Bitcoin the king of all cryptocurrency, once again showing high spikes after dropping in the starting of 2018. Developments in any cryptocurrency determines how its community is serious and determines towards it. Bitcoin is one of the cyrpto which is backed by hundreds of developers who are keen towards solving problems faced by bitcoin and its scalability. With the passage of time and increase of load on bitcoin network we’ve seen a back log on the bitcoin transaction throughput. But just like I said above developers have figured out the solutions of these problem. In this article I am discussing three of bitcoin’s latest developments that are happening right now and whats on the horizon.
Bitcoin Latest Developments
1. Segwit ( Segregated Witnesses )
Segregated Witnesses is an upgrade to bitcoin protocol, proposed as BIP141 (Bitcoin Improvement Proposal) to improve several aspects of bitcoin blockchain like scalability, security and performance.. The purpose of Segwit is to prevent transaction malleability and an additional virtual size ontop of 1 MB block limit size. In a layman terms Segwit is the structural change of a typical bitcoin transaction, it splits the transaction, moves the signatures data and scripts in a separate structure at the end of transaction which does not count in block limit size, thus making more space in block for new transaction.
2. Lightning Network
If you send 1 BTC to a person, in order to get the transaction complete you have to pay a small fee and wait for the transaction to get confirmed and recorded on the blockchain. This process is done every-time you send or receive bitcoin. That is how a bitcoin transaction works in a nutshell.
While recording the transaction on bitcoin blockchain is how it was originally designed this is true in most cases there might be sometimes that recording a transaction entry to blockchain may not be required. For example, lets say you want recurring payments, where lets say I have to pay monthly netflix payment, if I do these small payments I will have to pay a transaction fee for each time I make a payment. But opening a lightning channel will allow me to make these payments off-chain until I want to put the final entry onto the blockchain. Lightning network can rescue you in this situation.
Lightning network will allow to create a payment channel for some determined time between sender and receiver, after that you can send or receive bitcoins any number of time without recording your transaction on blockchain. After the determined time expired or you decide to close a channel, the final balance will be transacted and recorded onto the bitcoin blockchain.
Through payment channels users can transact bitcoins with a lightning speed, without consuming bitcoin blockchain bandwidth with almost instant confirmations.
3. Schnorr Signatures
Schnorr signatures is the top most hot development going on bitcoin blockchain. Schnorr signatures makes existing signatures more compact and allow people send transaction from multiple source with only one signature. It not only solve scalability issues but also prevent bitcoin blockchain from spam attacks. Schnorr signatures will reduce the blockchain bandwidth and storage by 25-30%.
So these are top three latest development on bitcoin blockchain. The success rate of an open source software program can only be measured by the community of developers behind it and bitcoin is one of the most successful software project our generation have seen. I am just waiting to see the time when I can deploy a smart contract on bitcoin blockchain and issue a token on it.