From the economic point of view, 2017 has been pretty beneficial for bitcoin. The most known cryptocurrency grew by around 1,400% last year as well as it experienced the all-time surge up to $20,000. However, bitcoin’s scalability issue has not been solved yet. Some experts consider bitcoin as a clumsy cryptocurrency due to its overloaded, blockchain, which leads to high transaction fees and extended transaction confirmation time. So here are top-5 most perspective innovations in 2018 that may carry the bitcoin blockchain technology forward.
1. Goodbye High Transaction Fees With SegWit
In May 2018 the Bitcoin Core 0.16 is expected to allow customers of the wallet to conduct SegWit transactions. Moreover, such giant bitcoin services as Coinbase are also looking forward to modernizing to this soft fork as well.
SegWit (Segregated Witness) has been one of the most prominent bitcoin’s protocols update until today. Firstly, it was activated back in August 2017 and was aimed at solving the scalability bug. It corrected some malleability issues and substituted Bitcoin’s block size limit with a block weight limit. This way, the number of transactions has grown in the space of the net. Hence transaction fees decreased. Nevertheless, bitcoin community remains quite skeptical about SegWit’s adoption, but it has a lot of perspectives in 2018.
2. The Lightning Network to Solve Bitcoin’s Problems
Sure enough, SegWit is expected to lower transaction fees and validation time, but indeed the long-term scalability problem could be solved by the adoption of the Lightning Network. Developers have been working on this solution for the past two years. There was some advancement in 2017, but LN is more likely to be launched within 2018.
Representatives of Lightning, a second-layer solution on top of the blockchain, have claimed that some wallets and exchanges are already planning the testing and adoption of the solution. Once they have achieved this goal, lots of bitcoin enthusiasts will enjoy almost free of charge transactions as well as immediate operations confirmations alongside with the high level of security.
3. TumbleBit and ZeroLink to Fight For Privacy
Though it may sound awkward, currently bitcoin isn’t as private as it could be. The open blockchain allows anybody to see the transactions added to it, so the leaks of secret information can occur. However, the issue could be fixed in 2018. By March the blockchain platform Stratis plans to launch the TumbleBit technology in its developing Breeze wallet.
TumbleBit is a protocol that exploits unique cryptographic stunts make sure that the tumbler doesn’t link different users with each other. Payment channels between users are created with the tumbler in a single paddling session.
The cheaper solution to bitcoin’s privacy problem is ZeroLink. Not like TumbleBit, it creates only one transaction between all users, and it uses the central server to link them with each other. This solution is anticipated to be implemented within a few months.
4. Bitcoin to Compete With Altcoins With More Sidechains
Participants can efficiently sort of move bitcoins to chains that function under entirely otherwise rules. These are sidechains – alternative chains with coins connected with particular bitcoins. They can provide users with more speedy verifications, a higher level of privacy, broader smart contracts opportunities or anything else that nowadays can offer altcoins.
There are some sidechains, which will soon be released. For example, Liquid chain is right now in beta, but the 1.0 launch is possible in 2018. Another side chain – RSK – could make bitcoin as flexible as ethereum. It is also in closed beta currently, but the public release may happen very soon.
5. Fewer Problems Thanks to Schnorr Signature
Another solution to bitcoin’s scalability problem could be the Schnorr signature algorithm. It allows various signatures to combine into one signature. This means that a single crypto signature can prove the ownership of numerous bitcoin addresses. Schnorr signatures are fast to confirm, they don’t suffer from ductility and are profoundly correct.
A specific bitcoin advancement offer for Schnorr signatures is also anticipated in 2018. However, it remains unclear whether such signatures will be utilized on bitcoin’s blockchain. The problem with it is that it will be necessary to update soft fork protocol. Furthermore, a lot will be at stake when it comes to testing and peer review.