Many believe Bitcoin remains static due to its immutable architecture. With no clear roadmap beyond its halving schedule, predicting Bitcoin's future is challenging. However, Bitcoin can go through upgrades through community consensus. If a majority of full nodes agree, Bitcoin can implement upgrades via soft forks, introducing new functionalities.
This article examines Bitcoin's major past upgrades and explores OP_CAT, the anticipated next significant upgrade. Let’s delve into the significance of these upgrades and explain why they represent crucial milestones in Bitcoin's history.
The SegWit upgrade, implemented in August 2017, was Bitcoin's first major attempt to address scalability issues. Prior to SegWit, Bitcoin blocks stored a combination of signature and transaction data. This approach was inefficient, as the space allocated for signatures was disproportionately large compared to the actual size of the signature data.
Two opposing solutions emerged: one group advocated for increasing Bitcoin's block size, while the other sought to maintain the existing block size but improve efficiency. SegWit, the latter solution, separated signature data from transaction data through a core logic upgrade. It created a separate storage space called the "witness area," allowing more transaction data to be recorded in each Bitcoin block.
As a result of the SegWit upgrade, the amount of transaction data that could be stored in each block increased fourfold. This improvement led to faster transaction processing and reduced fees.
Source: What Is Segregated Witness (SegWit)? | River
Taproot, implemented in November 2021, marks another significant Bitcoin upgrade following SegWit. This upgrade enhanced Bitcoin's efficiency and privacy by introducing the Schnorr Signature and Merkle Abstract Syntax Tree (MAST).
Previous to Taproot, Bitcoin's signature method relied on the Elliptic Curve Digital Signature Algorithm (ECDSA), which required one signature per transaction. This approach led to increased signature data size and easier transaction tracking when multiple wallets sent funds to a single address.
Schnorr signatures address ECDSA's limitations by combining multiple signatures into one unique signature. This dramatically reduces the proportion of signature size in a block. Moreover, even transactions with multiple functions appear as a single transaction, bolstering user privacy.
Additionally, the Merkle Abstract Syntax Tree (MAST) allows Taproot to process complex Bitcoin transactions more efficiently. It does this by introducing logic that extracts and verifies only the hash values of required scripts.
Unlike the SegWit upgrade, Taproot was implemented with near-unanimous support from the Bitcoin community.
Source: The Bitcoin Taproot Upgrade Explained | Paxful University
OP_CAT is being widely discussed as Bitcoin's next upgrade. It's a simple 13-line code that Satoshi deactivated in 2010 to protect Bitcoin from DDoS attacks. OP_CAT allows the concatenation of multiple elements in the Bitcoin system. Today, there's a push to reintroduce OP_CAT with safeguards against DDoS attacks, such as limiting replication size. This reintroduction, known as BIP-420, could be a significant milestone for Bitcoin's ecosystem, enabling various developments including Layer 2 solutions.
As highlighted in "The Real Way to Scale Bitcoin with L2," Bitcoin's script is stateless. However, combining OP_CAT with Schnorr signatures could allow Bitcoin to enforce specific actions and verify state changes. This is crucial because blockchain fundamentally stores states. If state changes can be confirmed within Bitcoin, it opens the door for internal smart contracts. Furthermore, OP_CAT could enable STARK verification, facilitating Bitcoin deposits and withdrawals through zero-knowledge proofs. Starkware has already demonstrated zero-knowledge proof via STARK on Bitcoin Signet. Many anticipate a soft fork to introduce OP_CAT in the near future, potentially revolutionizing not just the Bitcoin ecosystem, but the entire crypto landscape.
Source: How Op_CAT Plays into the Bitcoin's History | Trust Machines
The direction of the next upgrade after Bitcoin will be an upgrade that directly helps expand the Bitcoin ecosystem rather than improving its inefficiency. The meaning of unlocking the potential of Bitcoin is way beyond than just emergence of another ecosystem. Expanding Bitcoin ecosystem will open the way to integrate the fragmented blockchain space into one, taking advantage of synergy with the Ethereum ecosystem. As the clues to the scalability of Bitcoin are unraveled one by one through future upgrades, the Bitcoin ecosystem will inevitably expand. Here, we need to think about what the financial system of the future will look like once more.
Bitcoin is renowned for its resistance to change, with past disagreements resulting in forks like Bitcoin Cash and Bitcoin SV. The proposed OP_CAT addition, while controversial, promises an impact greater than any previous upgrade.
The introduction of OP_CAT to Bitcoin could enable secure scaling solutions, fostering a robust Bitcoin ecosystem. Its ability to concatenate multiple elements allows for proof verfication including zkRollup deployment. For example, Starkware recently tested a STARK-based zkRollup on the testnet.
Gold's value stems from its scarcity and recognized utility. Similarly, Bitcoin, now firmly established as "digital gold," is entering a new phase where its applications are being explored. With the OP_CAT upgrade, this digital gold could become the foundation for building digital infrastructure and finance.
Related Articles, News, Tweets etc. :
Dive into 'Narratives' that will be important in the next year
Bitcoin
Solana
Gradient