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Bitcoin – The Evolution of Technology Stack

  • October 23, 2020

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Bitcoin – The Evolution of Technology Stack

Bitcoin was released as open-source software on its established in 2008. For more than a decade of existence, bitcoin has significantly changed and improved.

While there’s a great number of cryptocurrencies, bitcoin remains the number one, and its features stay unbeatable.

If you’re trying bitcoin for the first time, you probably have lots of questions in mind. In this article, we will dive into the important changes and improvements the digital currency has made over the decade.

Without further ado, let’s get started!

Layer 2

Recently, the adoption of the crypto’s layer 2 technology has created a buzz in different corners of the globe.

Critics and other economists believe the number of channels has declined. The total BTC locked when assessing Lightning’s user adoption is no exception.

Related: Does Your FinTech Company Need Media Coverage?

Despite the negative feedback from other experts, the lighting network’s privacy properties should not be ignored. Unlike other options, these properties are relatively straightforward.

Since Lightning does not have its own blockchain, investors and traders can transact using network overlays and other additional techniques.

Another development in Layer 2 privacy is the WhatSat. What is it, and how does it work? Simply, it is a private messaging system. As a modification of the Lightning Network Daemon, this project enables the relayers of any private messages to be well-compensated for their services, which is in the form of micropayments.

Smart Contracts

Aside from the adoption of layer 2, there are other projects intended to restore the smart contract functionality of bitcoin.

Since 2010, some bitcoin opcodes were removed due to the series of bugs. So, Satoshi, the developer of bitcoin, decided to disable the functionality of the script.

But bringing back the smart contract functionality is a significant development so far.

Before, economists believe that smart contracts have potential security risks. But the risks were non-trivial.

The truth is that more functionality has been introduced. New approaches to smart contract architecture have been found to provide vast functionality and minimize unpredictability.

Merklized Abstract Syntax Trees, the device of a new approach to the crypto smart contracts, has caught supporting technologies.

Among MAST structure’s most prominent implementations, the Taproot is one, designed to enable an application to be expressed as a Merkle Tree.

Spend conditions is another interesting innovation in smart contracts. Greg Maxwell originally proposed covenants as a thought experiment in 2013.

Six years had passed, but covenants were impractical, according to experts.

Good news! A new opcode leverages the technology to enable covenants to be implemented in bitcoin. This is OP_CHECKTEMPLATEVERIFY, which is formerly called as OP_SECURETHEBAG.

Mining

In mining protocols, there are also interesting developments.

Although the issue of centralization in this crypto mining is exaggerated, there are power structures that can be decentralized.

Pool operators can decide what particular transactions to be mined by constituents.

However, a few operators have abused this power, which led to the reallocation of hashing and mining of empty blocks.

Thankfully, Stratum V2 was developed. It is a complete overhaul that implements BetterHash. As a secondary protocol, this allows mining pool constituents to decide what they will mine.

Privacy

Contrary to many arguments, there are multiple emerging protocols developed to level up bitcoin’s security.

Generally, most solutions in any private transaction are half-baked. Privacy assets neglect a higher level of privacy. So, a lack of maturity has been a common problem in both vectors. Over time, this makes every important transaction simpler to de-shield with the use of traceability analysis in the blockchain layer or peer-to-peer network layer.

Fortunately, some projects attempt to push boundaries on both vectors. CheckTemplateVerify and P2EP are an interesting development as privacy is efficient and of high quality.

Conclusion: Evolution of Technology Stack

Bitcoin has significantly improved over the past 2 decades. Layer 2, smart contracts, mining, and privacy are a few things to expect and enjoy when using bitcoin.

To start investing and trading, go to bitcoinup.trade for more information!

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