Can this next gen signature algorithm replace Bitcoin’s current digital signature algorithm “ECDSA”?
Since a very long time, there has been a prolonged debate about the scalability of the Bitcoin Blockchain network in order to make it possible for millions and eventually billions of people can utilise the Bitcoin network, limitlessly.
It is 2018 and even today Bitcoin can’t handle so many users at once. Not only this, there is a limited space for the transaction in the public ledger’s blocks that eventually add up to the Blockchain in every 10 minutes. The way the network has been designed, it makes Bitcoin limited. To beat this person in the Bitcoin network are giving their best to make Bitcoin an awesome innovation with features like decentralisation, immutability, censorship-resistance and most importantly open-source.
Schnorr signatures are set to replace Bitcoin’s existing digital signature algorithm called ECDSA for an efficient one. Schnorr signatures are named after their inventor, Claus-Peter Schnorr. Schnorr Signature is going to improve the Bitcoin protocol by allowing the aggregation of multiple transactions into one/single signature. This might be useful in the scenarios where a single party wants to send a transaction which is funded by three different accounts to one receiver. What really happens here is, instead of sending three signatures in the transaction, it would be possible to send just one, yes that simple.
This, in turn, makes the transaction sizes smaller as far as these kinds of transactions are concerned. This can reduce the transaction’s use of bandwidth as well as storage of the Bitcoin network by 25%. This might make spam attacks ineffective as the transactions here would be smaller.
Bitcoiners have their own priorities:
- Some of them want to empower as many users as possible only to keep the characteristics of the Bitcoin intact. These people intend to minimise the level of trust they put in others by ensuring that if the scaling is done it is done very conservatively.
- The other group of the people want to onboard as many users as they can manage to get with the lowest fees as well as acceptable security.
Bitcoin is Decentralized, hence, there is no one in charge of the Bitcoin network so to get things done in an agreeable environment, the stakeholders, the list of the stakeholders include Developers, Miners, Businesses and the users must agree on how to move forward with a single goal. Just imagine so many people in a limitless Blockchain network agreeing to a single thing. This is extremely difficult to pull off. The majority of the stakeholders agree on all the steps that are needed to make Bitcoin scale whence the debate arises only when it involves timing and order of these steps and this has a critical impact on the health of the network.
We know how long it took for SegWit to finally get a widespread support across all stakeholder groups and then last year it was finally implemented. This opened the door for the next-gen innovations like Schnorr Signatures that further helps to improve the scalability.
Problems concerned with Bitcoin Network:
- Signatures are essential to conducting a successful Bitcoin transaction but unfortunately these signatures necessarily take up space in the blocks of the public ledger known as the Blockchain.
- These digital signature doesn’t need your sign or anything. They simply just claim the space that can be used for other transactions and this means you are going to have to pay to take their place.
- If one person sending a transaction from multiple sources then there must be a way to conduct this take with just one signature. And this is possible with Schnorr Signatures.
- Another benefit of adapting Schnorr signatures is the increased privacy about securing your “precious” Bitcoins.
On the other hand, Schnorr signatures will make your signature look like any other random signature in the Bitcoin network.
2- Spam Attacks
- Ever since Bitcoin existed, the network has suffered from countless spam attacks.
- A group of people desperately wanted to enlist their ideas in order to increase scalability and this was done to accomplish a political agenda. The attacks came to an end as soon as a scaling solution was agreed on.
- Schnorr signatures are meant to combat this kind of spam attack. If it is possible to have one signature per transaction.
- And somehow, if the attacker chooses not to use the Schnorr signatures and will continue using the old signatures then the users who are using Schnorr will have a small transaction to send and then they would have to pay less. This scenario will still make an attack even more expensive than before.
Moreover, Schnorr signatures increase the privacy of the multisig transactions by changing signatures in the transactions hence it would simply mask the original and authentic signatures. There is a probability that this will also reduce the size of the multisig transactions as there would only be a single signature attached to each transaction.
The final implementations of Schnorr signatures will allow the future developments to Bitcoin like Smart Contracts. Smart Contracts are otherwise called as “Scriptless Scripts.”