Off-Chain Contracts – Bitcoin Magazine

Taproot is currently the most likely next upgrade for Bitcoin. It is one of a few upgrades that are currently being worked on that users and developers would hope to eventually see activated on the network.

All of these upgrades share a general theme that will likely be the theme of many future upgrades as well. This theme is making contracts unicast, or more simply put, moving contract logic off-chain, and leaving it up to the user, instead of the network, to validate and enforce their contract. Moving to a more unicast system will make Bitcoin much more private and scalable while still keeping Bitcoin’s more important properties intact.

These types of upgrades and systems are perfect for Bitcoin. Bitcoin is simply a monetary network, not a computation network. Being a monetary network, its primary function should be to validate that its monetary system is being correctly enforced. In Bitcoin terms, checking that users correctly signed the transaction and that they did not violate the monetary policy should be the primary function of the system, and anything more should be moved to higher layers and only done between the users that are using Bitcoin for more than financial settlement.

MuSig And Unicast Contracts

MuSig is one of the best understood applications of moving contract logic to be unicast. MuSig allows users to make a multisig output look like a standard user’s single sig output. This is done by having users construct keys and signatures off-chain and having them do some cryptographic operations that result in a single public key and signature. This is a huge improvement compared to a normal multisig, where the users need to broadcast all of their public keys and signatures. By doing a normal multisig, the users offload their contract validation to the network, requiring it to validate and store it indefinitely. Instead, with a MuSig, the users do the enforcement themselves by constructing signatures between…

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