Bitcoin native expansion technology master - BEVM technology yellow paper interpretation

Foreword:

On May 20, 2024, the Bitcoin Layer2 development team BEVM officially released the technical yellow paper "Taproot Consnesus: A Decentralized BTC Layer2 Solution".

The yellow paper describes in detail how Taproot Consnesus is implemented, and how to combine Bitcoin native technologies such as Schnorr signatures, MAST, and Bitcoin SPV nodes to build a fully decentralized BTC Layer2 solution.

After reading the whole article, the author feels that the Taproot Consnesus solution proposed by the BEVM team is a true integrator of Bitcoin native expansion technology. Taproot Consnesus did not make any modifications or additions to the Bitcoin code, but fully combined and innovated several major native technologies of Bitcoin, with simple ideas and ingenious structure.

Before formally interpreting the yellow paper, it is necessary to review the history of Bitcoin's technical iterations, so as to facilitate our understanding of how Taproot Consnesus was born out of the development of Bitcoin step by step.

Main text:

I. History of Bitcoin's technical iterations

On October 31, 2008

Satoshi Nakamoto published a paper titled "Bitcoin: A Peer-to-Peer Electronic Cash System", which formally proposed a complete technical implementation of Bitcoin.

In Chapter 8 of the paper, Satoshi Nakamoto mentioned a solution called SPV (Simple Payment Verification), which is a technical means of verifying payments without running a full Bitcoin node, just by saving the block header.

On January 3, 2009

Satoshi Nakamoto mined the Genesis Block on a small server in Helsinki, marking the official birth of Bitcoin.

It is worth mentioning that in the official code of Bitcoin, Satoshi Nakamoto used the Elliptic Curve Digital Signature Algorithm (ECDSA) but did not use the Schnorr Signature technology (i.e. Schnorr Signature) which is more suitable for Bitcoin. The reason is not that the Elliptic Curve Signature is better than the Schnorr Signature technology, but that the Schnorr Signature was not open source at the time and was still under patent protection. Therefore, Satoshi Nakamoto chose the open source Elliptic Curve Signature as the second best option.

Schnorr signature retains all the functions and security assumptions of elliptic curve signature. At the same time, it can break through the constraint that Bitcoin can only achieve 15 multi-signatures at most under the technical framework of elliptic curve signature, and finally achieve 1000+ addresses to jointly manage Bitcoin without affecting the signing speed.

In 2018

After years of repeated verification,Bitcoin core developer Gregory Maxwell and others formally proposed BIP, suggesting that Schnorr signature be introduced into the Bitcoin network.

On November 14, 2021,

Bitcoin officially completed the Taproot upgrade, and Schnorr signature was officially incorporated into the Bitcoin network, ushering in a new era of decentralized multi-signature for Bitcoin.

In addition to Schnorr signatures, the Taproot upgrade also introduced MAST (Merkelized Abstract Syntax Trees), which is a technology that allows Bitcoin to have similar smart contract functions. It is implemented by organizing the contract logic of multiple conditional branches into the form of Merkle trees, that is, Bitcoin code can be used to implement functional requirements similar to smart contracts (however, it is limited to Bitcoin payment verification, which is different from Ethereum's complex smart contracts).

Schnorr signatures can increase the number of Bitcoin multi-signature addresses to 1000+, and MAST can drive Schnorr signature addresses to multi-sign through Bitcoin programs. Therefore, Schnorr signatures + MAST can realize a decentralized Bitcoin multi-signature network that does not require human signatures but is driven by Bitcoin code instructions.

This means that Bitcoin can get rid of the constraints of the first layer in a trustless way, and then go to Bitcoin's second layer to realize more complex and richer business scenarios.

The Taproot Consnesus solution proposed by the BEVM team is the culmination of Bitcoin's 13 years of technological iterations from 2008 to 2021.

2. Overview of Taproot Consnesus Solution:

The Taproot Consnesus technical yellow paper begins by saying: "The non-Turing complete nature of the Bitcoin network limits its direct implementation of Layer2 expansion solutions similar to Ethereum Rollup. The script contract layer of the Bitcoin network can only perform simple transfer operations and cannot support more complex smart contract functions. Therefore, it is not feasible to build a Layer2 expansion solution purely from the Bitcoin script level."

The opening description is highly generalized, pointing out the non-Turing perfection of the Bitcoin network, and that Bitcoin script contracts can only perform Bitcoin transfer operations. Therefore, the correct direction for Bitcoin expansion is not to make a fuss on the Bitcoin layer 1 network, but to use Bitcoin's existing capabilities to build a completely decentralized Bitcoin layer 2 expansion solution.

Taproot Consensus combines Bitcoin's Taproot technology (Schnorr signature and MAST), Bitcoin SPV light nodes, and the BFT PoS consensus mechanism to build a decentralized and highly consistent Layer 2 network.

