1/ Another such innovation is Scriptless Scripts—a way to execute smart contracts off-chain using Schnorr Signatures.
2/ By moving smart contract processing off-chain, Scriptless Scripts could improve Bitcoin’s functionality, privacy, and efficiency.
3/ Currently, Bitcoin smart contracts are processed on-chain using Bitcoin Script, which has negative effects on user transaction costs, network participation resource requirements, and privacy.
4/ In terms of functionality, Scriptless Scripts could increase the range and complexity of smart contracts that are possible with Bitcoin today.
5/ Scriptless scripts move the specification and execution of these smart contracts from a network-wide decision — as is currently the case for smart contracts that execute within Bitcoin Script — to a decision that only involves the participants of the smart contract.
6/ That move from on-chain to off-chain is also what drives the privacy benefits of Scriptless Scripts: Less information is divulged to the public network (terms of contract, participants, etc)
7/ By moving smart contracts off-chain, Scriptless Scripts also offer an efficiency advantage by minimizing the amount of data that needs to be verified and stored on the network level = less overhead for network participants (e.g. full nodes) and lower tx fees for users.
8/ Typically, improvements in privacy and functionality come at the expense of efficiency, but Scriptless Scripts appear to be a rare example that benefits functionality, privacy *and* efficiency.
9/ Other resources: Andrew Poelstra talk at MIT Bitcoin Expo Day 2017 () Transcript by @kanzure (diyhpl.us/wiki/transcrip…), presentation slides: download.wpsoftware.net/bitcoin/wizard…
10/ Other resources cont'd -- a very well-written article by @AaronvanW highlighting the opportunity for Scriptless Scripts (bitcoinmagazine.com/articles/scrip…). A great blog post by @waxwing__ joinmarket.me/blog/blog/flip…
