Bitcoin needs to improve the security of electronic payments. But not all representatives of the cryptocurrency community want it
Despite the fact that cryptocurrency is a secure financial instrument, the problem of transaction confidentiality is still not solved. Some market players try to increase it, others, on the contrary, want to reduce the level of stealth. This issue is particularly acute in the context of Bitcoin, the main cryptocurrency of the world. It is impossible to reach a compromise because of the absence of an official representative of the asset, while centralized Altcoins have them. It is likely that soon this issue will still have to be resolved. The number of technologies aimed at increasing the security of electronic payments in Bitcoin is constantly growing. The question remains when they will be introduced into Bitcoin and whether it will happen at all.
Why the security of electronic payments in Bitcoin cannot be improved yet
As already mentioned, not everyone in the Bitcoin community is in favor of increasing the quality of cryptocurrency confidentiality. And even though the proportion of dissenters is small, it is enough to stop the process. At the same time, privacy updates are enough. The most promising ones are the following. Dandelion is a new security protocol developed by specialists of technology universities in America. It blocks hackers’ access to tracking the IP address of the author of the transaction, sending it by random path instead of specific nodes.
Another development, Mimblewimble, makes all transactions in the Bitcoin network confidential by default. Despite the obvious advantages, the introduction of such a protocol directly into the main cryptocurrency of the world is still impossible for political and technical reasons. However, it may be appeared as a sidechain BTC Mimblewimble. This will allow third-party blockchain participants to carry out anonymous translations without affecting the main chain and those users who oppose the use of the protocol.
A third important technology to improve the security of electronic payments is the Schnorr Signatures. Its essence is no longer focused on growth of the privacy, but to scale the network by combining the main part of Bitcoin input transactions to reduce the block size.
On the other hand, it is the use of this technology that will allow introducing other developments regarding the privacy. Among them there is Coinjoin technology, which mixes random transactions with each other in order to hide the data of the participants. Coinjoin’s effectiveness can be enhanced by Signatures. In this case, the transfer fee will be lower, which will lead to greater use of the technology and will have a positive impact on the degree of the privacy. Schnorr Signatures have the most chances to integrate into the Bitcoin blockchain. It is known that the developers of BTC mentioned this technology back in 2018, when they thoroughly asked the question of increasing the confidentiality of the network.