Cypto Insights

Discussion topics from the Open-Source Stage of the upcoming Bitcoin 2024 event have been announced. This article highlights some technological breakthroughs to watch, including innovations from the past year (Unlocking Expressivity With OP_CAT, BITVM), privacy issues (Bitcoin's Legal Battle for Privacy, Cross-Input Signature Aggregation), and Bitcoin Free Banking (ecash).
For more details, see the full conference agenda.

Developer Peter Todd disclosed an extremely low-cost relay attack on the Bitcoin development mailing list (referred to as the Free Relay Attack). This attack exploits the lack of full RBF (Replace-By-Fee) in Bitcoin Core, broadcasting transactions with different fee rates at an exceptionally low cost, taking advantage of policy differences between Bitcoin Core nodes and miners, leading to node bandwidth waste.
Peter Todd said he had reported similar relay attack issues to the Bitcoin Core, but the team closed his PR proposing to enable full RBF by default, without showing any due attention to this issue.

Peter Todd mentions that he is working on the math of opening about 10 billion channels per year using the current Lightning technology.

StarkWare announced their first successful verification of zero-knowledge proof on the Bitcoin Signet network using a new STARK verifier. This development paves the way for ZK-based Bitcoin layer 2 solutions, enhancing Bitcoin's scalability and advancing global payment prospects.

RGB++ Layer Upgrade: This upgrade expands the relationship between Bitcoin and CKB to all UTXO chains. RGB++ protocol has been abstracted and stands alone as a layer combining all UTXO chains, serving as a universal, cross-chain interoperable UTXO middleware. It enables not just CKB, but any Turing-complete UTXO chain to integrate as an indexer.
Beyond Cross-Chain: Unlike traditional bridges that create 'fake coins' on side chains, RGB++ uses a 1:1 interaction between chains, eliminating the need for any 'cross-chain' action.
Bitcoin Finance (BTCFi) : The RGB++ Layer upgrade aims to promote the growth of BTCFi by enhancing interoperability and functionality across UTXO chains.

Native Layer 2 Scalability: UTXO Stack introduces a Bitcoin-native, programmable Layer 2 solution that aligns seamlessly with Bitcoin's UTXO model, unlike non-native solutions that require patches for compatibility and often rely on centralized services.
Innovative Isomorphic Binding: The RGB++ protocol features Isomorphic Binding, a technique that maps Bitcoin UTXOs to eUTXOs on the RGB++ Layer, enabling smart contract capabilities without the need for separate client-side validation, thus enhancing user-friendliness.
Bridgeless Cross-Chain: A standout feature of the RGB++ protocol is the ability to transfer assets across chains without traditional bridges, but relying on a "leap" where asset ownership is bound to UTXOs, allowing assets to move to another chain when the UTXO of that chain is used to unlock them.

With the advent of RGB++ Layer and UTXOSwap, the IBO (Initial Bitcoin Offering) emerges as a secure method for asset issuance on UTXO chains.

Secure and Community-Driven: IBOs enable projects to raise funds securely, with the capital locked for liquidity creation on UTXOSwap and Liquidity Provider tokens locked for a year. The majority of tokens are distributed to the community through staking, fostering quick circulation and eliminating continuous VC unlock pressures.
Fair Pricing and Smart Contract Protection: Prices are set at seed round levels, giving the community equal opportunities. The use of a bonding curve ensures that if the sale isn't completed in time, funds are automatically refunded, safeguarding participants.

In this study, Daniel Batten challenges the claim that Bitcoin mining results in electronic waste, contending that the assertion is inherently flawed. He highlights that the recycling of obsolete ASICs is quite profitable. Additionally, ASICs are free of heavy metals, easily recyclable, and contribute minimally to landfill waste. Moreover, they possess a longer service life, being 2.76 times more durable than the average smartphone.

Mason Mystrom from Variant Fund outlines several common cryptocurrency business models, which are:
- Exchange and marketplaces — fee on transactions
- Transaction sequencing — own and monetize valuable order flow
- Asset managers — fee on assets under management or yield generation

Satoshi Scoop Weekly, 26 Jul 2024