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How Utreexo could make Bitcoin more scalable and efficient



In response to the question of potential scaling solutions on Bitcoin, by Aaron Van Wirdum, founder of Coincourant, who is also the host of the panel discussion at the Bitcoin 2023 Miami event, Tadge Dryja, co-inventor of the Lightning Network, revealed that he has been working on Utreexo for years. He added that one reason it is not a popular tool is that he has not given much talk about it,

Bitcoin has faced scalability issues due to the storage of every user’s account on every computer in the network. The transaction history is large but not a scalability concern, while the system state has grown over time. 

Utreexo is a solution that uses a small, hash-based dynamic accumulator to represent unspent outputs, reducing the size of the system state. The burden of tracking funds is shifted to the owner, who maintains proof of ownership. 

While these proofs add data transmission overhead, they enable a smaller system state. Utreexo allocates network maintenance costs based on the number of transactions, ensuring scalability for different users. The accumulator size grows slowly as the set size increases, providing a long-term scalability solution.

Tadge noted that Utreexo is simply a tool that makes running a fully validating node easier, smaller, and more compact. He said that the idea is based on the fact that more people own Bitcoin than there are validators because the hardware requirement is still enormous. As Utreexo takes “up very little space on your computer,” it will encourage more people to become validators on the Bitcoin network.

Bitcoin programmability and Bitcoin CTV proposal

Jeremy Rubin, the founder of Judica, suggested that the Bitcoin protocol needs more programmability at its base layer than what it has today. This will provide the foundation to create more functionality for users by providing a “fully self-sovereign experience of the chain through a second layer.” 

Jeremy noted the goal of improving the base layer is that it becomes a good spot where developers can build everyday tools that people can use. “I think we need to build the platform first and then allow anybody to build what they want to build to scale Bitcoin’s humanitarian goals.”

Speaking about Bitcoin CTV (OP_CHECKTEMPLATEVERIFY), Jeremy noted that he wanted to achieve privacy, scalability, self-sovereignty, and decentralization when he started working on it. OP_CHECKTEMPLATEVERIFY (CTV) is a proposed opcode in Bitcoin that introduces a commitment hash parameter. 

When this opcode is used in a transaction, it enforces that the transaction must include outputs that correspond to the specified commitment. This enables the creation of an address that determines how funds received at that address can be spent. 

While it was previously known as OP_CHECKOUTPUTSHASHVERIFY (COSHV), the proposal aimed to enable congestion control transactions. In this approach, a spender would pay a single address using CTV. Once the transaction is confirmed to a certain depth, it assures multiple receivers that they can each be paid. 

This two-step process can be utilized in situations where payment batching is possible, and it has the potential to reduce fees even more effectively than payment batching alone. The use of CTV in congestion control transactions offers a mechanism for optimizing fee costs while ensuring timely and reliable payments to multiple recipients.

Allow huge changes in Bitcoin

For Amiti Uttarwar, the first known woman Bitcoin Core contributor, the Bitcoin community needs to be freer to propose and apply huge changes to Bitcoin. “Bitcoin is still extremely young, and for this vision of what it can be” and for us to achieve that dream of making it the money of freedom, there is a lot that needs to be done at the base layer level. 

She added that while it’s exciting to see the expansion and growth that is taking place in the Bitcoin ecosystem, it is vital to “encourage more radical thought and interesting conversation and debate” around Bitcoin.

Jeremy in addition to what Amiti said, pointed out that the changes that should be introduced should be those that benefit the protocol, as “bad changes are bad.”

Tadge added that while it’s good for the ecosystem to adapt to changes, he thinks it’s very hard to implement these changes, and that’s why ossification may be on the horizon for Bitcoin, as that is what happens when a system gets bigger. Ossification here refers to the process of becoming rigid, inflexible, or resistant to change.

Read also;

How Bitcoin can beat debt colonization in developing countries

How Bitcoiners should deal with regulators


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