Decentralized Transaction Merging: A New Opportunity for Ethereum
As the world’s largest smart contract platform, Ethereum has long been known for its complexity and limitations. For users who need more flexibility in their transactions, a new opportunity is emerging: decentralized transaction merging (DTM). In this article, we will explore whether it is possible to combine two separate transactions into one using only their signatures.
Background
Ethereum’s current consensus algorithm, Proof of Work (PoW), has long been the standard for validating and adding transactions to the blockchain. However, as the network has grown in size, scalability has become a pressing issue. Traditional solutions rely on complex cryptographic techniques, such as multi-signature wallets or hierarchical deterministic (HD) wallets, to enable secure and efficient transaction merging.
Signatures: The Key to Decentralized Transaction Merging
Signatures are a fundamental concept in cryptography, used to prove the identity of a user and verify transactions. In traditional PoW systems like Ethereum, signatures serve as a means of validating transactions and creating new blocks on the blockchain. However, they also introduce significant limitations to decentralized transaction merging.
Two Separate Transactions with a Single Signature
Suppose we have two valid transactions, A and C:
1) A -> B
2) C -> D
Each of these transactions has its own set of inputs (A, B) and outputs (C, D). We want to combine them into a single transaction that uses only their signatures. This is theoretically possible using a cryptographic technique called “signature merging”.
Signature Fusion: Theoretical Basis
In Ethereum, signature fusion involves combining two or more signatures to create a new one. However, the underlying mathematical principles and assumptions have not been explicitly defined yet.
Our proposal for combining A and C into a single transaction uses the following steps:
- Create a new public key for the combined transaction.
- Use the signature of A as an input and generate an output with a value that is equal to the sum of the values produced by all the inputs of A multiplied by some constant (k).
- Use the signature of C as an input and generate an output with a value that is equal to the sum of the values produced by all the outputs of C multiplied by some constant (l).
Sample Code
To illustrate this concept, we will use Python code to demonstrate how to combine two transactions using signature fusion:
“` python
import hashlib
import json
def combine_transactions(transaction1, transaction2):
Create new public keys for the combined transaction
combined_public_key = hashlib.sha256((transaction1[‘input’] + transaction2[‘output’]).encode()).