Will Bitcoin Ever Receive Further Upgrades?

Despite being the first and most valuable coin on the market, Bitcoin is feeling the heat of competition. Since the whitepaper in 2009, Bitcoin has been steadily growing in price, but as the price grew, so too did the quality of what other tokens were bringing to the table. 

Coins like Ethereum, for instance, offer so much more than just digital currency. They are an entire ecosystem, complete with smart contracts, dApps, trading liquidity, and even entire metaverse worlds like The Sandbox. Of course, the price of Ethereum as a coin is small compared to Bitcoin, but the possibilities that its blockchain offers can arguably make it a better investment.

The Longevity Of Bitcoin

So why are users still investing in Bitcoin? Well, Bitcoin’s prestige will play a big factor in its continued value. A volatile market like cryptocurrency is often directed by public sentiment - especially the sentiment of social communities - so when people think of cryptocurrency, they automatically think of Bitcoin, which makes it an immediately dependable investment. As well as this, Bitcoin has a clear use case. It transfers money from A to B. Altcoins like Ethereum, on the other hand, can be almost too complex for first-time investors. 

But, having said this, as the world moves closer to Web3, Bitcoin must develop in order to stay afloat. A number of experts are already predicting that Ethereum will overtake Bitcoin somewhere between 2030-2040, so it is crucial that Bitcoin revolutionises its platform if it wants to compete in a Web3 landscape.

That’s not to say that Bitcoin must create its own version of The Sandbox, either. Instead, Bitcoin must perform a number of practical upgrades, focusing on greater speed, practicality, sustainability and security. It must give investors a simple reason to stick with its blockchain and continue to invest. Most of all, it must be reliable.

With this in mind, let’s look at three incoming upgrades that Bitcoin has planned and how many – if any – are preparing it for the Web3 future:

The SIGHASH_ANYPREVOUT Upgrade

The SIGHASH_ANYPREVOUT upgrade is an updated version of SIGHASH_NOINPUT, which is essentially a type of signing option that occurs when users sign a transaction. Sighash flags are a part of Bitcoin transactions which indicate which part is signed by the private keys, allowing for flexibility to adjust a transaction even after it is signed. 

With this first new upgrade, Bitcoin will allow users to sign all of the transactions apart from the inputs. This means that inputs can be swapped and changed as long as they are still compatible with the transaction's signature. In terms of the new Lighting Network, this should aid users with speed and efficiency, as it does away with the requirements of storing old data for security.

The Sidechains Upgrade

The concept of sidechains has been around for a long time, but if this upgrade were to happen, then Bitcoin would be sure to retain and keep the majority of its investors. Sidechains are essentially alternative blockchains where tokens are pegged to Bitcoin, just as stablecoins are pegged to a fiat currency. This allows users to move BTC across blockchains, which will allow for greater transaction capacity, as well as privacy and a number of other benefits. 

Drivechains will also make use of these sidechains by allowing miners to move their mined coins to a number of pegged sidechains and then back again, which is a process known as bidirectional transferability. They will also remove the validation process for miners, which takes away an impractical, inefficient difficulty check. For miners worldwide, this will be a big incentive to stick with the coin, and it could be the upgrade it needs to thrive in the future.

The Covenants Upgrade

Another potentially impactful upgrade is known as “covenants”, which is a category of changes to the Bitcoin code that will enforce exactly where investors can place their funds. For instance, it would become impossible for users to send Bitcoin to whitelist addresses, which will help against Bitcoin hackers, as well as the easing of congestion control and channel factories. 

These have the potential to be extremely useful smart contracts, allowing the creation of vaults that will protect users if a thief ends up getting possession of a private key. One of the factors of Bitcoin that future investors will be looking for is security and stability, and Bitcoin has clearly pinpointed this in its upgrades. The covenant upgrade should boost the scalability of the Lightning Network, allowing smoother transitions between users and protection, which is crucial in a more digitised future.

Do Any Of These Upgrades Really Help Bitcoin?

These are three upgrades which are expected to happen in the future, each of which will likely be high-impact, much in the same way as the 2021 Taproot was key in catalysing a sustainable growth route for Bitcoin in the long term. They seem to prioritise efficiency, sustainability and – perhaps most importantly – security. This is notable due to the fact that none of the upgrades are noticeably groundbreaking when it comes to the incoming world of Web3. There seems to be little focus on building a corner of the metaverse, like Ethereum, but rather on creating an essential token which can dominate the metaverse itself. This, in many ways, is more subtly groundbreaking than any other drastic upgrade could be.

Of course, the upgrades do not put it on par with ecosystems like Ethereum, but Bitcoin is not trying to be like Ethereum. The price of Bitcoin is the highest because it is the ultimate alternative to fiat currency. To continue being desirable as a digitised, decentralised token, it must create a system which is indomitable and as efficient as possible for new users. It is likely that, as Bitcoin continues to mature – and the rollout of upgrades takes centre stage – more and more users will be encouraged to take part. This will lead to an institutional adoption that will not only boost the price of Bitcoin but cement its stature as the ultimate alternative to currency in the cryptocurrency market.