitcoin private keys, if users lose this data, they may not be able to get their funds back. The proposed Lightning Network transformation Eltoo can help reduce state storage, but it requires SIGHASH_ANYPREVOUT to work properly.

SIGHASH_ANYPREVOUT paved the way for Eltoo, which can make Lightning easier to use.

Covenants (contract)

The contract is a proposed change to the Bitcoin code that will restrict where users can send their funds. For example, a contract can restrict the location of Bitcoin to be sent to only a few whitelisted addresses.

Why should users restrict the use of their funds? there are many reasons.

One is security: the contract makes it easier to realize the “treasury”, even if the thief tries to “take them away”, the user can still get their funds back, but this is only an application.

Contracts can also help congestion control and channel factories, which is another proposed idea to further improve the scalability of the Lightning Network.

This is the general idea of ​​the contract. There are at least a few proposals about the contract, including “OP_CHECKTEMPLATEVERIFY” (outlined in BIP 119) and “OP_TAPLEAF_UPDATE_VERIFY”, each of which uses different technical methods.

Drivechains

“Side chains” have long been proposed to be added to Bitcoin. They are additional blockchains “linked” to Bitcoin.

These side chains can have new and experimental technologies that Bitcoin does not have yet-for example, adding zk-SNARKs functions similar to the privacy coin zcash, allowing users to provide more privacy than Bitcoin. Users can effectively lock their bitcoins in order to use new coins in the side chain.

In the past, side chains were called “altcoin killers.” Because side chains provide a way to add new experimental technologies to Bitcoin, they should reduce the need to launch new coins to test new ideas.

Drivechains are a derivative of this idea invented by researcher Paul Sztorc. In addition to writing down the changes he proposed in BIPs 300 and 301, he and other developers have implemented a working version of this idea.

However, Drivechains is a more controversial proposal because some developers believe that they can provide more power to miners (protecting Bitcoin).

Cross-input signature aggregation

Now that you have completed Taproot, you can add cross-input signature aggregation (sometimes just called CISA) on top of it.

Digital signatures are a key part of Bitcoin. When users want to send some bitcoins, they must use their private key to “sign” the bitcoins, proving that they own their bitcoins and allowing them to send bitcoins to others.

Taproot introduced Schnorr signatures, which allows multiple signatures to be combined into one signature, thereby reducing transaction overhead and improving scalability.

On this basis, CISA recommends allowing signatures to be aggregated in a single transaction. An exciting result of CISA is that it can make CoinJoins cheaper.

By using wallets such as Wasabi and Samourai, CoinJoins is a way to improve user privacy. It combines multiple users’ coins into a transaction and “mixes” them so that it is difficult to distinguish the source of any coins.

Currently, coinjoin is troublesome and more expensive than ordinary transactions. But with the China Iron and Steel Association, the price may be much cheaper. All signatures in the transaction can be mixed together, reducing the cost of CoinJoin transactions.

In the end, only time will tell whether any of these proposals will become Bitcoin. Once more specific proposals are made, the community will decide whether they are worth pursuing good changes.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/what-is-the-next-step-for-bitcoin-after-taproot/
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