2023 was another big year for the BSV blockchain concept factory, sCrypt, and its CEO, Xiaohui Liu. California-based Liu’s blog and X/Twitter account are required reading for anyone looking for potential Bitcoin business or project ideas, as are his multiple appearances in recorded video interviews. In fact, sCrypt produces so many use case ideas and proofs of Bitcoin network capabilities that it needs its own year-in-review summary. What follows are the ones that caught our attention most.
CoinGeek asked Liu what his personal highlight of the year was. “People started using sCrypt in production” was his short response before returning to his work, publishing at least three new conceptual scenarios (with code) since we posed the question.
At the start of 2023, Liu said he was “super excited about Bitcoin in 2023,” and the adoption of sCrypt’s methods in real processes (as well as this series of new ones) has validated that super-excitement.
Liu doesn’t always describe the potential use cases for the problems he solves—because that’s not his job, it’s yours. But for creatives and other outside-the-box thinkers, his inspiration can be enough to provoke further thoughts and, hopefully, new project plans.
Much of sCrypt’s work involves creating contracts that automate functions usually performed by humans and companies in the traditional finance industry. However, it’s not always as “simple” as writing code replicating a real-world process; it also means proving the code can run securely and efficiently using existing Bitcoin script and its UTXO-based structure. sCrypt also works hard to find easier solutions for those not working in the BSV blockchain. Why? Because there’s always the need to demystify the BSV blockchain to outside developers and allow them to find its benefits by themselves by actually using it.
In a recent CoinGeek Livestream with Kurt Wuckert Jr., Liu said his aim was to “make Bitcoin development fun again,” recapturing some of its original camaraderie and overcoming its tribal loyalties with more cross-chain capabilities. He also noted that some of his ideas that had originally met with scorn from non-BSV blockchain camps had since become mainstream—like his claim that Bitcoin has always been Turing-complete.
And now, the year-in-review
You can now write text directly onto Bitcoin in 1 min https://t.co/Pk4JoKdXuW pic.twitter.com/bModJIqkk0
— xhliu (@sinoTrinity) December 8, 2023
In January 2023, Liu published a sample script to run the “Monty Hall Problem” in a Bitcoin contract. It’s named after a game show host and a game show trick, but the math behind it produces surprising results (for non-mathematicians, anyway). The script also has ways to make the “game” provably fair, or at least stop the creator from changing the game’s conditions once it’s begun.
In February, he showed that any phone or tablet running iOS/Android (as well as Apple desktops using MacOS) can be turned into a secure Bitcoin wallet using their Secure Enclave chips. These chips store data like facial recognition- and fingerprint-derived keys to access encrypted data on the devices. This data can’t be exported from the device, but Liu also details ways to avoid losing access to a secure wallet after losing/breaking a device.
Next came a project for those disillusioned Ethereum developers out there: Account Abstraction. On Ethereum, it’s a hypothetical process to unify that network’s two types of “accounts” (externally-owned accounts and contract accounts), thus making it possible to confidently store or recover funds if a private key gets lost. Ethereum developers have struggled to solve the problem of moving signed EOA transaction logic to the EVM (Ethereum Virtual Machine) as with CAs without having to change the Ethereum protocol (yet again). Liu demonstrated how Bitcoin’s non-account UTXO structure makes it possible to perform account abstraction on Bitcoin and that this solution has existed in Bitcoin since it began.
He also described how one of BTC/BSV’s hottest topics for 2023, Ordinal NFTs, is the latest manifestation of the old Bitcoin “colored coins” idea. The process on BTC requires jumping through hoops using Taproot and SegWit, but since BSV doesn’t have BTC’s data/block size limits, Ordinals are easier to create—as well as much faster and cheaper to send. At the end of 2023, Ordinals have become commonplace on BSV, proving Liu correct.
More secure, but still verifiable, ways to use Bitcoin
March and April saw sCrypt create the sCrypt Verifier Plugin for WhatsOnChain, allowing everyone to submit and verify sCrypt code for a deployed contract, giving extra assurance that the contract works and is legit. sCrypt would later develop another WOC plugin to decode BSV-20 token data.
There was another solution to the problem of lost/stolen Bitcoin private keys called “Social Recovery,” which locks bitcoins in a smart contract and shares access between the holder and a “guardian” (e.g., wallet, service provider, or someone else). On a similar note, Liu shared an idea for “Stateful Multisig” wallets on Bitcoin, putting stakeholders of a multi-signature wallet into contract code rather than performing preliminary on-chain transactions to exchange information.
In May, he noted that it’s possible to write high-level language contracts on BTC (yes, BTC), proving that sCrypt code is useful on blockchains other than BSV (if you really must). Additionally, sCrypt also launched its full-stack Web3 smart contract development platform, making it easier for developers to get started in BSV without having to re-learn all its technical details from scratch.
With June and July 2023 came a process to derive Bitcoin keys from PGP keys, allowing the recipient of a Bitcoin transaction to verify that it came from a particular user. Liu then demonstrated cross-chain atomic swaps (using transactions to trade assets between different blockchains without an exchange in the middle) using hash locks and time locks.
