Satoshi Scoop Weekly, 6 Dec 2024

Crypto Insights

Flexible Coin Earmarks

Flexible Coin Earmarks allow the value of a single UTXO to be split across separate purposes. Each purpose is an "earmark" which can be executed by publishing a transaction that spends the coin, satisfies specific conditions placed on it, or creates a new output which is also an earmarks. These earmarks are updated independently by modifying the UTXO and, under certain conditions, can be replaced wholesale.

Implementing a Bridge Covenant on OP_CAT-Enabled Bitcoin: A Proof of Concept

This proof-of-concept demonstrates how to develop a bridge covenant on OP_CAT-enabled Bitcoin using the sCrypt embedded DSL. The bridge leverages recursive covenants and Merkle trees to batch multiple deposit and withdrawal requests into a single root transaction, which integrates with the main bridge covenant. This enables efficient batching while maintaining integrity and security of the user account. Through four smart contracts—DepositAggregator, WithdrawalAggregator, Bridge, and WithdrawalExpander—the scheme manages stateful interactions on Bitcoin and enhances interoperability with Layer 2 networks like Starknet.

Radpool: A Syndicated Decentralized Mining Pool

Radpool decentralizes a mining pool by splitting a centralized entity into multiple Mining Service Providers (MSPs), each serving its registered miners. This design addresses scalability challenges of purely P2P mining pools, enhances decentralization, and strengthens resilience against transaction censorship.

FROST, The Production Impact and Why It Matters

FROST (Flexible Round-Optimized Schnorr Threshold Signatures) protocol reduces the number of communication rounds required in Schnorr signature schemes, saving bandwidth, time, and reducing error probabilities. Cryptographers, protocol developers, and Bitcoin builders discuss its potential to reshape Bitcoin security and its application by Bitcoin companies.

Shielded CSV: A Private and Efficient Client-Side Validation Protocol

Blockstream researcher @n1ckler introduced zkCSV, a private and efficient client-side validation protocol. Unlike existing protocols, zkCSV requires only 64 bytes of on-chain space and ensures complete privacy. Its communication costs between sender and receiver are independent of transaction history. zkCSV can scale Bitcoin to 100 transactions per second using minimal-trust mechanisms like BitVM2, bridging blockchain and client-side verification protocols while enhancing privacy.

Latest in Zero-Knowledge Research with Dan Boneh

In this podcast episode, Stanford Professor Dan Boneh explores the latest advancements in zero-knowledge proofs across various fields, including lattice-based SNARKs, ZK for content provenance, ZK in FHE (Fully Homomorphic Encryption) and machine learning.

Top Reads on Blockchain and Beyond

Ark Protocol: Instant Settlement Using Spillman-Style Channels

Among early payment channel proposals, Spillman-style channels offer a simpler, unidirectional approach with advantages such as no requirement for both parties to be online. (Learn more from BitcoinJ's Working with micropayment channels). Unlike Lightning channels, unidirectional channels come with significantly reduced risks and overhead, but are limited in scalability. An average user is likely to have multiple counterparties, and the on-chain costs associated with setting up channels can become unsustainable over time.

Ark leverages Spillman channel architecture in its VTXO (virtual transaction output) scripting, allowing efficient off-chain use cases beyond single-signature contracts.

Non-Custodial Ecash Mints Based on Spillman Channels

This proposal introduces a self-custody credit system for existing ecash mint. Users' balances are stored in a trustless credit contract and converted to ecash coins off-chain at payment time, with custodial risk existing in a few seconds during transactions. If the mint becomes uncooperative, users can unilaterally exit and reclaim their credits on-chain.

Oracle-Assisted Covenant Emulation via BitVM Integrity Checks

Functional Encryption (FE) offers an exciting avenue to implement covenants without native protocol changes; however, FE remains impractical with current cryptographic tools.

This work proposes "Un-FE'd Covenants," a practical implementation of covenant emulation using oracle-assisted model, combining off-chain computation, key management, and BitVM-based incentives to execute covenants without requiring a Bitcoin soft fork.

Unlike existing approaches for covenant emulation, the oracle signers put up bonds to BitVM auditors subject to a BITVM style fraud proof, whereby their funds can be stolen if the emulator oracle ever signs a transaction in violation of the covenant rules.

Beneath the Iceberg: Centralization Factors in Ethereum's Protocol

This article examines Ethereum's protocol structure, explains why its modifications consistently take the form of hard forks, and further explores how this reliance on hard forks contributes to the centralization of the community. It provides a critical perspective on state inflation and stateless Ethereum research.

This research originated three years ago from a study on "Stateless Ethereum," a technical approach aimed at addressing the state explosion issue. However, when you realize that all protocol changes ultimately come down to defining gas consumption rules—and that the design of gas consumption so strongly shapes a developer-centric power structure—it becomes difficult not to feel fatigued.

• Full article: Beneath the Iceberg (冰山之下) (in Simplified Chinese)

• Related research: State Explosion and Statelessness (in Simplified Chinese)