Adam Gibson, a Python developer and bitcoin researcher, stated private or anonymous transactions are large in size but can be scaled with solutions like bulletproofs.
Private Transactions are Larger than Public Ones
Anonymous transactions are larger in size than normal transactions. As such, most blockchain projects consider scalability as the main long-term challenge that needs to be improved as it is not possible to process hundreds of thousands of private transactions on a daily basis.
Every day, the bitcoin blockchain network processes about 162,000 transactions according to wallet platform Blockchain and the Ethereum blockchain protocol settles more than 800,000 transactions. At their peaks, bitcoin and Ethereum processed 450,000 and 1.2 million transactions respectively.
However, private blockchain networks like or are not able to match the transaction volume of bitcoin or Ethereum, primarily because private transactions require more information to be processed by public blockchain protocols. Monero currently processes approximately 5,000 transactions per day, while the figure for zcash is around 7,000.
At the Genesis London blockchain conference held during February 2018, Zcash COO Jack Gavigan stated that scalability has been the focus of most blockchain networks as with the current structure of blockchain protocols, it is difficult to process high volumes of anonymous transactions:
“I think we definitely see scaling as a challenge to be overcome. We are iterating the technology and we’re improving on the technology and we – scaling and improving the ability to have high volumes of transactions on the blockchain is one of the key areas that we’re focused on. I think it’s a challenge that most blockchain solutions face.”
Bulletproofs and Anonymous Payments
On the network, it is possible to process private transactions through a solution known as Confidential Transactions (CT). But, as Gibson explained on the if the bitcoin blockchain network begins to process private transactions, the size of its blocks could rise by two orders of magnitude.
“If you do and you make the amounts [of bitcoin transactions] private, then suddenly it’s huge. Bulletproofs bring [the size of transactions] way down. Not as small as original but it is much much better,” said Gibson, explaining that private transactions on the bitcoin blockchain network can be manageable with bulletproofs.
“Bulletproofs is just like an add onto the internal and technical stuff inside Confidential Transactions to make it take up less space,” Gibson added. “Bulletproofs are an example of zero-knowledge proofs, where the idea is somehow prove something in a really clever way that it doesn’t reveal any additional data.”
In February 2018, Blockchain development firm Blockstream’s resident mathematician Andrew Poelstra revealed , a technology which he created with bitcoin developers Greg Maxwell and Pieter Wuille.
The official report of Blockstream on Bulletproofs disclosed that similar to the core technology of the Zcash blockchain network; Bulletproofs are based on zero-knowledge proofs that allow users to send and receive payments without disclosing the amounts and any data about the recipient and sender.
According to Poelstra, it was extremely inefficient for the bitcoin protocol to process default Confidential Transactions because they were very large and slow to confirm. Each Confidential Transaction required the possession of a range proof, an element that is crucial to ensure a transaction to remain anonymous.
“A major difficulty with CT was that it made the transactions very large and slow to verify because it required each transaction output to contain a range proof, a type of zero-knowledge proof that proves amounts are too small to overflow,” said Poelstra. He added that bulletproofs allow the network to implement range proofs and process Confidential Transactions more efficiently.
“This lets us implement things such as rangeproofs in this general zero-knowledge framework without implementing the heavy machinery of elliptic curve arithmetic in zero knowledge.”
Overall, the Blockstream research found that bulletproofs can help process Confidential Transactions 23 times faster.
The technique is not limited to just bitcoin and altcoins that share the same codebase such as litecoin and zcash; for instance, the project is currently seeking donations to to ensure they are ready to be implemented.
The post appeared first on .
While most nations of the world have established a stance on digital currencies, the government of Ukraine has yet to decide on how to handle its crypto space. However, it seems the suspense is about to come to an exciting end as the Chairman of the National Securities and Stock Market Commission () of Ukraine has hinted that the regulatory body may soon legalize blockchain-based cryptocurrencies as financial instruments.
Cryptos Are Financial Assets
The Ukrainian cryptocurrency industry may become favorably regulated in the coming months as the chairman Timur Khromayev has opined that the digital assets space should be treated as financial instruments.
As such, the high ranking official has revealed he would raise the topic at the forthcoming Financial Stability Council meeting in the nation’s capital, Kiev. Khromayev took to his Facebook page to that:
“I think it is very timely to consider the recognizing of some crypto units as financial instruments during the upcoming meeting of the Financial Stability Council.”
Khromayev also made it clear that there is a need for the Commission to formulate guidelines to govern crypto-related businesses in the state.
Timur reiterated that the nascent world of crypto has all it takes to revolutionize the entire finance industry. Therefore it’s crucial to build on the standards already established in the nation’s virtual currency ecosystem. In the chairman’s words:
“The point of no return is already in the past. The crypto industry is becoming an integral part of economic and financial relations.”
Favorable Regulation Necessary
The chair of the NSSMC is not the only one in support of the establishment of crypto-friendly laws. Back in February 2018, BTCManager that the Ukrainian Cyberpolice had declared its full support for the legalization of and other cryptocurrencies.
“Today there is a need to resolve at the legislative level the issues related to the use of [cryptocurrencies] as soon as possible, as well as the introduction of the necessary taxation of transactions on the purchase and sale of [cryptocurrencies]. In addition, it’s necessary to determine the respective rules for the functioning of Ukrainian cryptocurrency exchanges and cryptocurrency exchanges points,” said the head of the Ukrainian Cyberpolice Department, Serhiy Demediuk.
While Ukraine has a somewhat vibrant cryptosphere, related-mining operations only became legalized in March 2018. With this new determination on the path of the NSSMC chair, it’s only a matter of time before the entire digital currency industry gets fully regulated.
The post appeared first on .
