Bitcoin has been accused many times in the recent past of lacking innovation and quality developers working on its core protocol.

However, if you look at whats going on under the hood, youll see a great deal of exciting new features have been added over the last few years, with even more scheduled for this year.

For example, last year, blockchain technology company Blockstream released Miniscript, a new scripting compiler for Bitcoin that aims to improve its programmability without compromising security.

Recent technology proposals include Schnorr signatures (a new signature scheme), MAST (a brand new Merkle tree data structure), and Taproot, which offers a way to allow all participants to agree on an outcome and sign off on a settlement transaction.

These three developments alone would greatly improve Bitcoins fungibility and privacy-preserving functions.

In this article, I will discuss how these technologies work and what we can expect from Bitcoin after they have been implemented.

MAST, or Merkelised Abstract Syntax Trees, provides the ability to lock BTC using P2SH in different scripts all linked to the same Merkle tree.

This technology was developed by Blockstream developers Russell OConnor, Peter Wuille, and Peter Todd.

P2SH, or Pay to Script Hash, simply lays out a path to create an address which contains a script. You lock up your BTC in a script (output) that can be unlocked by the right key (hash).

A script is nothing more than a list of instructions recorded with each transaction that describe how a peer may unlock those Bitcoins.

A Merkle tree is essentially how Bitcoins data structure technology has been designed. It is a mathematical structure that hashes different sets of data into a single hash.

MAST is essentially P2SH combined with Merkle tree technology.

With MAST, the same set of Bitcoins (one input) can then be linked to many scripts containing different conditions for unlocking those Bitcoins.

Essentially, MAST extends Bitcoins smart contract flexibility, improves scalability, and increases privacy.

Taproot creates signature outputs which contain instructions about what happens when conditions are met.

Essentially, Taproot technology adds similar smart contract-like functionality within the Bitcoin network. Users can add logic to transactions through scripts that are outputted as simple payment transactions.

Taproot is best used with the P2SH functionality as it reveals only the part of the script youre going to use under the assumption that youre going to split your script into a collection of disjunctive statements.

It allows for the signees to only reveal a log scale number of branches. This gives users considerably more privacy and increases scalability as no extra storing requirements are needed.

Taproot technology works to make Bitcoin transactions look exactly the same on any blockchain explorer, making it impossible to tell the difference between transactions and therefore boosting Bitcoins privacy considerably.

As you can imagine, Taproot makes use of Schnorr signatures by aggregating a number of signatures into a single signature. It is therefore the perfect link between Schnorr signatures and MAST, as explained by Greg Maxwell, the developer behind Taproot.

If youre not familiar with Schnorr signatures, let me explain why this new signature aggregation scheme is so exciting.

Schnorr is a new signature aggregation scheme that uses Bitcoins technology in a quite spectacular way.

In order to combine all the transaction inputs signatures into one, we dont need a multisignature scheme, but rather an aggregate signature scheme.

The distinction is simply that in an aggregate signature scheme, each signer has their own message rather than one message shared by all.

Schnorr signatures do not release any information about the inputs when a verifier looks at the signature key. Therefore, a transaction output would look like a regular address to all outside viewers.

The only people capable of unlocking scripts within the address would be the owners of the private keys.

With Schnorr signatures and signature aggregation technology, it becomes possible to create smart contract functionality.

Logic that contains if this/then that can be linked to the signature spending conditions.

Finally, Schnorr signatures are easily verifiable and offer a greater degree of robustness, correctness, and flexibility when compared to traditional ECDSA signatures.

Will these new features be added to Bitcoin via soft forks throughout 2020 and 2021? Lets hope so.

The post Bitcoin technology: Whats coming in 2020? appeared first on Coin Rivet.

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Bitcoin technology: Whats coming in 2020? - Yahoo Finance

A man pushes a bicycle past the People's Bank of China (PBOC) headquarters in Beijing, China.

In terms of arguments against the long-term price appreciation of the Bitcoin price, one of the most commonly held beliefs is that something better will eventually come along and replace the worlds first major cryptocurrency. A more specific version of this argument comes in the form of Bitcoin eventually being overtaken by a new digital currency owned and operated by a government or corporation.

