Even though there is a ton of focus on Bitcoin Core vs Bitcoin unlimited right now, there are other things to keep an eye on as well. The Core developers released a new roadmap last night which offers some interesting concepts. Perhaps the biggest change is how digital signatures will be changed to a more sophisticated algorithm. This will also help decrease the amount of data found in the blockchain.
As most bitcoin users are well aware of, every transaction needs to be digitally signed by the sender. Right now, this process is handled through the ECDSA signature algorithm. While there is nothing wrong with ECDSA, the Bitcoin Core developers have unveiled a new roadmap that will replace this algorithm with a better one. In the future, the plan is to use Schnorr signatures, despite there being several drawbacks.
On the positive side, using Schnorr signatures will result in less data stored in the bitcoin blockchain. It is believed the amount of data can be reduced by a quarter, which would be a significant advantage. Anyone who runs the Bitcoin Core wallet for the first time – or operates a full node – will be more than pleased to hear a smaller blockchain may be on the horizon. Discussion about replacing ECDSA signatures have been ongoing since October of 2016.
Moreover, the Schnorr signatures would bring a positive change to the way multisignature transactions are handled.The entire policy of the multisig would be obscured, and indistinguishable from a regular single pubkey. Moreover, it is impossible for multisig participants to reveal who signed off on a particular transaction and who did not. This brings some additional privacy to multisig transactions, which is never a bad thing.
Unfortunately, an algorithmic chance is always subject to some drawbacks and potential issues. Schnorr signatures cause a so-called “cancellation problem”, which could allow an assailant to subtract a key from a bitcoin multisig transaction. Most people know multisignature transactions require at least m-of-n signatures, yet if there was only one signature needed, it would nullify the usefulness of 2-of-3 multisig support. Additionally, it would be able to eliminate a multisig wallet party member, which does not bode well by any means.
Moreover, Schnorr signatures are not coming anytime soon. While SegWit activation is not a requirement to implement this new signature algorithm, it would make the process a lot easier. It seems plausible to assume Schnorr signatures will not go live until Segregated Witness is activated on the network. So far, it seems highly unlikely SegWit will activate anytime soon, which also means ECDSA signatures will remain a part of the bitcoin protocol for the foreseeable future.
JP is a freelance copywriter and SEO writer who is passionate about various topics. The majority of his work focuses on Bitcoin, blockchain, and financial technology. He is contributing to major news sites all over the world, including NewsBTC, The Merkle, Samsung Insights, and TransferGo.
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