Bitcoin New Technology Development: From Conflict to Resurgence

Bitcoin, as the first and most important cryptocurrency, has always attracted attention for its technological development. This article will outline the main conflicts of Bitcoin's original technology, the development of important new technologies, and the future directions and demands for its use.

1. The Main Exploration and Conflicts of Bitcoin's Original Technology

The original technology of Bitcoin has a conflict between large-scale application and the capability it should have. With technological development, many problems have been answered more clearly.

1.1 The scripting language of Bitcoin and instruction reduction

Bitcoin uses a reverse Polish notation scripting language, which is not Turing complete. This design has its pros and cons:

Advantages:

• Avoid dead loops and DOS attacks
• Improve network security

Disadvantages:

• Unable to run complex programs
• Limited functionality

Bitcoin has undergone multiple command reductions throughout its history, including string operations, bitwise logic, arithmetic logic, and more. The purpose of this is to make the underlying protocol more fundamentally stable.

1.2 Bitcoin forks history, reasons, and significance

Bitcoin has undergone multiple forks, primarily centered around the block size debate. Representative events include:

• In September 2010, Satoshi Nakamoto added a 1MB block size limit.
• In 2015, BitcoinXT proposed to increase the block size limit to 8MB.
• The BCH fork increased the block size to 32MB
• The BSV fork increased the block size to 128MB.

These forks are explorations in the development process of Bitcoin, trying to meet more demands through their own changes.

1.3 Several Typical Explorations in the Development of Bitcoin

1. Colored Coins(: By adding special annotations to Bitcoin to represent a broader range of assets.

2. MasterCoin)OMNI(: Establish a full node layer to maintain the state model database by scanning the Bitcoin blocks.

3. CounterParty: Use OP_RETURN to store data, achieving functions such as asset issuance and trading.

) 1.4 The Imperfections of Bitcoin and Layered Protocols

Main limitations of Bitcoin:

1. The UTXO account model is not conducive to implementing smart contracts.
2. Non-Turing complete scripting languages have limited functionality
3. Centralization of Mining Issues
4. Scalability Issues

From the perspective of layered protocols, these characteristics are more suitable as a bottom-level network. Bitcoin is suitable as a layer one network infrastructure, rather than directly satisfying all user needs.

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2. Important New Technologies in the Development of Bitcoin

) 2.1 OP_RETURN

OP_RETURN is a script opcode that allows for the storage of arbitrary data in Bitcoin transactions. Its functionality has undergone several changes:

• Initially used to terminate script execution prematurely
• Bitcoin Core v0.9.0 made it a standard output type
• Data length limit increased from 40 bytes to 80 bytes
• BCH expanded to 220 bytes
• BSV will raise the limit to 100KB

2.2 Segwit

Segregated Witness ### solved the following problems:

1. Transaction Scalability Issues
2. Reduce the data volume of SPV proof
3. Implicitly increase block capacity

Segregated Witness introduced the concept of block weight (, effectively expanding the block size from 1MB to 4MB.

) 2.3 Taproot

Taproot includes the following main technologies:

1. Schnorr Signatures: A replacement for ECDSA, improving efficiency and privacy.
2. MAST(Merklized Abstract Syntax Tree): Optimize transaction data storage
3. Tapscript: Expand Bitcoin's native scripting capabilities

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) 2.4 Ordinals, Inscriptions, BRC20 and other protocols

The Ordinals protocol assigns a unique number to each satoshi, and Inscriptions inscribe data onto satoshis, combining the two to form the Bitcoin NFT standard.

BRC20 is a fungible token standard created on the basis of Ordinals.

Other derivative protocols also include Atomicals, ARC20, Runes, BTC stamps, SRC20, and so on.

3. The Use of New Technologies and Future Development Needs

3.1 How to Use New Technologies

The essence of Bitcoin technology development is block expansion and capacity expansion:

• Block expansion: Technologies such as Segregated Witness have achieved de facto block expansion.
• Capability expansion: Taproot, Schnorr, MAST, Tapscript, etc. have expanded the functionality of Bitcoin.

Currently, applications are mainly focused on simple uses after blockchain expansion, such as NFT and token issuance. In the future, there will be more applications with expanded capabilities.

( 3.2 Future development needs

1. Short-term: Complete the main capability expansion to meet financial application needs.
2. Medium term: Improve layer two construction to meet the needs of financial and trust applications.
3. Long-term: Build a complete Web3.0 ecosystem

The large-scale applications of the future Web 3.0 era may be built on the Bitcoin ecosystem, but they require long-term continuous technological accumulation and infrastructure construction.

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