1. Cheaper transactions with Segregated Witness (SegWit).
SegWit is another scaling solution, it basically removes certain non-critical data from Bitcoin transactions to make them smaller in size which allows more transactions to be included in each block. SegWit was initially activated on August 24, 2017. However, most bitcoin transactions have not been able to use the upgrade.
In 2018, we might actually see SegWit rolled out across the entire Bitcoin network. So sometime in May the Bitcoin core wallet interface will allow users to send and receive SegWit transactions. Throughout the year, many of these huge companies like Coinbase actually will implement and use SegWit as well. This is a big deal when you consider just how many of the total transactions on the network these companies are responsible for. So greater SegWit adoption across the board will mean less network congestion, which means cheaper transaction fees and faster conformation times.
2. Instant transactions with the Lightning Network.
If the release of SegWit was the main event of 2017 then you could say that the main event of 2018 will be the release of the Lightning Network on the Bitcoin network. It promises almost instant confirmation times while maintaining the security of the Bitcoin protocol. The Lightning Network is made up of bi-directional payment channels between two nodes which combined create smart contracts. If at anytime either party drops the channel, the channel will close and be settled on the blockchain.
In other words, Lightning Network uses smart contracts to create payment channels that allow people to transact value off the chain. Meaning that they will not have to deal with any of the slow confirmation times or high transaction fees that people have become accustomed to, when making transactions on the public blockchain.
If this is successfully implemented, then it will go a long way to dealing with many growing pains relating the scalability that bitcoin is dealing with today. On top of that, it will contribute enormous lead towards Bitcoin once again becoming a fast and affordable payment method for people to use.
3. Some great new privacy features for Bitcoin.
Most of the newcomers enter the cryptocurrency in Bitcoin space under the false impression that bitcoin is totally anonymous cryptocurrency that nobody can track. That is simply not the case at all. Hopefully with some of these developments we can at least slowly start working towards that, If the community decides that Bitcoin would like to go down that route or at least give people the option to do that kind of stuff.
To give you an example, one of these projects is called TumbleBit and the clue is in the name as to what it’s all about. It will act as a tumbler by mixing coins together so that people end up with different bitcoins to the one that they started with. Tumbler eliminates any potential trail that you would have otherwise left online. So allowing for a greater degree of privacy will bring additional use cases and value to the Bitcoin network as a whole.
4. Improved payment experience with almost immediate confirmation: Rootstock (RSK).
In 2018 we are going to see some sidechains rolled out, that will help take the burden off the Bitcoin blockchain by having transactions secured on a completely separate blockchain altogether. Probably the best-known example of this that we’re going to see in 2018 is RSK or Rootstock.
Rootstock (RSK) is a smart contract platform that is connected to the Bitcoin blockchain through sidechain technology. This is a sidechain that will bring turing complete smart contracts allow Ethereum to Bitcoin.
Sidechains on the whole get a bit of a mixed response from people because on the one hand it allows for greater flexibility in terms things you can do, greater privacy faster transaction or confirmation times. On the other hand you are trading that for security in the eyes of some people so you know whether or not you are “for” or “against” the idea of having more sidechains kind of operating on top of the Bitcoin protocol. It’s an interesting development nonetheless.
5. Improved privacy and spam reduction: Schnorr signature
We should also see an improvement of Bitcoin protocol for Schnorr signature in 2018. Schnorr signature allows you to send transactions from multiple addresses that you might have scattered around the place to one receiver using only one signature instead of requiring a signature for every single transaction from each address. This might not sound particularly exciting or mind-blowing in any way but it’s actually important furthering bitcoins scaling capacity.
It has been estimated that this reduction in the number of signatures required could actually increase bitcoins maximum transaction capacity by up to 33%.
6. Swap Bitcoin for Litecoin with Atomic swaps.
You might have heard about Atomic swaps before especially back in November 2017. When Bitcoin and Litecoin achieved an atomic swap, a frictionless free exchange between the coins during tests of the Lightning Network.
Atomic swaps would allow people to exchange different cryptocurrencies in a completely trustless way without depending on a third party at all. With no risk of one party defaulting on the other either. This is great because it means less reliance on those annoying inefficient centralized exchanges that we have all come to hate. It also helps enormously with Bitcoin scaling too.
If you haven’t already checked out an article written by Charlie Lee – the creator of Litecoin, here is what he says about it:
I just published “My Vision For SegWit And Lightning Networks On Litecoin And Bitcoin” https://t.co/lGOzDCxSrd
— Charlie Lee [LTC] (@SatoshiLite) 6 января 2017 г.
He discusses how atomic swaps will help the scaling of Bitcoin in the future. Because if the Bitcoin network has ever congested, people can use the atomic swaps feature to swap that Bitcoin for Litecoin or some other kind of cryptocurrencies as well to allow for quicker and cheaper payments at any given moment in time.
These are some of the main things to look forward to this year in terms of development for Bitcoin in 2018. There is a lot of work being done by some incredible people out there right now to help Bitcoin scale to become a truly mass adopted global currency.
Besides all the techie stuff, there are still just so many exciting things to look forward to in 2018. We have the prospect of Bitcoin ETF throughout the year through the institutional and retail investments, more mainstream awareness and adoption further, media coverage in CNBC and all these other news outlets.
Bitcoin still absolutely dominates when it comes to general branding and brand association, because if you ask people on the street while they think of cryptocurrencies in general there is only one currency that actually comes to their minds and that of course is Bitcoin.
For all these reasons, Bitcoin should have an absolutely incredible 2018.