In-depth Analysis of Taproot Consensus: The Most Native and Decentralized BTC L2 Solution

Taproot Consensus is currently the most native and decentralized BTC L2 solution.

Taproot Consensus is a BTC L2 solution built entirely on Bitcoin's native technology, with its core components being Schnorr Signature, MAST Contract, and SPV Node Network (full name: Bitcoin Simplified Payment Verification Node Network).

Among them, Schnorr Signature and MAST Contract are the core technologies introduced in the Bitcoin network during the 2021 Taproot upgrade; SPV Node Network, also known as the Simple Payment Verification Node Network, is essentially a network composed of Bitcoin light nodes, which is the simple payment verification scheme described by Satoshi Nakamoto in section eight of the Bitcoin white paper. This means that even if some nodes (Bitcoin light nodes) do not have complete transaction records, they can still conveniently and securely verify payments.

So, how does Taproot Consensus work?

First, Schnorr Signature can expand Bitcoin's multi-signature addresses to 1,000, allowing 1,000 Taproot wallet addresses to jointly manage the same BTC asset while ensuring efficiency, security, and privacy. Traditional Bitcoin multi-signatures based on elliptic curve signatures have a maximum limit of only 15 addresses, while Schnorr Signature can achieve sufficient decentralization of multi-signature addresses.

However, merely achieving decentralization of multi-signature addresses is not enough; it is also necessary to realize the automation and intelligence of signatures, meaning it must be code-driven rather than relying on people to sign.

Imagine if a BTC L2 requires a group of people to sign one by one to execute deposits and withdrawals; how inefficient would that be? How can security be guaranteed?

Therefore, after achieving the decentralization of multi-signature addresses, it is necessary to introduce MAST Contract to realize the automation and coding of signatures.

MAST Contract is also one of the core technologies introduced in the Bitcoin Taproot upgrade. MAST Contract stands for Merkle Abstract Syntax Tree Contract, which uses Merkle trees to encrypt complex locking scripts, with its leaves being a series of non-overlapping scripts (such as multi-signatures or time locks). When spending, only the relevant scripts and the path from that script to the Merkle tree root need to be disclosed. It can be simply understood that MAST Contract is a smart contract that can handle multi-signature payments running on the Bitcoin chain (although different from Ethereum's smart contracts, it can achieve the effect of smart contracts when applied to Bitcoin's Schnorr multi-signatures).

With MAST, the intelligence, automation, and coding of Schnorr signatures can be realized, which means the concept of multi-signers is eliminated and replaced by code instructions. This is a very important point.

So, who issues the instructions? The instructions are issued by the SPV Node Network.

That is, a network composed of Bitcoin light nodes operating on the BTC Layer 2 network. It relies on BFT network consensus to drive MAST Contract to issue instructions, rather than being driven by any organization or individual, thus achieving complete decentralization. Why use SPV Node Network (Bitcoin light node network) instead of a regular POS node network? Because Bitcoin light nodes can synchronize Bitcoin Layer 1 data and can conveniently and securely verify payments even without complete transaction records, thus achieving SPV (Simplified Payment Verification).

To summarize:

Schnorr Signature allows Bitcoin multi-signature addresses to expand to 1,000, achieving decentralization of multi-signature addresses.

MAST Contract realizes the coding of multi-signature management, relying on code to drive rather than people to sign.

SPV Node Network achieves multi-signature driven by the consensus of the Bitcoin light node network, fully realizing decentralized Bitcoin cross-chain and management.

Taproot Consensus = Schnorr Signature + MAST Contract + SPV Node Network, this is currently the most native and decentralized BTC L2 solution.

The BEVM team was the first to propose Taproot Consensus and creatively apply it to BTC L2 practice. This team has been launching BTC L2 solutions based on SPV Node Network since 2018, achieving over 100,000 BTC cross-chain and over 500,000 BTC Hash Lock; after the Bitcoin Taproot upgrade in 2021, they combined Schnorr Signature + MAST Contract to propose the Taproot Consensus BTC L2 solution and launched BEVM in May 2023, realizing the complete practice and implementation of Taproot Consensus. In addition to BEVM, BTC L2-Bitfinity, incubated by the ICP Foundation, also uses a similar solution.

It is reported that BEVM will modularize the Taproot Consensus solution and launch BEVM-Stack after going live on the mainnet, supporting any team to deploy BTC L2 with one click while sharing the equivalent security and efficiency of Taproot Consensus, thereby uniting various forces to jointly build and enrich the Bitcoin ecosystem.