As part of our on-going Tweetstorm Series, we showcase excellent Twitter threads on the most interesting topics in the industry and publish them here on Decentralize.Today.
Today we feature Alexander Leishman, the CEO & CTO of River Financial. He is a Bitcoin industry veteran having worked at multiple companies in the space. He has a Masters Degree in Computer Science from Stanford University and fell in love with Bitcoin after reading Friedrich Hayek's The Denationalization of Money. You can follow him on Twitter @Leishman for more of his excellent insights about Bitcoin.
Let's get started!
Bitcoin tech thread time! Here is some of the Bitcoin research and technical work that we're excited about at River Financial!
1. ERLAY: Significantly decreasing the bandwidth and increasing the connectivity of the Bitcoin P2P network.
Erlay, by Peter Wuille @pwuille, Greg Maxwell, Gleb, et al is a big deal. It DRASTICALLY reduces bandwidth requirements of running a full-node compared to the current flooding approach. Bandwidth no longer scales linearly with peer count, decreasing the cost of running well connected nodes. Take a look at this figure from their paper (https://arxiv.org/pdf/1905.10518.pdf…). With Erlay, a node with 32 peers uses only marginally more bandwidth than a node with 8 peers. With BTCFlood (the current approach) the node uses 4x the bandwidth!
Currently, every time a node receives a new tx, it announces it to all of its peers. This is highly inefficient because it creates a lot of redundant announcements. This chart shows the amount of data currently used for tx announcements by connectivity.
The insight behind Erlay is that nodes need only announce txs to a small subset of peers and then engage in an efficient set-reconciliation protocol periodically to detect any missed transactions. This set recon. protocol uses the Minisketch library previously announced. With Erlay it becomes way less expensive to run very well connected nodes, increasing the connectivity and security of the Bitcoin P2P network. Great work to everyone involved!
3. Discreet Log Contracts (DLCs): Create off-chain contracts for any arbitrary price feed that settle cryptographically on-chain with a simple signature. @chris_stewart_5, @Suredbits and @dglab_official are doing great work on designing DLC standards. The magic of Schnorr! Maybe we'll see a River Financial DLC oracle in the future. Who knows what could happen?
4. Expressive Taproot Contracts: With tapscript and schnorr signatures/multisig we can build a large number of more interesting multi-party contracts. Bitcoin DAO anyone?
6. ELTOO: The @Snyke and @roasbeef proposal to rid ourselves of the toxic waste in today's lightning channel construction. More details HERE.
7. Zero-knowledge Contingent Payments: Atomically swapping Bitcoin for provable information/solutions. Lots of cool stuff left to explore here! Check out more info in the wiki page.
8. Proof of Reserves: This is proof that you actually control at least a particular amount of particular assets, especially important for exchanges holding Bitcoin and other assets. Will 2020 be the year a Bitcoin company gets Nic Carter @nic__carter to stop talking about Proof of Reserves? Partially Signed Bitcoin Transactions (PSBT) and other standards are making it easier to operationally accomplish things like this.
9. Key-send & spontaneous payments in Lightning Network: Soon we will be able to send lightning payments to a public key instead of requiring recipients to first generate invoices. This should SIGNIFICANTLY reduce the friction of using Lightning!
This allows users to start exploring a new set of use cases that benefits from this type of spontaneous payment. The payment can also carry additional application-specific data such as an account ID, API call, etc. This new feature requires the new EOB (extra onion blob parsing) implemented here. The coolest part about this new feature is that it can be used today in the wild as long as both nodes are updated to this branch!
More info HERE.
10. Standardization around Schnorr threshold signatures: Mu-sig gives us n-of-n. Looking forward to m-of-n standards.
About The Author
Alexander Leishman is the CEO & CTO of River Financial. He is a Bitcoin industry veteran having worked at multiple companies in the space. He has a Masters Degree in Computer Science from Stanford University and fell in love with Bitcoin after reading Friedrich Hayek's The Denationalization of Money.
River Financial is a San Francisco based firm dedicated to helping people invest in Bitcoin. They provide their users with premium customer service and access to cutting edge Bitcoin features.