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Today marks fifteen years since the publication date of the bitcoin white paper. A lot has happened in those fifteen years. bitcoin went through the block size war. A nation state has adopted bitcoin. We are possibly on the verge of approving a bitcoin ETF. bitcoin in almost every way is nothing like what was described in the original white paper years ago.
The network has grown, it has changed, it has evolved. On a social, economic and technical level, it is a completely different animal than it was many years ago. I feel like this day every year people tend to focus on bitcoin like it was in 2008. People are nostalgic for the basic design without mentioning mining pools, ASICs or second layer protocols. This year I wanted to do something different than wax poetic about section 10 on privacy or section 4 on Proof of Work.
In fifteen years there has been more development in bitcoin than one person can easily follow. There have been a good number of whitepapers over that period of time since the original bitcoin whitepaper. So why do we continue to focus solely on the one original white paper each year on this day? In the last year alone, out of the last fifteen, five major white papers have been published that could completely change the way people interact with bitcoin.
The fact that bitcoin continues to exist as it is now is a huge and world-changing achievement, but that is not enough to create the world that many of us want to see. bitcoin cannot yet reach the scale and functionality to serve the entire world the way it serves the people who use it today. There is a lot of work to do, a lot of problems to solve, and a lot of technical papers to write. Let’s look at some of the great articles written last year that seek to resolve some of bitcoin‘s most notable shortcomings.
BitVM
Launched on October 9, 2023, just this month, BitVM completely shattered the notion of what bitcoin is or is not capable of doing. Robin Linus of Zerosync published a paper describing an off-chain scheme to use arbitrary computation to secure the conditional transfer of bitcoin against such computation. The central value of Robin’s proposal is that it requires zero changes to the bitcoin protocol to achieve.
There are two novel ideas that help make this idea viable. First, it is possible to create a NAND logic gate using an existing bitcoin script in a way that validates on the stack that the NAND operation succeeds. For example, if a user provides 0 and 1 as inputs to the script, and if the output they provide is anything but 1, the script will actually fail to execute because the NAND operation is invalid.
The second idea is that hashlocks can be used to confirm which inputs a user wants to provide to a calculation irrevocably. A user commits to entering bits by revealing one or two preimages corresponding to a 1 or a 0, after which a user cannot change the committed entries since revealing both preimages to any logical key will allow the other user to send a transaction of penalty and claim. all funds from him.
From this point on, it’s simply a matter of running the calculation off-chain, and if one party tries to lie or withhold production, the other can simply challenge them on-chain. From here, the challenging party claims money after a time block or after the other user reveals both previous images trying to cheat. This design allows for incentivized off-chain computation to protect bitcoin, with the guarantee that eventually things will be resolved correctly on-chain, even if it takes a long series of transactions to corner the dishonest user by revealing both preimages to be penalized. , or give up and let the other user claim after a timelock.
BitVM has completely changed the degree to which bitcoin is programmable, without requiring any changes to the bitcoin protocol itself.
Timeout trees
On September 8, 2023, John Law published his article “Escalating lightning with simple pacts” to the Lightning-dev mailing list. In the paper, he described a concept he called Timeout Tree as a solution for scaling channel creation and closing for casual Lightning users. One of Lightning’s most well-known scaling limitations Network is the number of users who can open or close channels within any given block. This presents a big challenge for adding users to the network in the long term. Once someone has a Lightning channel, they can use it for content its heart off-chain, but there is a limited amount of block space available every ten minutes for new users to open channels.
Even the original Lightning whitepaper calculated that if each of the 7 billion people on Earth only opened two channels per year, bitcoin would require 133MB blocks to bring the entire world to Lightning. This is not an unknown, or recently discovered limitation, it has always been known. Timeout trees present an alternative solution to increasing block sizes.
The basic concept is that an LSP can use CHECKTEMPLATEVERIFY(CTV) to batch open channels to a very large group of users on a single UTXO, but with a problem. All channels expire, and if they have not been unilaterally closed (or at least the funding transaction was actually confirmed on-chain rather than left committed by CTV) at the end of that expiration, the LSP can sweep all funds. in the channel group. This allows for a very efficient channel opening footprint, potentially thousands of channels all opened with a single UTXO, and in the cooperative case, a very efficient closing footprint, where all users simply route funds over the Lightning Network. from the expiring timeout tree to a new one. off-chain and let the LSP sweep the old tree after it expires.
