For all the nice that Bitcoin brings to the desk, it additionally possesses a generally accepted concern in scalability. Bitcoin can solely course of a restricted variety of transactions per block and, as of Aug. 17, 2022, can deal with about 5 transactions per second, which compared to most different blockchains is low. The issue limiting scalability lies in Bitcoin’s cryptographic algorithm.
The Elliptic Curve Digital Signature Algorithm (ECDSA) is the important cryptographic algorithm that powers Bitcoin and ensures that solely the rightful proprietor can entry and handle their funds. At the moment, verification of the ECDSA, a Bitcoin signature permitting to hold out transactions and ship Bitcoin (BTC), will not be environment friendly and limits the scalability of the Bitcoin blockchain. A possible resolution is utilizing zero-knowledge proof (ZKP) expertise, permitting increased levels of privateness and safety.
A latest Starkware paper presents the tactic for effectively verifying ECDSA from throughout the STARK ecosystem, probably resolving the blockchain trilemma for Bitcoin — i.e., attaining scalability, safety and decentralization concurrently.
Foundations of the expertise
A ZKP is a cryptographic method that allows the prover to substantiate one other particular person’s declare with out supporting knowledge. ZKPs are cryptographic protocols that hold third events away from customers’ privateness. ZKPs may also be a useful constructing block for a lot of cryptographic protocols, making certain members observe the protocol’s specs. Privateness and scalability are enhanced with ZKPs as a result of solely sure knowledge is revealed and transacted with out disclosing all the knowledge that must be confirmed.
Based mostly on the ZKP expertise, STARKs, or Scalable Clear Argument of Data — invented by Starkware — is a sort of cryptographic proof expertise that makes it potential to speak knowledge with a 3rd social gathering — e.g., signal transactions with out revealing the information. It additionally permits shifting computations and storage of validated knowledge off-chain, thus rising scalability.
STARKs is a quantum-resistant system primarily based on hash features utilized by Ethereum, not elliptic curves utilized by Bitcoin. Importantly, STARKs methods are thought of extra superior than their predecessors, zk-SNARKs, and might resist assaults from quantum computer systems.
EC-STARKs: The following step in Bitcoin’s scalability?
Earlier, Starkware announced governance token issuance for its StarkNet — a decentralized permissionless STARK-based validity rollup that operates as an Ethereum layer-2 chain — to decentralize the community additional and preserve STARK expertise as a public good. Nonetheless, Ethereum’s underlying storage value constraints the scalability benefits of the expertise. Nonetheless, its utility for the Bitcoin blockchain might current a greater platform for decentralized purposes within the close to future.
Associated: zk-STARKs vs. zk-SNARKs defined
EC-STARKs are the following era of this expertise, aiming to extend Bitcoin’s scalability and safety by changing hash features with elliptic curves — i.e., making already-existing scalability options for Ethereum to be suitable with Bitcoin. With EC-STARKs, one can run an off-chain protocol for Bitcoin and hold proofs in STARK. Merely put, Bitcoin could be emulated inside STARK, permitting extremely subtle protocols to be constructed on Bitcoin-backed tokens with the identical elliptic curve keys.
Thus, using this expertise might not solely enhance the scalability of Bitcoin however function the gateway for builders to create DApps on Bitcoin, probably making a rival for Ethereum.
