The Bitcoin network has been facing numerous problems regarding being able to facilitate timely transactions along with reasonable transaction costs, and many are quick to point out these issues and the other many flaws of the pioneer cryptocurrency.
While it is not arguable that the issues do exist, writing Bitcoin off altogether as a viable cryptocurrency is unfair in the opinion of neutral parties, who, while not supporting Bitcoin for its problems, objectively point out the future adoption of updates that could address the presented issues, including but not limited to the ones regarding transaction time and cost.
Segregated witness (Segwit)
Whenever a list of this sort is put together that talks about important updates on the Bitcoin Network, there are chances that Segregated Witness (SegWit) would be in the top three at the very least.
SegWit had been implemented on the Bitcoin Network in August 2017. Along with fixing other issues, the implementation most essentially updated the network’s block size limit with a block weight limit, which in turn allowed more transactions to be performed throughout the network.
That allowed resolving the delays in transaction time, and as a result, the problem of higher transaction fees.
However, users have not been able to see this update perform in its full capacity because it has not been adopted yet by most wallet and cryptocurrency exchanges (most infamously by Coinbase, which had been accused of doing it deliberately).
Once more institutions and applications start adopting this implementation, users will undoubtedly see a stark difference in the network’s performance.
The Lightning Network
With the Lightning Network making its debut as a test deployment on Bitcoin network, it is apparent that the pre-funded payment channel mechanism is closer to fruition than most people had thought earlier.
The Lightning Network, first proposed in 2015, is supposed to open more payment channels for quicker transactions. Using the network’s capabilities, users can pre-fund these payment channels and have their balances adjusted accordingly.
A user can then utilize any of the pre-funded payment channels for faster transactions, and their balance will be adjusted as before.
Because these payment channels exist off the blockchain, they allow for faster transactions with lower transaction fees.
The Lightning Network is still in development, but once deployed completely, it is meant to resolve the current issues efficiently.
Another update, which has not yet been implemented and only proposed, is the adaptation of Schnorr Signatures on the Bitcoin network.
Schnorr signatures are considered as some of the best cryptographic signatures currently utilized. Their use of the Bitcoin network is going to be beneficial for several reasons. Due to their optimal balance of correctness and faster verification, the network transaction verification time will reportedly be cut by more than 30 percent.
This implementation will ensure that the network is using signatures that are immune to malleability but which also make the scalability issues easier to resolve. That, in turn, would work towards solving the overall problems that we have mentioned above.
While being a truly public blockchain has its benefits, that distinction and achievement also comes with, what some call, the network’s flaws.
One such arguable aspect regarding the Bitcoin network is its lack of privacy since all transactions are posted on the public blockchain where anyone could view them easily.
While this is still posted in a cryptic format, a close analysis by someone who is looking for specific details is enough to reveal information regarding the sender and the beneficiary.
This has caused a few people to feel nervous about their transactions over the network in the past couple of years, and the solution has been proposed as TumbleBit, a coin-mixing protocol.
Proposed in 2016, the solution is aimed towards using a tumbler to create payment channels to and from the users in a single “mixing” session. This essentially renders the actual transaction’s information to be unidentifiable through malicious sources while also using top-level security to ensure that a link between such users is preventable otherwise.
This technology is currently in the works for Bitcoin network and might get released in early 2018.
These are some of the most important updates to watch out for
There are several more updates out there that are either proposed or have already been implemented. We listed the ones above because they seem to be the most necessary updates for issues that the network needs to be resolved promptly.
Most of all, this signifies that the Bitcoin network has not been abandoned. While the Bitcoin’s “digital gold” status is to be celebrated, the people associated with the cryptocurrency want it to flourish in its original capacity as well, and it seems that it will be achievable shortly.