Beyond Runes: How Much Do You Know About These BTC Ecosystem Terms? (Ⅳ)

In the recent Bitcoin halving event of 2024, the Runes protocol notably stole the spotlight. Buyers offered extraordinarily high gas fees to purchase BTC inscribed under the Runes protocol, enabling miners to achieve historically impressive earnings despite the stagnation of Bitcoin price and the rewards halved. Many people started to delve deeper into the Bitcoin ecosystem since then. In the previous report, BITMARS introduced Nostr, BIPs, Mempool, and Bitcoin Full Nodes. Let’s continue today.

1.Index

In the context of Bitcoin, “index” typically refers to the structure within the blockchain database used for rapid data retrieval. For example, the transaction index (txindex) is an optional feature that allows nodes to create an additional database to store metadata for each transaction, including their positions in the blockchain. With transaction indexing enabled, nodes can access information about transactions more quickly, which is particularly useful for developing applications and services, especially for requiring extensive blockchain data queries.

2.OP_RETURN

OP_RETURN is an opcode in the Bitcoin scripting language that allows a small section of data (currently up to 80 bytes) to be embedded into a Bitcoin transaction. This data is non-spendable, thus it is not used as part of the input. OP_RETURN is primarily used for adding metadata to transactions, which can be utilized for various applications such as proving data existence at a certain point and time (time-stamping services), adding simple messages, or enabling more complex blockchain-layer applications. Since this data is permanently recorded on the Bitcoin blockchain, it provides developers with an immutable data storage option.

3.Taproot

Taproot is a significant upgrade to the Bitcoin network that enhances privacy and scalability primarily through a combination called MAST (Merkelized Abstract Syntax Trees) and Schnorr signatures. Taproot makes complex transactions indistinguishable from standard transactions on the blockchain, thereby improving privacy. Additionally, it enhances the network’s scalability and efficiency. Simply put, the Bitcoin ecosystem has been able to evolve thanks to the Taproot upgrade.

4.Schnorr

Signatures Schnorr signatures are a digital signature algorithm proposed by mathematician Claus Schnorr. In Bitcoin, Schnorr signatures were introduced through the Taproot upgrade, aimed at replacing or coexisting with the existing ECDSA (Elliptic Curve Digital Signature Algorithm). Schnorr signatures come with several advantages, including simpler signature aggregation, enhanced privacy, and higher efficiency. Signature aggregation allows multiple signatures to be combined into one, reducing the data size and lowering transaction costs. Additionally, it improves support for multi-signature transactions, making transactions involving multiple parties look just like regular transactions, thus enhancing privacy.

The above is all about the ecosystem terminology complied by BITMARS for our miner friends. Clearly, four issues are not enough to cover all aspects of the BTC ecosystem. If you find this helpful, please leave a comment. BITMARS will continue to produce content related. Compared to the profits of mining, this kind of information may seem boring, complex, and requires continuous efforts to learn, but we do believe that as miners holding coins, if you dare to expand your knowledge, you will gain more diverse wealth.

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