There’s a lot of activity happening in Bitcoin tech development – with innovations that might help the original and oldest blockchain to catch up with the boom of projects building in the Ethereum ecosystem.
Bitcoiner drops BitVM paper — bringing Ethereum-like contracts to Bitcoin
The author of the white paper, Robin Linus, based BitVM’s architecture on Ethereum’s optimistic rollups with fraud proofs and recent Merkle tree developments.
Lightning Labs launches rebranded ‘Taro’ amid Bitcoin’s BRC-20 bottleneck
Lightning Labs have unveiled a new solution to the clunky process for minting new assets on the Bitcoin network.
Lightning Labs Releases ‘Better’ Version of Token Minting on Bitcoin After BRC-20s Clog System
The project formerly known as “Taro” has been rebranded “Taproot Assets” after Lightning Labs was hit with a trademark infringement lawsuit. The new offering comes with a “core set of features to bitcoinize the dollar,” according to the firm.
Lightning Labs and Tari agree to convert restraining order in trademark suit
Tari Labs, who bought the suit against the project has faced backlash from the crypto community with some suggesting the lawsuit was “frivolous.”
Asset management firm launches BTC Lightning Network startup accelerator
The startup accelerator will consist of four yearly 8-week programs, with successful applicants receiving $250,000 and one receiving an additional $500,000 at the end of the program.
Visa should be ‘scared’: Lightning Labs raises $70M to add stablecoins
The firm has built a new protocol called Taro to enable stablecoins to be sent and received on the Bitcoin Lightning Network.
Lightning Speed: Taproot And The Lightning Network, A Match Made In Heaven
A little more than two months ago, Taproot went live. What does the biggest update to the Bitcoin network in years bring to the table? How can it help the increasingly popular Lightning Network? That’s exactly what the article we’re about to summarize is about. It starts by informing us that “Bitcoin even has a scripting language,” and that it’s called Script.
But before we get into that, what is Taproot?
“Taproot is a combination of three Bitcoin Improvement Proposals (BIPs) that enhance this scripting infrastructure: BIP340 – Schnorr, BIP341- Taproot and BIP342 – Tapscript. The key of Taproot that unlocks all the others is the introduction of Schnorr Signatures, which allow for key and signature aggregation. This means that multiple parties are able combine their keys to a single public key, thereby allowing them to sign a single message.”
It’s important to know that Taproot won’t allow “fully expressive” or “Turing complete” contracts like in Ethereum and all its related chains. Nor are those kinds of contracts a priority for the Bitcoin network, as our sister site Bitcoinist points out. Also, to curb our expectations, let’s read what Tales From The Crypt podcast’s host Marty Bent warned us about in his newsletter:
“It is important to understand that these benefits aren’t going to be immediate. They are going to come to market slowly over time as the software gets implemented into wallets and other services. Many are expecting Taproot to get activated over the weekend and all its potential benefits to be realized immediately. This is simply not the case and it is important that this fact is understood.”
Ok, let’s get into the meat and potatoes.
How Does Taproot Help The Lightning Network?
First of all, every Lightning channel consists of “2 of 2 multisigs”. So, a first benefit of being “able combine their keys to a single public key” is that “we have lighter transactions and therefore cheaper channel openings”. Not only that but “signature aggregation also offers enhanced privacy since its contents are indistinguishable from a single-signature transaction.”
To clear up how does this benefit privacy, let’s quote the Binance Academy:
“Spending Bitcoin using Taproot could make a transaction in a Lightning Network channel, a peer-to-peer transaction, or a sophisticated smart contract become indistinguishable. Anyone monitoring one of these transactions would see nothing but a peer-to-peer transaction. It’s worth noting, though, that this doesn’t change the fact that the wallets of the initial sender and final recipient will be exposed.”
However, this is not quite true… yet. The Voltage article clarifies, “Does this mean that lightning channels are now unidentifiable on the blockchain? Well, the answer is ‘yes’ for private channels and ‘not quite yet’ for public channels.”