Liu then proved this method by performing the first-ever atomic swap between the BSV and BTC blockchains and then demonstrated a contract that can perform these swaps using SPV without needing hash time-locked contracts (HTLCs). In September, sCrypt found a way to make atomic swaps between Bitcoin and Ordinal NFTs.
Ordinals are so hot right now
By August, Ordinals were fast becoming the preferred way to create and trade NFTs. sCrypt showed a way for Bitcoin Ordinals to support smart contracts—and once again proved the BSV blockchain really can do anything Ethereum can. Liu also wrote of alternate processes to integrate Ordinals/smart contracts that had either the same UTXO or separate ones and described a way to control the distribution and issuance of BSV-20 Ordinals as well as transfer them. By October, sCrypt had added BSV’s 1Sat Ordinals support to its developer platform.
Although the topic of Ordinals preoccupied many Bitcoiners throughout 2023, Liu still found time to prove other concepts. In September, he released contract code for Catastrophe Bonds, or “cat bonds” on Bitcoin. Cat bonds are a relatively new instrument that combines insurance and bonds, paying fixed rates of interest until some kind of natural disaster occurs. Liu showed they could work as Bitcoin smart contracts without the need for intermediaries like banks or insurance companies.
That same month, sCrypt also created a process to perform sealed auctions on Bitcoin, allowing secret bids with both confidentiality and verifiable transparency without the need for a human auctioneer.
In October, Liu published a technique to perform Homomorphic Encryption on Bitcoin. This is a way to perform computations on encrypted data without needing to decrypt it first, thus keeping the data itself confidential. This is a primary concern for potential enterprise-tier Bitcoin app writers, who may be concerned with processing sensitive data on an open blockchain with public transaction records.
New month, more new ideas from sCrypt: November saw original processes to write on-chain limit orders and options contracts on Bitcoin, using a type of smart contract known as a “covenant.” Covenant contracts allow a transaction output to be spent (and a transaction to complete) only if the originator meets certain criteria. These are also processes usually performed by third-party exchanges, but which can now be automated (only on BSV).
December
And in December, business and development activity starts to wind down to prepare for Christmas and New Year, right? Not for sCrypt, which has (so far) presented six new concepts for the month. That’s actually more than any other month in 2023…and two new ideas have appeared on Liu’s Medium page since we started writing this article. We cannot guarantee there won’t be more after we publish this.
First, there was a new way to issue and manage bonds directly on-chain, thus removing another financial intermediary. Following closely behind bonds came sCrypt’s on-chain loan contracts, allowing borrowers and lenders to agree on terms/conditions. Liu also posted a demonstration of the process using collateralized loans.
Next came the controversial “OP_COURT” post, which demonstrated so far hypothetical means to seize and manage Bitcoins belonging to those suspected of engaging in illegal activities. sCrypt’s post on the issue said any seizure should be transparent and auditable and come after a court judgment, but it also said there could be immediate seizure “in certain circumstances.” This process shows the problems Bitcoin has historically faced in creating an alternative to the regulated financial system while also having enough regulation of its own to satisfy governments and potential large-scale users who’ve been deterred by Bitcoin’s ‘crypto-anarchic’ image over the past decade.
In the second half of December (Liu, don’t you have year-end parties to go to?) Liu expanded on the idea of using SPV to access BSV blockchain contract data, detailing a means to also trustlessly access data on other (non-BSV) chains. It only works on blockchains that support timelocks and SPV, which aims mostly at BTC.
Liu later moved to other topics, saying “the truth is that Bitcoin was always quantum resistant” and (naturally) proving how this is so. The question of what would happen to Bitcoin keys in the event quantum computers and their threats to encrypted data become a reality—or at least a well-known reality—is also one that preoccupies a lot of Bitcoin-related discussion. Liu showed that using Lamport Signatures in smart contracts would protect Bitcoin from quantum attacks without requiring any change to the base layer protocol. Because in the BSV blockchain, you can’t change the protocol rules. It’s a BSV key selling point.
Finally (maybe) sCrypt published a process to implement futures smart contracts on Bitcoin, following up on options, limit orders, and loans. Once again, this process automates something that has been common in the traditional financial space for decades now, but still manages to disrupt the industry by removing third-party intermediaries.
That’s a wrap!
Throughout 2023 and the previous years, Xiaohui Liu has stressed that contracts are merely meant to control and move an external asset—rather than becoming the asset itself. This sentiment is often reflected in the BSV blockchain and shows a more responsible approach to Bitcoin/blockchain development, which is too often geared towards speculative price gambling. He also promotes a more welcoming attitude to developers from “the competition,” and his work does this in a way that encourages fascination by demonstrating previously undiscovered Bitcoin capabilities. The BSV blockchain is just as capable of high-level contract and data processing applications as anything else out there (in fact, it’s far more capable), but there must also be ways to make it simpler for outside developers to move over to the BSV blockchain, once they’ve seen what it can do.
Watch: sCrypt applications are proving how powerful Bitcoin is
New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.
>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : CoinGeek – https://coingeek.com/2023-year-in-xiaohui-liu-a-summary-of-scrypt-bitcoin-experiments/