Alex Bosworth, a developer at Lightning Labs, announced that MuSig2, the evolution of the multisignature protocol he designed, could be added to Bitcoin’s Lightning Network (LN) soon.
“An update to MuSig2 is already in final revision for Lightning Loop,” Bosworth commented in a Tweetwhere he also mentions some of the advantages that this tool would bring to LN after its activation in Lightning Loop.
Lightning Loop is a kind of bridge connecting the main Bitcoin network with Lightning. East allows you to add BTC (loop-in) and mine BTC (loop out) of a Lightning Network payment channelin order to balance the ability to send and receive funds between the nodes it connects.
MuSig2, on the other hand, is a multiple cryptographic signature scheme that allows the creation of a public key from the private keys of several signers. It is worth noting that a public key, along with its respective private key, is how Bitcoin addresses originate to send, receive, and store BTC.
Multisignature public keys would be the Bitcoin equivalent of joint bank accounts in which the signature of the holders is required to have access to the funds of said account. In the case of MuSig2, thanks to its implementation of Schnorr signature technology, its protocol only requires two rounds; while its previous version, MuSig1, required a previous round (three in total) to guarantee the safety of operations.
Aftermath of Taproot on Bitcoin
While the word sequel usually has a negative connotation when talking about illnesses or conflicts, in this case, the sequels that the addition of Taproot has brought to the Bitcoin protocol are positive.
When Taproot finally got to Bitcoin, it was done by the Schnorr firms. This algorithm for the creation of cryptographic signatures is the basis for the creation of multisignature public keys. These signatures, in addition to being more versatile, are also more secureas they are more difficult to falsify or force.
Advantages of MuSig2 on the Bitcoin Lightning Network
The first of the advantages that the arrival of MuSig2 to LN would imply would be the 33% reduction in the space that a submarine exchange occupies in the chain when doing a sweep from LN to the main network. Sweep (from the English sweep) is the name given to an operation in which all the funds are withdrawn from one wallet to another. In this case, it would be to extract the funds received by one of the Lightning network nodes to a Bitcoin address.
Underwater swaps are a protocol that uses a smart contract to exchange tokens or cryptocurrencies from an address in the string (on-chain) to one outside the chain (offchain). The author of this protocol is Alex Bosworth himself. The fact that they do not need a trusted third party for this type of operation makes them an ideal tool for adding and withdrawing funds from a payment channel in LN.
The space reduction caused by the use of MuSig2 when proceeding with loop out causes a decrease in commissions for conducting submarine exchanges.
Taproot present in the Bitcoin Lightning network together with MuSig2
Another benefit that would come along with the adoption of MuSig2 in LN is a higher level of privacy on exchanges or swaps. This is due to the removal of the HTLC pre-image from the blockchain, which is part of the exchange process.
HTLC is the name of a type of smart contract that is used in atomic and submarine exchanges between blockchains. Saying The contract locks the funds to be exchanged for two conditions: hash and time.
If both parties comply with the HTLC contract, it allows the transaction to proceed. On the other hand, if the established time limit expires before both parties demonstrate that they are capable of fulfilling the contract, the funds return to the addresses that sent them. In other words, no one keeps the other’s money.
The problem with the HTLC preimage is that it is reused for new contracts, which affects the privacy of each participating node in the path of a payment. To remove it, Bosworth makes use of Taproot, an update that came to Bitcoin in November 2021. P2TR or Pay-To-Taprootas it is also known, comprises a set of technical advances for the privacy and scalability of Bitcoin.
Having removed the HTLC preimage makes this type of contract more similar to PTLC, a type of smart contract previously mentioned in a CriptoNoticias article about the improvements Taproot could bring to Bitcoin.