The big debate right now among Bitcoin developers is: how much does the Bitcoin protocol change?All software, adding Bitcoin, will need to evolve over time as users, networks, and instances of use evolve. The query is not binary, but a matter of degree. .
Bitcoin has been in complete evolution, often more so than others. Perhaps the most radical changes occurred in the early years, when Satoshi specifically replaced the block length limit and the capability of Bitcoin’s programming language. Now that Satoshi is gone, it’s up to the core developers to reach a consensus on what tweaks to adopt in the future, which can be a contentious topic.
There is a set of adjustments that are not controversial, and they are adjustments that ensure the security of the network with virtually no foreseeable cost in terms of resources or opportunities. The most productive example of this is p2pkh, the use of public key hashing. When Bitcoin began, a Bitcoin address was a public key, a point on Bitcoin’s elliptic curve. To pay at this address, you would pay with this public key. After p2pkh, the Bitcoin address has become the hash of a public key, which is more secure because the public key passes through the SHA-256 hash algorithm. If an attacker were to break Bitcoin’s Elliptic Curve Digital Signature (ECDSA) algorithm, they would still want to break SHA-256 to retrieve the personal key that protects Bitcoin. Adding an additional hash operation is computationally trivial, so no one protested against p2pkh.
But other innovations aren’t so trivial. The most recent upgrade, Taproot, has particularly higher transactional complexity and privacy in Bitcoin transactions. But it also opened the door to new instances of use that I don’t think the core developers would have anticipated, such as ordinals and registries. Any major adjustments that expand Bitcoin’s capacity provide potential and problem risk. This would possibly allow for new instances of Bitcoin usage that were not available in the past, but with those new instances of usage also comes a larger attack surface.
This is the explanation of why Satoshi disabled some of Bitcoin’s early opcodes to intentionally restrict Bitcoin’s programming language. When the virtual object is money, the incentives for attacks are maximum, and therefore it makes sense to restrict Bitcoin’s programmability to restrict the attack. surface. At the same time, new features can attract new users.
This question about whether to upgrade the protocol and how is, in my opinion, the most important question in Bitcoin’s progress today and in the future. So here’s the essence of the debate.
The argument in favor of innovation comes from those who need to expand Bitcoin’s programming language to include a wide diversity of smart systems and contracts. These contracts are imaginable on other blockchains like Ethereum, and innovators must bring this capability to Bitcoin, the world’s maximum. secure network. However, there are other more conservative and classic Bitcoiners who also believe that expanding Bitcoin’s long-term monetary use cases will require more programmability and flexibility in scripting. This was part of Taproot’s motivation to enable larger monetary contracts in Bitcoin.
Part of the motivation to innovate comes from the preference for creating and experimenting, which is part of the culture of software developers at the giant (perhaps more evident outside of Bitcoin than inside). But sometimes another justification for the protocol is presented. Innovation: Bitcoin is not widely used enough nowadays, so the protocol will have to attract new users. These new users will have new instances of use, which will require new features in Bitcoin programming. It’s unimaginable to expect those instances of usage upfront, however, it’s imaginable to make larger Bitcoin scripts to allow for them in the future.
Proponents that the only innovation Bitcoin wants is greater security. For example, Bitcoin relay messages between nodes are not encrypted today. Therefore, encrypting those messages would be computationally affordable and increase security. But anything beyond that would only increase Bitcoin’s attack surface. which can generate problematic dangers that can alter the stability of the network and its use as a store of value.
If Bitcoin is going to generate billions of dollars in economic price over the next few decades, the main goal deserves to be stability and security, not innovation and experimentation. In fact, it is exactly Bitcoin’s predictable and immutable source of cash that distinguishes Bitcoin from central banks, which are constantly converting the source of fiat cash at will. The ossifiers’ banner is “If it ain’t broke, don’t fix it,” and the vast majority of Bitcoin inventions occurred in the 0. 1 edition written through Satoshi.
This debate is taking shape specifically in the proposed conventions, which allow restrictions on Bitcoin UTXOs. There are about 7 main proposals pending, and they differ in terms of characteristics and objectives. Some of them introduce new opcodes into the Bitcoin script that allow for the emergence of limited-use instances (such as OP_Vault), while others are more general and would allow clauses but also a wider diversity of systems in Bitcoin (such as OP_CAT). No consensus has yet been reached on which pact proposals, if any, are best.
Layer 2 inventions in Bitcoin add a touch of load. You would think that Layer 2 would have no effect on the underlying protocol. But if a layer 2 increases in terms of usage and influence, it will attract a social network that advocates converting the protocol, or parts of it, to have greater compatibility with layer 2. This is what has already happened with Lightning Network. La malleability of transactions has theoretically been a factor with Bitcoin, but it wasn’t until the Lightning Network. A network that has become apparent to all, leading SegWit to solve malleability by creating the witness knowledge structure. I expect this trend to continue, where inventions in the layer-2 and layer-3 technologies in most of Bitcoin will inevitably have an effect on the base-layer protocol in some way.
Let me end where I started: the question of whether or not to replace Bitcoin is non-binary, it’s still a matter of degree. I’m somewhere between the ossifiers and the innovators, but closer to the ossifiers.
First, the history of innovation shows that constraints placed on a challenge tend to motivate rather than hinder innovation. It may seem paradoxical, however, many of the company’s wonderful inventions were born in a restricted environment, such as the automobile. the transistor, the private computer, ARPANET, etc. Constraints have the power to concentrate the brain to propose a solution. In Bitcoin, for years, other people thought that sidechains were necessary for an innovation like prediction markets in Bitcoin. However, a recent progression called BitVM shows that prediction markets can be imaginable even without a separate sidechain. Therefore, I do not believe that removing restrictions on Bitcoin is mandatory for innovation, as existing history has already shown.
Second, innovation has positive prospects and risks of problems. No leading (registered) developer expects ordinals and registrations, so no developer can simply wait for the inventions that would come with expanding Bitcoin’s programmability. Sometimes, the voice of innovation, vital at Bitcoin developer meetings like Austin BitDevs, only the pros and not the cons are considered. So let’s be cautiously positive about those inventions and know that they have benefits and costs.
Third, Bitcoin’s current and most compelling use case, a scarce virtual store of value, is still in its early stages and does not require any tweaks to the protocol. Perhaps the most vital and exciting progression of Bitcoin is the transfer of legacy monetary assets to the Bitcoin network. ETFs were just the first step. Wealth and asset managers rank highly, followed by large institutional investors such as the pension budget and the sovereign wealth budget. As institutional attention to Bitcoin increases, it will have a greater impact on value and adoption than any new programmability. This movement, in my opinion, will take place slowly over time and it is vital not to interrupt it.
And as this price movement from analog to virtual occurs, it will eventually generate new use cases. It’s possible that the sovereign wealth budget simply requires new technologies in addition to Bitcoin that we can’t imagine lately, and the monetary effects will be significant. And in any case, it is a greater style of innovation: letting the desires of the users consult the development, than the other way around. So let’s let the virtual scarcity thesis spread and innovate above – and not over – the base layer.
Korok Ray, PhD is an associate professor at Mays Business School in Texas A.
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