The next evolution of BTC: OP_CAT Depth analysis

Author: Four Pillars Source: @wowitsjun and @xparadigms Translation: Shanooba, Golden Finance

Many people believe that BTC remains static due to its immutable architecture. Without a clear roadmap beyond its Halving plan, predicting the future of BTC is challenging. However, BTC can be upgraded through community consensus. If the majority of full nodes agree, BTC can be upgraded through a soft fork, introducing new features.

**This article examines BTC’s major past upgrades and explores OP_CAT, the next major upgrade expected. Let’s dive into the importance of these upgrades and explain why they represent an important milestone in BTC’s history. **

1. Background - Main Upgrades: Segregated Witness (SegWit), Taproot, and OP_CAT

1.1 SegWit (Segregated Witness) (2017) - Expanding BTCBlock space, giving birth to BTCCash

SegWit upgrade was implemented in August 2017, marking a significant attempt by BTC to solve the scalability issue for the first time. Prior to SegWit, BTCBlock stored a combination of signatures and transaction data, which was inefficient because the space allocated for signatures was disproportionately large compared to the actual size of the signature data.

Two opposing solutions emerged: one group advocating for increasing the block size of BTC, while the other sought to maintain the existing block size but increase efficiency. SegWit, the latter solution, separates signature data from transaction data through a core logic upgrade. It creates a separate storage space called the ‘witness area’, allowing more transaction data to be recorded in each BTC block.

Due to the SegWit upgrade, the amount of transaction data that can be stored in each Block has increased fourfold. This improvement results in faster transaction processing speed and drop in fees.

1.2 Taproot (2021) - Improving BTC efficiency and privacy

Taproot, implemented in November 2021, is another important upgrade to BTC following SegWit. This upgrade enhances the efficiency and privacy of BTC by introducing Schnorr signatures and Merkle Abstract Syntax Tree (MAST).

Before Taproot, the signature method of BTC relied on the Elliptic Curve Digital Signature Algorithm (ECDSA), and each transaction required a signature. This method led to an increase in the size of signature data, and it was easier to track transactions when multiple wallets sent funds to a single Address.

Schnorr signatures address the limitations of ECDSA by combining multiple signatures into a single unique signature. This greatly reduces the proportion of signature size in the Block. In addition, even transactions with multiple inputs are displayed as a single transaction, enhancing user privacy.

In addition, Merkle Abstract Syntax Tree (MAST) allows Taproot to handle complex BTC transactions more efficiently. It achieves this by introducing logic to extract and verify the required script hash values.

Unlike the SegWit upgrade, Taproot has received almost unanimous support in the BTC community.

1.3 OP_CAT (also known as BIP-420) - The foundation of BTC ecosystem rise

OP_CAT is widely considered as the next upgrade for Bitcoin. It is a simple 13-line code that was deactivated by Satoshi in 2010 to protect BTC from DDoS attacks. OP_CAT allows for connecting multiple elements in the BTC system. Today, there is a push to reintroduce OP_CAT and take measures to prevent DDoS attacks, such as limiting replication size. This reintroduction, known as BIP-420, could be a significant milestone for the BTC ecosystem, enabling various developments including second-layer solutions.

As emphasized in ‘The Real Way to Scale BTC via L2’, BTC scripts are stateless. However, combining OP_CAT with Schnorr signatures allows BTC to enforce specific operations and verify state changes. This is crucial because the blockchain fundamentally stores states. If state changes can be confirmed internally in BTC, it opens the door for internal Smart Contracts. Additionally, OP_CAT enables STARK verification, facilitating BTC deposits and withdrawals through Zero-Knowledge Proofs. Starkware has demonstrated Zero-Knowledge Proofs using STARK on the BTC Signet. Many anticipate a Soft Fork in the near future to introduce OP_CAT, which could completely transform the BTC ecosystem and even the entire cryptocurrency field.

2. Summary

2.1 @wowitsjun_ from Hashed

The next direction for BTC’s upgrade will be one that directly contributes to the expansion of the BTC ecosystem rather than improving its efficiency. The significance of unlocking the potential of BTC goes far beyond the emergence of another ecosystem. Expanding the BTC ecosystem will pave the way for integrating the fragmented blockchain space and leveraging the synergies with the Ethereum ecosystem. As clues to BTC’s scalability are gradually revealed through future upgrades, the BTC ecosystem will inevitably expand. Here, we need to think about what the future financial system will look like.

2.2 @xparadigms from Four Pillars - “The Next Stage of Digital Gold”

BTC is known for its resistance to change, and past differences of opinion have led to forks such as BTC Cash and BTC SV. Despite the controversy, the proposed OP_CAT addition promises to have a greater impact than any previous upgrade.

Introducing OP_CAT to BTC enables a secure scaling solution that fosters a robust BTC ecosystem. It is capable of connecting multiple elements, allowing for proof verification, including zkRollup deployments. For example, Starkware recently tested a STARK-based zkRollup on a testnet.

The value of gold comes from its scarcity and recognized practicality. Similarly, BTC, as the established ‘digital gold’, is entering a new stage of exploring its applications. With the OP_CAT upgrade, this digital gold can become the cornerstone of building digital infrastructure and finance.