Schnorr Signatures Make Bitcoin more Efficient


It is finally possible that the cryptocurrency industry may have finally found a solution to the scalability problem existing on the blockchain. A research study has revealed how the implementation of Schnorr signatures can help in scaling the blockchain network.

Blockchain Brief

Blockchain technology is at the core of the bitcoin and other cryptocurrencies. Whenever a user transfers bitcoin to another user over the network, all active nodes then update the transaction across the entire network. The blockchain can be simply defined as a public ledger of all transactions happening on a network at any point of time.

Every user on the blockchain network has a wallet, and every wallet has two keys, a public key, and a private key. A user shares their public keys to receive bitcoins in his wallet and is best understood as the receiving address.

Whenever a user transfers bitcoin from his wallet to the receivers wallet, the sender digitally signs the transaction. As soon as the blockchain records this transaction, it is then completed, and the receiver receives those bitcoins in his digital wallet.

Every transaction happening over the blockchain network requires space and time for the transaction to be completed. Further, a transaction taking place between a single sender and receiver isn’t complicated.

However, when there are multiple users sending bitcoin to a shared address, it is currently required that all senders individually sign transactions. This process of every sender having to individually sign each transaction is both time-consuming and needs additional bandwidth over the network. This validation mechanism also increases the transfer cost associated with the validation of the block containing this given transaction.


This process also draws more resources from miners who are responsible for keeping the network running. Since more resources are needed to validate a transaction, it results in the cost rising too. In recent times, this increase has become a major technical problem for the network.

The time taken to validate a transaction now takes much longer than before and is also much more expensive. A solution needs to be found if the blockchain industry wishes to have the adoption rates that it so desperately needs to continue growing.

This is where Schnorr signatures can be helpful. A Schnorr signature is where multiple users transferring bitcoin to a common receiver all use the same signature.

This makes the process less time-consuming and causes a transaction to occupy less space in a block, thereby reducing the transfer fee. Schnorr signatures also work on the multi-signature protocol.

The multi-signature protocol was first introduced by Itakura and Nakamura and allows a group of signers to produce a single common signature on a message. This signature can be verified by using the public keys of the members of the group. Schnorr signatures will also help reduce the storage space and bandwidth on the network by an estimated 25 to 30 percent.

As stated in the research:

“Bitcoin today uses ECDSA signatures over the secp256k1 curve to authenticate transactions. As Bitcoin nodes fully verify all transactions signature size and verification time are important design considerations, while signing time is much less so.”

The research further adds that signatures account for a large part of the size of Bitcoin transactions and this makes using multi-signatures much more appealing.

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