Blockstream develops simpler, private multi-sig bitcoin transactions

Nicholas Say
Nicholas Say

Blockstream’s engineers are developing a protocol focused on making improvements to multi-signature crypto transactions. This new scheme plays an important role in supporting Taproot - Bitcoin’s long-awaited upgrade. This upgrade will see Schnorr signatures’ implementation into the Bitcoin codebase, in an effort to simplify the development and execution of smart contracts on blockchain. A new multi-signature design is undergoing - the MuSig2.

Blockstream devs commented on their progress,

“It offers the same functionality and security as MuSig1 but makes it possible to eliminate almost all interaction between signers. With MuSig2, signers need only two rounds of communication to create a signature, and crucially, one of these rounds can be preprocessed before signers know the message that they want to be signed.”

Why it matters: There were many limitations that existed in the original Bitcoin system, and now there is a substantial amount of interest in making the platform more capable. Wallet security is an ongoing concern and these upgrades may help to improve the overall security on Bitcoin-based wallets. While it is good to see steps like this being taken, many of the major issues that exchanges have faced have more to do with their centralized nature, and not the wallet architecture they use. For example, the current problems that OKEx clients are facing would be in place regardless of the wallet technology, as it is a centralized exchange.