Summary of New Bitcoin Technology Developments

1. Main Exploration and Conflicts of Bitcoin's Original Technology

The original technology of Bitcoin has always faced conflicts between large-scale applications and the capabilities that Bitcoin should possess. These issues involve aspects such as transaction scale, complexity of transaction instructions, and the methods of functionality implementation. With the development of technology, many problems have received clearer answers.

1.1 The scripting language of Bitcoin and instruction reduction

Bitcoin uses a reverse Polish notation scripting language, which does not have loops and conditional control statements, and is therefore not Turing complete. This design has both advantages and limitations:

Advantages:

• Avoid network paralysis caused by malicious code
• Prevent DOS attacks

Limitations:

• Unable to run complex programs
• Limited functionality

Bitcoin has repeatedly deleted instructions in its history, mainly involving string operations, bitwise operations, and arithmetic operations. The deletion of instructions helps to simplify the underlying protocol, enhance security, and improve stability.

1.2 Bitcoin forks history, reasons, and significance

During the development of Bitcoin, there were multiple forks, mainly due to the block size dispute. The main forks include:

• BCH: Increase the block size to 8MB, later to 32MB
• BSV: The block size is 128MB

Forks reflect the community's divergence on scaling solutions and are also a process of technological exploration.

1.3 Typical Explorations in the Development of Bitcoin

Early main explorations include:

1. Colored Coins(: By adding annotations to Bitcoin to represent a wider range of assets

2. MasterCoin)OMNI(: Establish a complete node layer, scan the Bitcoin block to maintain the status database.

3. CounterParty: Use OP_RETURN to store data, enabling asset issuance and trading.

These explorations laid the foundation for subsequent development.

) 1.4 The Imperfections of Bitcoin and Layered Protocols

Main limitations of Bitcoin:

1. The UTXO account model is not conducive to implementing smart contracts.
2. The scripting language is not Turing complete and has limited functionality.
3. Centralization of Mining Issues
4. Scalability Issues

Layered design is a method to solve these problems by dividing the system into multiple layers, where each layer is independent yet collaborates with others.

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2. Important New Technologies in the Development of Bitcoin

) 2.1 OP_RETURN

OP_RETURN allows a small amount of arbitrary data to be attached to transactions, providing possibilities for extended applications.

2.2 Segregated Witness ### Segwit (

Segregated Witness solves the transaction malleability issue and enables the expansion of block capacity.

) 2.3 Taproot

Taproot further expands the functionality of Bitcoin:

• Introduce Schnorr signatures to improve transaction efficiency and privacy.
• Implement MAST### Merkle Abstract Syntax Tree(, optimize script storage
• Expanded scripting capabilities through Tapscript

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) 2.4 Ordinals, Inscriptions and BRC-20

• Ordinals: Assign a unique number to each satoshi
• Inscription: Engraving information on the smart contract to realize NFT functionality
• BRC-20: fungible token standard

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) 2.5 Other Emerging Protocols

• Atomicals and ARC-20
• Runes: Homogeneous Tokens Based on UTXO
• BTC Stamps and SRC-20/721

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3. How to Use New Technologies and Future Development

) 3.1 How to Use New Technologies

The application of new technology is mainly reflected in two aspects:

1. Block Expansion: such as Segregated Witness
2. Capability expansion: such as Taproot, Schnorr signatures, etc.

Currently, applications are mainly focused on blockchain expansion, while applications for capacity enhancement are still under development.

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) 3.2 Future Development Needs

1. Short term: Complete major capability expansion to meet financial application needs.
2. Medium-term: Develop Layer 2 solutions to meet financial and trust applications.
3. Long-term: Build a complete Web3.0 ecosystem

Future developments will focus more on asset issuance, management, and the construction of large-scale Web3 applications.

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