However, this theory is based on a complete misunderstanding of why Bitcoin is useful in the first place. In reality, central bank-issued digital currencies, such as the project being worked on in China, would only further solidify Bitcoins role as an uncontrolled, apolitical form of money in a digital age.

It is sometimes easier to understand Bitcoins value proposition when the current move towards a cashless society is extrapolated out another ten or twenty years down the road. If governments are in complete control of the worlds financial system at that time, then the situation looks rather grim, with it becoming much easier to track all transactions, inflate the money supply, seize savings, and strengthen other forms of financial control over the general public.

This is why it is necessary for something like Bitcoin to exist. And the utility of Bitcoin as a difficult to seize, censor, or inflate asset where each individual is in complete control of their money becomes much more apparent in this dystopian scenario.

Indeed, a recent report indicates Bitcoins lack of correlation to traditional financial assets as a key driving force behind financial advisors adding the crypto asset to their clients portfolios. Data from 2019 appears to back this thesis of Bitcoins growing utility as a digital gold of sorts.

In terms of competition from other cryptocurrencies meant to be decentralized, many investors think the competition to become the major digital store of value is already over. The altcoin markets severely poor performance against Bitcoin over the past couple of years lends support to this thesis. Additionally, the further development of innovations like sidechains could make matters even worse for alternative crypto assets like Ether and Ripples XRP.

Of course, Bitcoin is far from perfect as it exists today. For example, one large miner recently warned that better privacy is needed in the cryptocurrency network.

The idea that central banked-issued digital currencies would help make the case for Bitcoin is not completely theoretical, as a similar phenomenon already took place last year with Facebooks Libra announcement. The level of centralization involved with Facebooks digital payments initiative was a learning experience for people who didnt quite understand what Bitcoin was all about. One U.S. congressman even recommended Facebook simply adopt Bitcoin instead of creating a new digital currency from scratch.

Additionally, Congressman Brad Sherman (D-CA) appears to understand the threat Bitcoin represents to the United Statess control over the global economy, pointing out that Bitcoin is intended to displace the U.S. dollar as the reserve currency for most of the world.

At least one industry executive believes the Bitcoin price will reach $50,000 in 2020 due to this potential utility of Bitcoin as an apolitical store of value for the entire world.

Originally posted here:
Will The Bitcoin Price Get Demolished By Central Bank-Issued Cryptos? - Forbes

Grayscales Bitcoin Trust now reports to the United States Securities and Exchange Commission (SEC), putting it one step closer to public trading.

Grayscales Bitcoin Trust manages investment in Bitcoin on behalf of investors, exposing them to the coins potential for gains while mitigating risks. The Jan. 21 announcement advertises the trust as the first of its kind to report to the SEC.

Grayscales full Form 10 is available here. Subsequent to this registration, the trust will need to file quarterly and annual reports with the SEC, which will then become publicly available. In response to an inquiry from Cointelegraph, Grayscale declined to specify just when it will file the first of these reports but said the firm will do so in accordance with SEC regulations.

While a Form 10 filing is not enough for a company to begin trading publicly on exchanges, it is a step in that direction and opens the trust up to more investors than were previously available without registration.

In the announcement, the firm makes particular mention of accredited investors a controversial designation. Owning or purchasing shares from the Trust's private placement gives them the advantage of quicker liquidity with a reduced holding period of 6 months.

Grayscales announcement arrives as the SEC considers changes to its accredited investor designation, couched in the 1934 acts Section 12(g).

Effectively, the SEC trusts the wealthy or executive class to invest with insight and thereby minimal risk. Conversely, the Main Street investor, the decades-old moniker assumes, lacks this insight. Under SEC exemptions companies may offer shares to accredited investors without filing all documents that the SEC requires of publicly-listed companies. Critics castigate this exemption as favorable to the rich while being exclusionary of everyday investors, whom former SEC commissioner Michael Piwowar dubbed forgotten investors.

