Bitcoin’s new generation of multi-signature scheme MuSig2: providing better security, efficiency, and privacy features

MuSig2: A new multi-signature scheme for Bitcoin, offering improved security, efficiency, and privacy features.

Original: “What Is MuSig2?” by Che Kohler

Translation: MK, MarsBit

As a Bitcoin user, you use digital signatures and specific messages to prove that you are the sender, which is a legitimate command as the owner of the private key. These digital signatures are used to indicate that you know the private key associated with the address without exposing your key to the network.

Bitcoin has several signature schemes, each of which is designed to perform different tasks. As the network matures and we use it in different ways, there is an urgent need to optimize the way these signatures are created.

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With the launch of Taproot, Bitcoin continues to evolve, and developers can use these soft forks to build improved signature schemes, providing security, efficiency and privacy for Satoshis. One of the recent developments is Musig1 and its improved version MuSig2, a new signature scheme designed to enhance multi-signature transactions.

What is Bitcoin’s multi-signature transaction?

When you send Bitcoin from one wallet to another, you usually use a single signature transaction, as this is all you need to transfer funds.

Multi-signature, commonly known as multi-signature, refers to the need for multiple keys to authorize a Bitcoin transaction. Distributed signatures are often used to distribute responsibility for Bitcoin ownership, but also to communicate with second-layer solutions such as Lightning and Liquid.

The oldest multi-signature technique in Bitcoin, the “CHECKMULTISIG” OP-code, can be used to create these types of wallets/transactions, which require less communication from multi-signature transaction signers, but have lower privacy than MuSig1 multi-signature schemes, which increase user privacy at the cost of additional steps in the signature process.

What is MuSig1?

MuSig1 is a multi-signature scheme that allows multiple parties to jointly sign a single message or transaction, requiring a certain number of signatures to authorize the transaction. This enhances security and provides additional control over funds. Compared to traditional script-based multi-signature, MuSig uses less block space, but as a trade-off it requires more interaction between participants.

MuSig1 based on Schnorr signatures is a significant improvement over the traditional ECDSA-based multi-signature schemes used in Bitcoin. It allows key aggregation, which means that a group of signers can create a single joint public key and generate a single signature for a transaction.

This process not only simplifies multi-signature transactions, but also reduces the size of transactions, lowers transaction fees, and improves privacy.

What is MuSig2?

MuSig2 is an upgraded version of MuSig1, offering better security, efficiency, and privacy features. Proposed by Blockstream researchers in November 2020, MuSig2 is a two-round multi-signature scheme, meaning that it only requires two rounds of communication between signers to create a valid signature.

This improvement makes MuSig2 more practical and user-friendly by reducing the complexity of coordinating multiple signers.

What is the difference between MuSig1 and MuSig2?

The main differences between MuSig1 and MuSig2 are their communication rounds and security models:

Communication rounds

MuSig1 is a three-round multi-signature scheme that requires three rounds of communication steps to create a valid signature. In contrast, MuSig2 is a two-round scheme, making it faster and more convenient for signers to coordinate their actions.

Security model

MuSig1 relies on the Random Oracle Model (ROM) for its security proof, which assumes the existence of an ideal hash function. However, ROM is an idealized model that may not accurately represent real-world hash functions. On the other hand, MuSig2’s security proof is based on the Algebraic Group Model (AGM), which provides a more realistic representation of cryptographic primitives, thus offering stronger security guarantees.

What will MuSig2 bring to Bitcoin?

Introducing MuSig2 to Bitcoin will bring several benefits, including:

Improved efficiency

MuSig2’s two-round communication model reduces the complexity of coordinating multi-signature transactions, making it faster and more convenient for users.

Increased privacy

Like MuSig1, MuSig2 allows for key aggregation, which means that multi-signature transactions look like regular single-signature transactions on the blockchain. This feature enhances privacy by making it more difficult for third parties to identify multi-signature transactions.

Greater flexibility

MuSig2 supports more complex signing policies such as threshold signatures and hierarchical key structures, giving users greater control over their funds.

Better security

MuSig2’s security proof in AGM provides stronger security guarantees for multi-signature transactions than MuSig1’s ROM-based proof, providing a stronger foundation for multi-signature transactions.

What are the applications of MuSig2?

MuSig2 is particularly useful for applications that require enhanced security, privacy, and efficiency. For example:

Shared Custody

MuSig2 allows multiple parties to securely manage shared funds, such as in a trust or joint bank account, by requiring a certain number of signatures to authorize transactions. This feature reduces the risk of a single point of failure and ensures that no single participant can unilaterally access the funds.

Cold Storage

MuSig2 can be used to create multi-signature cold storage solutions where, as an individual, you may want to split your wallet access into multiple keys rather than a single key to access stored funds. This setup adds an extra layer of security as it reduces the possibility of unauthorized access due to key theft or loss.

Privacy-Protecting Wallets

Wallets that prioritize user privacy can implement MuSig2 to create multi-signature transactions that are indistinguishable from regular single-signature transactions. This feature helps users maintain their privacy on the blockchain without sacrificing the security and control provided by multi-signature transactions.

Improvements to Layer 2 Protocols

MuSig2 can be used in layer 2 protocols such as the Lightning Network to secure off-chain transactions and improve their efficiency. By aggregating signatures, MuSig2 reduces the on-chain footprint of layer 2 transactions, reducing the cost of opening and closing channels, decreasing blockchain bloat, and making it more difficult for chain analysis companies to identify Lightning transactions from standard transactions.

MuSig2 will also assist in optimizing the Liquid Network’s anchoring mechanism, making it cheaper and easier for federation members to manage their bridges. In addition, the Liquid Network has also enabled Taproot, allowing L-BTC users to use MuSig2 in production, so any innovation built on top of MuSig at the base layer can be replicated on the Liquid Network and vice versa.

The improvements to MuSig are essential for Bitcoin.

MuSig2 is a promising development in the Bitcoin world, offering improved security, efficiency, and privacy features compared to its predecessor, MuSig1. By simplifying multi-signature transactions and providing stronger security guarantees, MuSig2 has the potential to unlock new applications and enhance existing ones, making Bitcoin more accessible and secure for users around the world.

With the maturity and widespread adoption of technology, we can expect MuSig2 to play an important role in shaping the future of Bitcoin and blockchain technology. If you want to learn more about MuSig2 on Bitcoin, you can use this article as a starting point, but don’t take our word for it entirely. Take the time to research other sources, and you can start with the following resources:

• BIP 0327
• MuSig2: Simple Two-Round Schnorr Multisignatures
• Bitcoin Ops – MuSig
• MuSig2: Simple Two-Round Schnorr Multisignatures
• MuSig1 Paper
• MuSig2 Paper

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