2020 and Beyond: Bitcoin: USD/BTC (BTC=X) Potential Protocol Upgrades => https://www.livetradingnews.com/2020-and-beyond-bitcoin-usd-btc-btcx-potential-protocol-upgrades-163195.html” data-toggle=”tooltip” title=”Share on Twitter” rel=”nofollow”> Follow on Facebook Subscribe by Email Print This Post
2020 and Beyond: Bitcoin: USD/BTC (BTC=X) Potential Protocol Upgrades
Bitcoin’s consensus layer has remained unchanged for over two years now.Since Segregated Witness (SegWit), which activated in August 2017, no hard fork or soft fork protocol upgrades have been deployed at all*, marking Bitcoin’s longest stretch without consensus forks so far.
But this stretch may soon come to an end: several backward-compatible soft forks are currently in development.Optimistically, some of them may go live in 2020 — if they gather sufficient support from the Bitcoin ecosystem.
These could be Bitcoin’s protocol upgrades in the new year … or perhaps in the new decennium.Schnorr/Taproot/Tapscript
Schnorr signatures are considered by many cryptographers to be the best type of cryptographic signatures in the field.They offer a strong level of correctness, do not suffer from malleability, are relatively fast to verify and, perhaps most interestingly, allow for math to be performed with them.
To name one concrete benefit for Bitcoin: Several signatures can be aggregated into a single signature, which could, for example, economically incentivize privacy-enhancing CoinJoin transactions.
Adding Schnorr signatures to the Bitcoin protocol has been a work in progress for some time now.But over the past year, developers working on a Schnorr signatures proposal, like Blockstream developers Pieter Wuille and Jonas Nick and Xapo’s Anthony Towns, revealed even more ambitious plans.Schnorr signatures will be proposed as part of a bigger soft fork protocol upgrade called Taproot, a proposal by Bitcoin Core contributor Gregory Maxwell, which was itself inspired by an older proposal called MAST (Merkelized Abstract Syntax Tree).
(Fractions of) bitcoin can be locked up in such a way that they can be spent under several different conditions, for example requiring timelocks, secret numbers of several participants to agree to unlock the coins.With MAST, all the different conditions are hashed and included in a Merkle Tree: a compact cryptographic data structure.The coins would then essentially be locked up in the final hash of this Merkle Tree, the Merkle Root.
To spend the coins, you only need to reveal the condition you end up using.The alternative ways in which the coins could have been unlocked remain hidden forever.
Taproot, then, is based on an interesting realization: No matter how complex, almost any MAST-construction could (or should) include a condition that allows all participants to agree on the outcome and sign off on a settlement transaction together.This “cooperative close” would override all other conditions.
Taproot leverages this realization and utilizes Schnorr signatures to make the cooperative close look like a regular transaction.Simplified, the cooperative close would be done with an aggregated signature, which looks just like a regular signature.In doing so, the MAST-construction remains completely hidden to the outside world! This benefits privacy and efficiency.
Taproot may also come with an updated version of Bitcoin’s programming language, Script, called Tapscript.This would also make it easier to add new features (“OP codes”) to Bitcoin’s programming language later on.
Taproot doesn’t appear to be very contentious, though developers are still discussing implementation details.
The Great Consensus Cleanup
The Great Consensus Cleanup is a proposed soft fork by Square Crypto developer Matt Corallo.As opposed to most protocol upgrades — including the other upgrades included in this list — The Great Consensus Cleanup is not intended to enrich Bitcoin with new features or possibilities.Instead, as the name suggests, this soft fork would remove some edge case vulnerabilities from the Bitcoin protocol.
These vulnerabilities are quite technical and “in the weeds.” They include, for example, fringe types of transactions that require much processing power to validate, redundant tricks for upgrading parts of the protocol, and a weak spot in Bitcoin’s difficulty adjustment algorithm.It has been known for some time that these vulnerabilities existed, but it is generally believed that exploiting them would be too costly to be profitable, or that such exploits would be relatively easy to deal with when they happen.Still, fixing them would make Bitcoin slightly more robust, while it would make developing Bitcoin implementations a bit easier.
The main objection to (parts of) The Great Consensus Cleanup is probably that some of the upgrades could, in theory, make certain existing coins (UTXOs) unspendable.
While it’s very unlikely that such UTXOs exist at all, it is impossible to know for sure whether they do, and some argue that making them unspendable is a risk that should, as a matter of principle, never be taken.Drivechain BIPs
Sidechains are blockchains that are “pegged” to the Bitcoin blockchain, allowing bitcoin to effectively “move” from Bitcoin’s blockchain to the sidechain and back.Once the coins are on the sidechain, they would obey the protocol rules of that blockchain, which could be about as diverse as any blockchain in existence today.There could, for example, be a “Zcash sidechain” for privacy, an “Ethereum sidechain” for certain smart contracts or a “big block sidechain” for low-fee blockchain transactions.
Some sidechains already exist, most notably Blockstream’s Liquid (primarily for inter-exchange fund transfers) and RSK Labs’ RSK (an “Ethereum sidechain”).
These are “federated sidechains”: the bridge between Bitcoin’s blockchain and the sidechain is managed by a “federation” of well-known companies in the space.They essentially control a multisignature address on the Bitcoin blockchain and collectively sign to “move” coins back and forth.
Drivechains would instead be secured by bitcoin miners: The same miners providing the hashpower that already secures the Bitcoin blockchain.“Moving” funds from the sidechain back to the main chain would require a majority of hash power over an extended period of time.Further, drivechains would be merged mined, meaning that hash power on the Bitcoin blockchain also protects the sidechain.
To realize this, Tierion developer Paul Sztorc and the pseudonymous CryptAxe have proposed two soft forks.The first one, called Hashrate Escrows, would act to lock funds in a contract on Bitcoin’s blockchain (“moving” them to the sidechain), to only be unlocked once sufficient hash rate votes to unlock the funds (“moving” the coins back).
The second soft fork, called Blind Merged Mining, would enable the sidechain to be secured by the same hashpower as the Bitcoin blockchain.
Drivechains are somewhat controversial, because (it is argued that) it would give more power to bitcoin miners.Some also suggest that blind merged mining could be achieved with the Noinput class.Technical Indicators
Overall, the bias in prices is: Sideways.
The projected upper bound is: 8,266.00.
The projected lower bound is: 7,166.21.
The projected closing price is: 7,716.10.
Candlesticks
A white body occurred (because prices closed higher than they opened).During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles.During the past 50 bars, there have been 25 white candles and 25 black candles.
Three white candles occurred in the last three days.Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.
Momentum Indicators
Momentum is a general term used to describe the speed at which prices move over a given time period.
Generally, changes in momentum tend to lead to changes in prices.This expert shows the current values of four popular momentum indicators.
Stochastic Oscillator
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20).The Stochastic Oscillator is 93.4461.This is an overbought reading.
However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 15 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas.The current value of the RSI is 61.29.This is not a topping or bottoming area.A buy or sell signal is generated when the RSI moves out of an overbought/oversold area.
The last signal was a buy 20 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas.
The current value of the CCI is 216.This is an overbought reading.However, a signal isn’t generated until the indicator crosses below 100.The last signal was a buy 4 period(s) ago.
MACD
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line.The last signal was a buy 19 period(s) ago.
Rex Takasugi – TD Profile
FOREX BTC= closed up 154.750 at 7,725.930.Volume was 94% below average (consolidating) and Bollinger Bands were 57% narrower than normal.
Open High Low Close Volume___ 7,571.1907,770.4007,471.9307,725.930 5,150.