Schnorr signatures may help to solve the Bitcoin scalability problem

The development of Bitcoin does not stand still. We have a lot of curiosities, new improvements that are worth looking at. SegWit, Lightning Network and Schnorr signatures are designed to solve the Bitcoin scalability problem and increase the usability of the largest cryptocurrency. The first two solutions have been approximated by almost all mainstream media, while very little information can be found on the signatures of Schnorr. Today, we will answer the question of what exactly they are.

Each new functionality must solve a problem. In this case, all new projects are trying to find the answer to Bitcoin's scalability problem. BTC transactions require signatures. These signatures have a large amount of space in blocks. The more people use Bitcoin, the more addresses are involved. Each address needs its signature, which requires more and more space in the blocks. As the size of the transaction increases, the transaction fee also increases.

Bitcoin has two keys - private and public. Keys are strings of characters that are mathematically related. What's interesting is that you can find a public key when you know the private key, but not the other way around. You can not find the private key if you only know the public key.

In order to send a BTC from an address, the user must confirm that he knows the private key, correlated with the public key. In order to confirm this, there is such a thing as a cryptographic signature.

Using the signature and knowing the public key, the user can check whether he has used the correct private key in the transaction - without access to the private key itself. As a Bitcoin owner, I can send and receive Bitcoins without disclosing private keys.

Invented by Claus-Peter Schnorr, these signatures are considered the simplest algorithm that has proven its safety. It is a series of mathematical formulas that combine the private key, public key and signature. What's more, thanks to this method, several signatures can be combined into one. This drastically reduces the network load for this type of transaction.

Bitcoin Core developer Eric Lombrozo estimates that Schnorr's signatures will increase the total "capacity" of the network by over 40%. This number will be higher if we consider multi-signature transactions (signed by different people) and the capacity of the block they need. Implementation of Schnorr's signatures would be a big win for cryptocurrency enthusiasts.