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Now Reporting to the SEC, Grayscale Bitcoin Trust One Step Closer to Public Trading - Cointelegraph

Binance and BitMEX were the two cryptocurrency exchanges that managed to greatly increase their Bitcoin holdings in 2019, according to a new report released by crypto analytics company CoinMetrics.

Meanwhile, Poloniex, the crypto trading platform that was acquired by an unnamed Asian group back in October, witnessed a severe decline in its total BTC supply.

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Poloniex, which was acquired by Circle for a whopping $400 mln in February 2019, went from one of the most popular exchanges to an almost irrelevant platform that turned into a promotional platform for Tron after its spinout. Justin Sun, the CEO of Tron, himself confirmed that he himself invested in the exchange after trying to distance himself from the deal.

The graph below vividly shows how the number of users online continues to decline in tandem with the exchange's BTC reservers.

BitMEX and Poloniex were both founded in 2014 but the former managed to take off and became the dominant exchange due to the popularity of crypto derivatives. Neither the CFTC nor more than 20,000 leaked emails prevented the Seychelles-based giant from hogging more BTC.

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It is worth noting that the report doesn't include America's number one exchange Coinbase that is estimated to control more than five percent of Bitcoin's total supply after acquiring Xapo.

As reported by U.Today, cryptocurrency exchanges are now estimated to control more than 10 percent of all existing coins.

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These Two Crypto Exchanges Greatly Increased Their Bitcoin (BTC) Reserves in 2019 - U.Today

Bitcoin has recorded its best start to the year since 2012. Optimism has returned to the market following a crash after the 2017 record high.

Bitcoin was trading at around $8,667.33 at 13:34 p.m. SIN/HK up roughly 21% so far this year.

Other digital coins including ethereum and XRP have followed suit, posting more than 20% gains in the first two weeks of 2020.

In December 2017, bitcoin hit an all-time high of nearly $20,000 but fell sharply to just over $3,000 in December 2018. Many experts saw that as the bottom as the price of the digital currency continued to climb in 2019.

But a few developments have helped underpin the recent price surge.

"The Iran uncertainty combined with the positive launch of CME Bitcoin Options were strong catalysts driving an eruption in bitcoin and even adding heat to the struggling top 100 alt coins," Jehan Chu, co-founder of Kenetic Capital, an investor in blockchain start-ups told CNBC.

"Alt coins" refer to alternative coins, a name for digital tokens other than bitcoin such as XRP or ethereum.

Chu was referencing the current geopolitical tensions between Iran and the U.S. as well as exchange-traded bitcoin options which launched Monday on the Chicago Mercantile Exchange. These are a way for institutional investors to get invested in bitcoin which is seen as positive for the price.

"While sentiment still drives waves of volatility, we are seeing increasing institutional volume anchoring the market," Chu added.

Meanwhile, developments on the technical aspects of bitcoin could also be fueling recent buying.

An event known as "halving" is happening in May. To understand what that is, it's important to understand how bitcoin's underlying technology known as the blockchain works.

Miners with high-powered computers compete to solve complex math problems to validate bitcoin transactions. Whoever wins that race gets rewarded in bitcoin.

Currently, miners are rewarded 12.5 per block mined.The rewards are halved every few years to keep a lid on inflation. By May 2020, the reward per miner will be cut in half again, to 6.25 new bitcoin.

This essentially reduces the supply of bitcoin coming onto the market. Halving is an event that happens every four years. It's written into the underlying code of bitcoin. Previous halving events have preceded big price increases in bitcoin.

Vijay Ayyar, head of Asia for cryptocurrency exchange Luno, said it is "debatable" whether this event is already priced in or not.

"I would conjecture most normal people are unaware of it, and when the price starts running, the masses will come in as we've seen before. This is slated to happen in May 2020. So any price increase as we're seeing, people have an eye on May for sure," Ayyar told CNBC.

He added that a $15,000 to $16,000 price on bitcoin is a "reasonable target" by year end.

CNBC's Ryan Browne contributed to this report.

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Bitcoin is up 20% so far this year and one expert predicts it could hit $16,000 by year end - CNBC