Bitcoin’s new Era OP_CSV, Segregated Witness And how it relates to Bitcoin at Visa’s scale

What the Block Size is about

What Lightning Network is about

1.Bitcoin does not scale 2.bitcoin does scale TL;DR

« Off Chain » Definition Off ChainOn Custody “Makes the difference, it can save your life” MtGox Creditor

OP_CSV and Segwit are the base of future innovation Bitcoin Protocol 1 to 1 Off Chain payment 1 to Many Off Chain payment

What does a world with LN looks like? Source: Tadge Dryja talk at Scaling Bitcoin ( Transaction / Sec Unlimited

Bitcoin Protocol Bitcoin Protocol Layer

OP_CSV “Fails the script if this coin’s age is below X” X = Block counts or time span

OP_CSV 3 OP_CSV OP_DROP Jim OP_CHECKSIG Broadcasted MinedSpendable

OP_CLTV “Fails the script if the date is below X” X = Block counts or time span

OP_CLTV 109 OP_CLTV OP_DROP Jim OP_CHECKSIG Broadcasted Mined Spendable

Segwit “Let’s put the signature out of the transaction id”

Segwit Before After TxId (P2PKH) (P2W*)

Segwit P2W* ScriptPubKey: 0 e4873ef43eac347471dd94bc899c51b395a509a5 ScriptSig: Empty Result: Valid For Old Nodes:

Segwit P2W* ScriptPubKey: 0 e4873ef43eac347471dd94bc899c51b395a509a5 ScriptSig: Empty Result: Valid For New Nodes: WitScript: Signature1

Segwit P2W* ScriptPubKey: 0 e4873ef43eac347471dd94bc899c51b395a509a5 ScriptSig: Empty Result: Valid For New Nodes: WitScript: Signature1

Payment Channels 1 to 1 Off Chain payment

Payment Channels We’ll do a lot of business Let’s create a payment Channel

Payment Channels Broadcast Open the Channel Broadcast Close the Channel

Payment Channels Commitment 0 0.5

Payment Channels Commitment

Payment Channels

Payment Hub 1 to Many Off Chain payment

Payment Hub

1.Requires trust into all PH to destination 2.PH are Money Transmitters 3.PH needs to lock enormous reserves 4.PH are a systemic risk Problems

Lightning Network

Lightning Network (Simplified) How can Alice send 5 BTC to Bob without trusting Jim ? Hash Time Locked Contract (

Lightning Network (Simplified)

1.The HLTC output miss conditions 2.Jim never has custody over the money 3.Jim does not have to trust Alice&Bob Notes