Timeout trees are an incredibly simple idea that offer a huge degree of flexibility to overcome one of Lightning’s biggest known limitations.
Ark
Ark is another second layer proposal that was bitcoin-dev/2023-May/021694.html”>Posted by Burak Keceli on May 22, 2023. Ark offers a completely new layer two design approach that attempts to overcome some of the limitations of the Lightning Network. It is very similar conceptually to a channel factory, but the key difference is in how it is used. A channel factory hosts a conventional Lightning channel that can be used repeatedly to send and receive, an Ark factory allows users to control an off-chain UTXO that can only be sent in its entirety once, like a bill of cash . Users spend their off-chain UTXO by atomically linking it to the creation of a new off-chain UTXO on a new Ark to transfer that UTXO. New Arks are created periodically to allow users to transfer coins on a rotational basis from the old Ark to the new one.
This is achieved using something called RUTF. In the transfer scheme, the Ark service provider (ASP, analogous to an LSP) takes care of liquidity to facilitate transfers. When a UTXO is spent off-chain from the existing Ark, the transaction that spends it to the ASP in compensation for providing liquidity to the recipient is signed using an entry from the new Ark in which the recipient gains control of the funds. This ensures that if the new Ark, where the receiver is receiving money, never confirms, the ASP cannot claim the money from the sender.
Ark is a cash-like system, with no liquidity restrictions requiring a specific user to have receipt capacity in advance in order to spend money, but because of this it has a much higher liquidity cost than a traditional LSP. However, this could be worth the increased overhead to the service provider in exchange for providing a more cash-like user experience.
zero synchronization
On May 12, 2023, Robin Linus posted the Zerosync proposal to the bitcoin developers mailing list. The scheme is an application-side zero-knowledge proof system for bootstrapping a bitcoin node. Comprised of three separate tests, Zerosync has the potential to enable trustless startup of a new bitcoin node without having to download and process the entire historical blockchain.
The first of the three tests covers the validity of block headers on the blockchain, providing succinct kilobyte-order proof that the difficulty requirement for each block header is successfully met. The second test validates the UTXO set at each block height by using Utreexo, a previous proposal to allow nodes to validate blocks without having the full UTXO configured. Finally, the final proof will actually provide a guarantee that all historical signatures and other witness data on the blockchain are valid.
Together, these three tests would allow a node to simply download the current UTXO set, plus a small test of at most a few kilobytes in size, and instantly have a validating and fully trusted node running. This will completely change the cost for users to fully validate the system when interacting with bitcoin.
Civilian kit
On May 1, 2023, Antoine Riard published the bitcoin-dev/2023-May/021602.html”>Civ.Kit: a peer-to-peer electronic marketplace system
With the foundation for a reputation system, a resilient transmission and communication mechanism, and bitcoin itself as the basis for escrow contracts for transactions, Civ.Kit has the potential to be a powerful protocol that facilitates peer-to-peer economic activity. using bitcoin as a medium of exchange. One of the most important long-term axioms for bitcoin‘s success is its use as a medium of exchange in a circular economy. Without this peer-to-peer monetization, you risk falling victim to the pitfalls of regulatory capture. Civ.Kit could be a framework and foundation to avoid that outcome.
For the next fifteen years
These are not even all the proposals that have been announced this year; some that are circulating out there are not even formal technical documents. But this is a small sample of the enormous progress that has occurred in the bitcoin ecosystem. only in the last year. Everything that happened the previous year is still there. And the year before that. Not to mention going back another fourteen years.
People love to talk about how bitcoin is not going anywhere or doing anything interesting, or that there is no technical development happening and that it is a stagnant and dying currency. After barely passing some of the great proposals in only last yearDoes bitcoin seem like a stagnant and dying project to you? Should we just give up, pack everything up and go home? After fifteen years of hard work by many and the numerous possible paths to explore to continue improving and expanding this project, does it seem dead to you?
I do not care.
