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An Overview of the Upcoming Multisignature Standard by Andrew Poelstra

ECDSA has been the preferred signature algorithm for most blockchain networks for verifying ownership and transfer of assets on the networks. However, this complex scheme that has been used in Bitcoin since 2008 started to show its limits. For example difficulties in producing multisignatures and added complexity in second layer Bitcoin networks like Lightning and crhoss-chain atomic swaps. Last year, a proposal called MuSig, or MultiSignature Scheme, was made. It offers many improvements over ECDSA and is probably one the most important cryptographic improvements to Bitcoin that would help increase privacy and efficiency in transactions.

Andrew Poelstra, one of the key researchers and co-author of the paper published a technical overview on this upcoming cryptographic scheme and its applications.

Signatures of Messages Using Bitcoin Private Keys
The processing of signing messages with Bitcoin private keys with P2PKH addresses is a fairly known one but with the introduction of segwit, with its bech32 and P2SH forms, it is unclear how to distinguish these three addresses, a new BIP was proposed by developer Christopher Gilliard intending to set a standard for messages to be signed and verified by different clients.
Implementing Confidential Transactions in extension blocks

There was a proposal on bitcoin-dev to implement Confidential Transactions in extension blocks.

What do you think about implementing Confidential Transactions in extension blocks? CT transactions go from extension block to extension block passing through normal blocks. It looks the perfect solution:

  • Soft fork: old nodes see CT transactions as “sendtoany” transactions

  • Safe: if there is a software bug in CT it’s impossible to create new coins because the coins move from normal block to normal block as public transactions

  • Legal: Exchanges can use public transactions so regulators can monitor their activity

  • Capacity increase: the CT signature is stored in the extension block, so CT transactions increase the maximum number of transactions per block

ZmnSCPxj agreed that capacity increase can boost network capacity for all full nodes, he thinks extension blocks are not real soft forks but rather “evil” soft forks as older nodes have to upgrade in order to function optimally, which makes extension blocks worse than soft forks.

Card Shuffle to Bitcoin Seed
Bitcoin seed generation is the most important event for any Bitcoin holder, as without this seed your wallet and ultimately your money is lost. We as users trust hardware and air gapped wallets to be correct and honest in their seed generation, which is hard to verify. A new bring-your-own-entropy method was proposed on the Bitcoin dev mailing list by developer Ryan Havar to allow users to create randomness they trust.
Summary for December 2018
We’ve been taking a break for the past two months while working on a website upgrade. Since we did not cover news in that time, we decided to make a series of recap articles covering the last two months, starting with news related Bitcoin Core and going through Lightning Network and its related updates.