For all the great that Bitcoin brings to the desk, it additionally possesses a generally accepted challenge 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 present, verification of the ECDSA, a Bitcoin signature permitting to hold out transactions and ship Bitcoin (BTC), isn’t environment friendly and limits the scalability of the Bitcoin blockchain. A possible answer is utilizing zero-knowledge proof (ZKP) expertise, permitting larger levels of privateness and safety.
A current Starkware paper presents the tactic for effectively verifying ECDSA from throughout the STARK ecosystem, doubtlessly resolving the blockchain trilemma for Bitcoin — i.e., reaching scalability, safety and decentralization concurrently.
Foundations of the expertise
A ZKP is a cryptographic method that permits the prover to substantiate one other individual’s declare with out supporting knowledge. ZKPs are cryptographic protocols that preserve third events away from customers’ privateness. ZKPs can be a useful constructing block for a lot of cryptographic protocols, guaranteeing contributors comply with 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 data that must be confirmed.
Primarily based on the ZKP expertise, STARKs, or Scalable Clear Argument of Information — invented by Starkware — is a kind of cryptographic proof expertise that makes it doable to speak knowledge with a 3rd get together — e.g., signal transactions with out revealing the information. It additionally permits shifting computations and storage of validated knowledge off-chain, thus growing scalability.
STARKs is a quantum-resistant system based mostly on hash features utilized by Ethereum, not elliptic curves utilized by Bitcoin. Importantly, STARKs programs are thought-about extra superior than their predecessors, zk-SNARKs, and may resist assaults from quantum computer systems.
EC-STARKs: The subsequent 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 software for the Bitcoin blockchain could current a greater platform for decentralized purposes within the close to future.
Associated: zk-STARKs vs. zk-SNARKs defined
EC-STARKs are the subsequent technology 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 appropriate with Bitcoin. With EC-STARKs, one can run an off-chain protocol for Bitcoin and preserve proofs in STARK. Merely put, Bitcoin will be emulated inside STARK, permitting extremely refined protocols to be constructed on Bitcoin-backed tokens with the identical elliptic curve keys.
Thus, using this expertise could not solely enhance the scalability of Bitcoin however function the gateway for builders to create DApps on Bitcoin, doubtlessly making a rival for Ethereum.