What is EC-STARKs and how can it improve Bitcoin scalability?
For all the good that Bitcoin brings to the table, it also possesses a commonly accepted issue in scalability. Bitcoin can only process a limited number of transactions per block and, as of Aug. 17, 2022, can handle about five transactions per second, which in comparison to most other blockchains is low. The factor limiting scalability lies in Bitcoin’s cryptographic algorithm.
The Elliptic Curve Digital Signature Algorithm is the essential cryptographic algorithm that powers Bitcoin and ensures that only the rightful owner can access and manage their funds. Currently, verification of the ECDSA, a Bitcoin signature allowing to carry out transactions and send Bitcoin , is not efficient and limits the scalability of the Bitcoin blockchain. A potential solution is using zero-knowledge proof technology, allowing higher degrees of privacy and security.
Based on the ZKP technology, STARKs, or Scalable Transparent Argument of Knowledge — invented by Starkware — is a type of cryptographic proof technology that makes it possible to communicate data with a third party — e.g., sign transactions without revealing the data. It also allows moving computations and storage of validated data off-chain, thus increasing scalability.
STARKs is a quantum-resistant system based on hash functions used by Ethereum, not elliptic curves utilized by Bitcoin. Importantly, STARKs systems are considered more advanced than their predecessors, zk-SNARKs, and can resist attacks from quantum computers.governance token issuance for its StarkNet — a decentralized permissionless STARK-based validity rollup that operates as an Ethereum layer-2 chain — to decentralize the network further and maintain STARK technology as a public good.
Thus, utilizing this technology may not only increase the scalability of Bitcoin but serve as the gateway for developers to create DApps on Bitcoin, potentially creating a rival for Ethereum.
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