BTC price chart for 01/04/2021 on Gemini | Source: BTC/USD on TradingView.com
Private And Public Lightning Network Channels
What’s the problem? Well, the network doesn’t announce the creation of private channels. The public ones, on the other hand:
“Unfortunately, even if we do hide the channel openings on the blockchain, the current specification of the lightning protocol requires nodes to broadcast the details of the funding transactions when announcing their channels.
This might seem counterintuitive at first, but it’s also an elegant way to prevent nodes spamming the network with fake channels.”
Also, let’s take into account that surveillance firm Chainalysis already announced a Lightning Network-related service. We should assume there are “sybil nodes surveilling the network”. And that “With enough hostile nodes” a bad actor could paint “a fairly detailed picture of the flow of funds”. Well, Taproot has an elegant solution for that:
“Taproot’s introduction of Schnorr signatures paves the way for a type of smart contract called Point Time Locked Contracts (PTLCs). PTLCs operate in the same manner as HTLCs by allowing payments to be identified by nodes, but PTLCs come with a handy feature of being able to randomize its identifier with each hop thereby making it impossible for nodes to correlate the traffic of sending and receiving nodes.”
Understand that “Taproot is a door that opens many other doors”. It’s a new toolkit with which developers all over the world will create new features and improvements. The info this article contains is just the beginning, the low-hanging fruit that we can see from our advantage point. Remember what Marty Bent said, “these benefits aren’t going to be immediate.” The Taproot-enabled stage of Bitcoin is just starting.
Featured Image by Cooper Baumgartner on Unsplash | Charts by TradingView
Bitcoin sets up nail-biting weekly close after Taproot goes live
Markets put the ETF rejection behind them as BTC price action retains higher levels through the weekend.
Bitcoin Taproot locked in to improve privacy and introduce smart contracts
The Bitcoin Taproot upgrade will activate later in 2021 as developers urge to create applications that will leverage its advantages.
Bitcoin Taproot upgrade finally locked-in, activation set for November
With Taproot achieving the 90% critical consensus mark among mining nodes, all is now set for Bitcoin soft fork activation later in November.
Almost all major Bitcoin mining pools now signaling for Taproot activation
The largest Bitcoin mining pools are signaling for Taproot but the activation may not reach the 90% critical consensus mark during this current difficulty epoch.
Crypto Long & Short: Why Bitcoin’s Taproot Upgrade Matters
The most important impact for the investing market overall: It’s a reminder that Bitcoin is a technology. Plus: What’s next for dogecoin?
Bitcoin’s upcoming Taproot upgrade and why it matters for the network
The upcoming Taproot activation stands to potentially make the Bitcoin ecosystem more user-friendly as well as secure.
Almost half of Bitcoin hash rate signaling for Taproot activation
Major Bitcoin miners have begun signaling for Taproot activation that will improve scalability and privacy for the largest cryptocurrency by market capitalization.
Bitcoin Taproot Upgrade Nailed Down for July, but Some Finer Details Still Aren’t Finalized
The finalized code for Taproot will be shipped in March, but will it house the “user activated soft fork” feature that threatened to activate SegWit?
Taproot Update: Bitcoin Users Home In on Activation Plan, Date Still TBD
The meeting ended with rough consensus in favor of BIP8 (false), as well as with approval of two possible methods to put this BIP into motion.
How Bitcoin’s Taproot Upgrade Will Improve Technology Across Bitcoin’s Software Stack
Scaling, privacy and custody software will all benefit from Bitcoin’s biggest upgrade in years.
Bitcoin Core’s Latest Release Is Out: Here’s What’s in It
Bitcoin Core, the original wallet and “full node” software for the Bitcoin network, received an update today.
Bitcoin Miners, Developers Narrow Down How Taproot Will Be Activated
We know it’s going to happen – the question is when and how.