Innovation of Bitcoin's Native Scaling Technology: In-Depth Analysis of Taproot Consensus Technical White Paper

On May 20, 2024, a Bitcoin Layer2 development team named BEVM released a technical white paper titled "Taproot Consensus: A Decentralized BTC Layer2 Solution." This document elaborates on the implementation of Taproot Consensus and how to build a fully decentralized BTC Layer2 solution by integrating native technologies such as Schnorr signatures, MAST, and Bitcoin SPV nodes.

The Taproot Consensus plan is the culmination of Bitcoin's native scaling technologies. It does not modify the Bitcoin code at all, but cleverly combines several core technologies of Bitcoin, showcasing a simple yet ingenious innovative approach.

Bitcoin Technology Development Review

On October 31, 2008, Satoshi Nakamoto published the paper "Bitcoin: A Peer-to-Peer Electronic Cash System," which proposed the complete technical implementation of Bitcoin. Chapter eight of the paper introduced the SPV (Simple Payment Verification) solution, which is a technology that allows payment verification without the need to run a full node.

On January 3, 2009, Satoshi Nakamoto mined the genesis block on a server in Helsinki, marking the official birth of Bitcoin. It is worth noting that Bitcoin initially adopted the Elliptic Curve Digital Signature Algorithm (ECDSA), rather than the more suitable Schnorr signature algorithm, because Schnorr signatures had not yet been open-sourced and were still under patent protection.

In 2018, after years of validation, Bitcoin core developers officially proposed to introduce Schnorr signatures into the Bitcoin network.

On November 14, 2021, Bitcoin completed the Taproot upgrade, officially introducing Schnorr signatures and ushering in the era of decentralized multi-signature. The Taproot upgrade also introduced MAST (Merkelized Abstract Syntax Trees), enabling Bitcoin to have functionalities similar to smart contracts.

The combination of Schnorr signatures and MAST enables Bitcoin to achieve a code-driven decentralized multi-signature network, laying the foundation for the development of Bitcoin's second layer network.

Overview of Taproot Consensus Plan

The Taproot Consensus technical white paper points out that the non-Turing complete nature of the Bitcoin network limits its ability to directly implement Layer 2 scaling solutions similar to Ethereum Rollups. The script contract layer of Bitcoin can only perform simple transfer operations and cannot support complex smart contract functionalities. Therefore, it is not feasible to build Layer 2 scaling solutions solely from the Bitcoin script layer.

Taproot Consensus integrates Bitcoin's Taproot technology (Schnorr signatures and MAST), Bitcoin SPV light nodes, and BFT PoS consensus mechanism to build a decentralized and highly consistent Layer2 network.

Taproot Consensus Architecture Explained

Taproot Consensus consists of three parts: Schnorr+Mast, Bitcoin SPV, and Aura+Grandpa.

Schnorr+Mast utilizes the native technologies brought by the Bitcoin Taproot upgrade to achieve decentralized multi-signature management of Bitcoin, driven by code rather than manual signatures.

Bitcoin SPV allows for the synchronization and verification of Bitcoin transactions without running a full node, enabling Taproot Consensus to synchronize BTC states in a completely decentralized environment without permission.

Aura+Grandpa is an advanced PoS consensus protocol that achieves Byzantine fault tolerance, ensuring a high level of consistency among network nodes.

In the BEVM system, each validator holds a BTC private key for Schnorr signatures. The aggregated public key Pagg generated by the Musig2 multisignature scheme forms a large MAST tree. Validators achieve the functionality of submitting data from the Bitcoin mainnet to the BEVM network by transferring BTC and performing inscription operations to the threshold signature address generated by the MAST tree. At the same time, each validator acts as a Bitcoin SPV light node, capable of securely and permissionlessly synchronizing the BTC network state.

In short, the Taproot Consensus constructs a decentralized BTC multi-signature management on the first layer of Bitcoin using Schnorr+Mast, while operating a Bitcoin SPV node network on the second layer. The BEVM second-layer network runs entirely on Bitcoin SPV nodes, achieving data synchronization with the first layer of Bitcoin. To ensure the security and trustworthiness of the second-layer network, BEVM integrates the Bitcoin SPV node network with Aura+Grandpa, providing it with a security level at the BFT consensus level.

Technical Details and Innovations

The Taproot Consensus yellow paper also details the implementation of technologies such as Schnorr signatures, MAST, Bitcoin PSV light nodes, Aura+Grandpa, providing comprehensive and detailed learning materials for those who want to gain an in-depth understanding of the latest Bitcoin technologies.

The yellow paper also explains in detail the implementation process of Musig2 and the differences with the well-known BTC Layer2 project Mezo. Mezo is based on the tBTC protocol and utilizes Bitcoin's multi-signature to build a threshold signature network. However, tBTC still requires a multi-signature network of 9 signers. Taproot Consensus adopts a more advanced design, combining Schnorr signatures, MAST, Bitcoin SPV light nodes, and the Aura and Grandpa Byzantine Fault Tolerance consensus mechanisms to construct a highly consistent and secure decentralized Layer2 scaling solution.

Conclusion

The BEVM team's technical white paper comprehensively presents the implementation plan and technical details of Taproot Consensus, showcasing a Layer 2 solution that is entirely built on Bitcoin's native technology. Taproot Consensus not only inherits the technical direction of Bitcoin but also innovates by integrating technologies brought about by Bitcoin's various upgrades, making it a culmination of Bitcoin's native scaling technologies.

With the continuous development of the Bitcoin ecosystem, truly decentralized Bitcoin Layer 2 solutions will become an inevitable path for the development of the Bitcoin ecosystem, and solutions like Taproot Consensus are expected to play an important role in the future.