3. Detailed explanation of Taproot Consnesus architecture

The Taproot consensus proposed by the BEVM team consists of three parts: Schnorr+Mast, Bitcoin SPV and Aura+Grandpa.

Schnorr+MastAs we have mentioned in the previous article, the combination of these two native technologies brought by the Bitcoin Taproot upgrade can realize the decentralized multi-signature management of Bitcoin, and it does not need to be signed by people, but driven by Bitcoin code.

So, who drives these codes? It is driven by the consensus reached through the second-layer network.

So, how does the second-layer network reach consensus, and how does this consensus synchronize with the state of Bitcoin's first layer?

This is the utility of the Bitcoin SPV+BFT POS consensus (Aura+Grandpa).

Bitcoin SPV is a simple payment verification method proposed by Satoshi Nakamoto, which can synchronize and verify Bitcoin transactions without running a full node. This feature enables Taproot Consensus to synchronize BTC status in a completely decentralized environment without any permission.

Aura+Grandpa is a relatively common advanced PoS consensus protocol that implements Byzantine fault tolerance, which ensures the high consistency of network nodes through a distributed protocol (blockchains built with the Substrate framework basically use Aura+Grandpa).

Therefore, to summarize, the operating principles of the three parts of Taproot consensus:

"In the BEVM system, each validator holds a BTC private key for Schnorr signature. The characteristics of Schnorr signature enable efficient signature aggregation, thereby improving the security and efficiency of the system. The aggregated public key Pagg generated by the Musig2 multi-signature scheme forms a large MAST (Merkle Abstract Syntax Tree) tree.

After the root hash value of the MAST tree is generated, the validator performs BTC transfer and inscription operations to the threshold signature address generated by the MAST tree, thereby realizing the function of the BTC mainnet submitting data to the BEVM network. At the same time, each validator acts as a Bitcoin SPV (Simplified Payment Verification) light node, enabling it to synchronize the BTC network status securely and without permission."

In short:

Taproot consensus uses Schnorr+Mast on the first layer of Bitcoin to build decentralized BTC multi-signature management, and runs the Bitcoin SPV node network on the second layer. Taking BEVM as an example, the BEVM second-layer network all runs Bitcoin SPV nodes. These nodes can synchronize the data status of Bitcoin's first layer, so BEVM and Bitcoin's first-layer information can be synchronized. In order to ensure that the second-layer network is safe and reliable, BEVM integrates the Bitcoin SPV node network with Aura+Grandpa, which makes the Bitcoin SPV node network have the security level of the BFT consensus level. That is, it is not some multi-signers who manage the BEVM network assets, but it is driven by BFT consensus, thereby achieving true decentralization.

IV. Other technical details in the Yellow Paper

In addition to the above technical framework, the Taproot consensus yellow paper also explains in detail the implementation details of technologies such as Schnorr signatures, MAST, Bitcoin PSV light nodes, Aura+Grandpa, etc. For those who want to learn and understand the latest Bitcoin technology, this Taproot consensus yellow paper produced by the BEVM team is a very comprehensive and detailed learning material.

Not only that, the yellow paper also explains in detail the implementation process of Musig2, as well as the difference between the well-known BTC Layer2 project Mezo and Taproot consensus.

The underlying technical structure of Mezo is based on the tBTC protocol. tBTC uses Bitcoin multi-signatures to build a threshold signature network, which has stronger consistency than traditional distributed networks.

However, tBTC is still a multi-signature network that requires 9 signatures. To truly achieve consensus-driven rather than relying on people, it is necessary to combine the multi-signature network with the BFT PoS (Byzantine Fault Tolerant Proof of Stake) consensus mechanism. (This is also the difference between distributed networks and blockchains. Distributed networks emphasize distribution, but lack Byzantine Fault Tolerant consensus. Although blockchain is also a distributed network, it is driven by Byzantine Fault Tolerant consensus, so it is a truly decentralized network).

The Taproot Consensus solution adopts this more advanced design. By combining Schnorr signatures, MAST, Bitcoin SPV light nodes, and Aura and Grandpa Byzantine Fault Tolerant consensus mechanisms, a highly consistent and secure decentralized Layer2 expansion solution is built. This fusion not only improves the scalability and availability of the Bitcoin network, but also ensures the security and consistency of the BEVM network.

Summary:

The technical yellow paper released by the BEVM team systematically and comprehensively describes the implementation scheme and technical details of Taproot Consensus, and shows us a Bitcoin second-layer solution built entirely on Bitcoin native technology.

Taproot Consensus not only respects and inherits the original technical direction of Bitcoin, but also combines the technologies brought by Bitcoin's previous upgrades for combined innovation. It is a true integrator of Bitcoin native expansion technology.

With the continuous development of the Bitcoin ecosystem, people will gradually realize that a truly decentralized Bitcoin second-layer solution is the only way for the development of the Bitcoin ecosystem, and solutions like Taproot Consensus will truly shine.