The most popular and most valuable cryptocurrency, Bitcoin has its fair share of challenges – mostly scalability and privacy related. In order to overcome these challenges and continue the work of expanding cryptocurrencies, as whole several alternative currencies (altcoins), each with its own blockchain has been created by tech pioneers. In turn, these have been designed to provide features that bitcoin cannot compete with. One of these new currencies might even knock bitcoin off his throne, with the added new features.
To maintain and sustain the dominance of bitcoin, Bitcoin Core developers are working on a variety of bitcoin improvement proposals, known as BIPs.BIPs are documents that allow the developers to design a proposal developed to address a bitcoin network problem. For example.BIP 141, also known as Segregated Witness(SegWit), its implementation has accelerated the speeds in the Bitcoin network, thus significantly reducing transaction fees.
Moreover, the software upgrade also helps to provide several advantageous functions. Most BIPs have the potential to positively impact the bitcoin blockchain, some of them have not kept their promises to the announced extent. The article takes a quick peek at the three most promising Bitcoin Improvement Proposals.
The Lightning Network
The lightning network is a side chain solution, but it is an improvement for bitcoin network so it can be viewed as a BIP.It was proposed by Thaddeus Dryja and Joseph Poon in a 2015 white paper, The network consists of user-generated channels that send payments back and forth in a secure and trust-less fashion. (By trust-less we mean that you don’t need to trust or even know your counterparty).
For instance, I want to pay you for each minute of video you watched. We would open a lightning channel and as the minutes pass, periodic payments would be released from my wallet to yours. When I’m done watching, the channel would be closed to settle the net amount on the bitcoin blockchain.
The transactions are instantaneous as it is between two people and there is no need to broadcast it to the whole network. Since there are no miners that need incentives, transaction fees are low or even non-existent. Due to the introduction of multi-signature wallets, the Lightning Network was made possible. Through this technology, parties can process an unlimited number of transactions without storing all details in the blockchain. he only information recorded is the number of Bitcoins in the wallet and the percentage of parties involved in the transaction.
BIP 112 contains part of the code that is required in implementing Lightning Network. The upgrade would be implemented as a soft fork. The upgrade would not only activate direct transactions, cross chain payments would also be made possible. It would also simplify the introduction of the Smart- Contract function in the Bitcoin blockchain.
M.A.S.T. (Merkelized Abstract Syntax Trees)is a cryptographic tool, that makes it possible to define data and simultaneously reduce the amount of data to be recorded in the blockchain.M.A.S.T. is a combination of two tools, namely the two algorithms Merkle Trees and Abstract Syntax Trees.By allowing the creation of algorithms with different functionalities and conditions within the Bitcoin Blockchain, it enables only a relatively small amount of data to be inserted in the transaction block
By combining functionalities of Merkle Trees and Abstract Syntax Trees algorithms, it represents programs in a compact and secure way. The data structure of Merkle Trees can be used to efficiently verify and sustain the integrity of the stored data.Johnson Lau’s BIP 114, is one of the first proposals to implement M.A.S.T in the Bitcoin Network. It will introduce a new script which will increase network efficiency, the script would largely reduce the need for large transaction data while providing transaction privacy.
BIP 116 and BIP 117 developed by Bitcoin Core developer Mark Friedenbach are designed to activate M.A.S.T. on joint implementation. An opcode in BIP 116 would make it possible to confirm the data in the question as true without disclosing the entire data set.BIP 117 also called Tail Call Semantics would produce a generalized form of M.A.S.T. in conjunction with the BIP116.
Greatest advantage offered by the addition of M.A.S.T is the possibility of smart contract functionality as well as scalability. With the usage of M.A.S.T, it is possible to write a long list of conditions, within a spend and without a proportionate growth in data.
Thus it is possible to create a complex smart contract on the Bitcoin blockchain. Moreover, M.A.S.T can also help address scalability concerns. It is a quite unique upgrade, as there is no-trade off between efficiency, functionality, and privacy.
This BIP provides a layer for data within the network, it would apply to the number of transactions and the addresses affected by them. Only participants in the transaction can see the amounts transferred, still ensuring no double-spend in a cryptographic manner.This is a step ahead, beyond the usual privacy offered by Bitcoin’s blockchain, which relies completely on pseudonymous (but public) identities. It matters a lot, as insufficient financial privacy can have serious security and privacy implications for both commercial and personal transactions.
Thieves and scammers can thus focus their efforts on known high-value targets, competitors can learn business details, and negotiating positions can be undermined in the absence of adequate protection. The activation of confidential transactions would enable Bitcoin to compete with other privacy-oriented coins such as Monero (XMR) and Zcash (ZEC), which have benefited from the increasing demand of users of digital currencies for transaction privacy.