Schnorr Signatures, New Tokens on Coinbase, and BlackRock
Issue: 043
Schnorr signatures get their own BIP
Long timer developer and researcher, Peter Wuille, created a BIP to integrate Schnorr signatures into Bitcoin. Currently, Bitcoin, and most other currencies for that matter, use ECDSA as their digital signature. The digital signature is the cryptography that allows users to verify they have the private key to a public key and the bitcoin held with that public key. Every transaction requires users to provide proof through a digital signature.
Schnorr is a new type of signature that has some immediate and longer-term benefits. The immediate benefits are focused around privacy. Today, a multi-signature transaction using ECDSA must verify all of the signatures used in the transaction individually. It is easy for an outsider to see that a transaction is a multi-signature transaction vs. a single signature transaction. Schnorr signatures ‘combine’ multi-signature transactions so that they look like a single signature transaction. That means outsiders won’t be able to differentiate between different transaction types, including lightning transactions that open and close channels. This also decreases the size of multi-signature transactions, allowing more of them to fit into a block and slowing down the rate of increase of the blockchain itself.
There are a host of longer-term benefits as well, like incentivizing the use of CoinJoin for further privacy, and paving the way for scriptless scripts and taproot.
If you want to go deeper, check out my post on the math behind ECDSA and Schnorr signatures or read Spencer Bogart ‘s post on schnorr signatures and scriptless scripts.
Coinbase to list 5 new tokens
Coinbase announced they will attempt to list five new tokens:
- Cardano (ADA)
- Basic Attention Token (BAT)
- Stellar Lumens (XLM)
- Zcash (ZEC)
- 0x (ZRX)
- along with previous announcement for Ethereum Classic.
The Company specifically pointed out that there are more technical hurdles to overcome than previously listed tokens, so there are no guarantees that these new tokens will be listed across all (or any) of their platforms.
Additionally, Coinbase received the ‘ok’ from regulators to purchase several securities firms. This would allow Coinbase to list registered securities, including tokenized securities.
BlackRock interested in Cryptocurrencies
After previously taking a negative stance on bitcoin and cryptocurrencies, BlackRock, the world’s largest ETF provider, has suggested they may be interested in getting involved. The Company has created a working group to assess opportunities in the space.
Project Spotlights
- Apparently cryptocurrency prices are too predictable these days for the community because Augur quickly surpassed $1M in betting volumes.
- Bancor’s “decentralized exchange” (it’s not a decentralized exchange) was hacked.
- Peter Thiel and Jihan Wu invest in Block.One (the entity behind EOS) because $4B isn’t enough money for a startup.
- CFA adds cryptocurrency materials to the three-part test, so we should expect 0 more ICO scams from here on out.
- Get smart on eltoo, an upgrade to the lightning network.
