What is the Bitcoin Optech? [updated September 2018]
Coinbase, Xapo and a host of Bitcoin startups and pioneers are forming a new initiative that aims to help bring solutions to the top virtual currency's scaling problems.
Bitcoin Core developer John Newbery, Coinbase, Xapo and a host of Bitcoin startups and pioneers are forming a new initiative called the Bitcoin Optech that aims to help develop and deploy solutions to the Bitcoin scaling problems.
- Early Bitcoin investors and startups form Bitcoin scaling coalition “Optech”
- The effort will likely lead to an accelerated development and deployment of instant and low fee transactions
- The coalition includes important names like Coinbase, Xapo, BitGo and Square
- Founder John Newbery publishes more information on the Bitcoin Optech [update Stepember 2018] – jump to section
The new project is called Bitcoin Operations Technology Group (Optech).
According to the announcement published July 20, Bitcoin Optech is a non-profit entity has brought together a number of engineers and contributors whose interest is to see Bitcoin succeed.
Bitcoin Optech was founded and is led by John Newbery, who has said that he started the organization in an attempt to help Bitcoin companies that utilize its underlying software adapt scaling technologies that will make them avoid running into scalability issues as seen in 2017 and 2018.
According to Newbery:
“Businesses were caught unawares. At the same time, there was lots of scaling tech that could have helped and that was well-understood, but they weren’t adopted yet.”
In an interview, Newberry went on to explain that SegWit was already available in August 2017, but businesses didn’t take steps to adopt it. Optech aims to deploy new and groundbreaking technologies quicker.
The group has received backing from some of the leading player’s in the technology industry including:
- Xapo and bitcoin evangelist founder Wences Casares;
- Ledger; and
- Chaincode Labs- a group of developers focusing on cryptocurrency research
The group also has the support of other companies that believe such an effort is welcome. They include leading cryptocurrency exchange:
- Square; and
Optech’s stated objective is to help companies and merchants on the Bitcoin network “adopt the best scaling techniques and technologies available”. In so doing, they hope to facilitate the efficient application of the blockchain, to see more adoptions and use cases launch on the BTC network.
Why is Optech needed now?
Bitcoin saw its best year in 2017 when in the run-up to the December price boom, the number of transactions rose exponentially.
With it, however, came another problem – already known – but not experienced. The Bitcoin (BTC) network experienced very poor scalability, leading to slow transactions, network congestion, and abhorrently high fees.
BTC transaction fees swelled enormously, reaching $40 in some instances. Average transactions reached levels above $25, essentially making it untenable for small transactions.
Although the fees have declined to low levels over 2018, they are still very high when compared to other networks. High fees typically also mean congestion in the network, resulting in slow transaction confirmation times.
One of the solutions developed to help handle Bitcoin’s scalability issue was Lightning Network (LN). It is a second layer (off-chain) payment option that works by taking transactions off the main blockchain, reducing transaction overload.
The network will also allow for microtransactions something that is currently impossible with bitcoin.
The LN is still a work in progress and has been criticized. Developers for both BTC and Lightning Network have pointed out that the solution will become better, as it’s the current iteration is in beta testing.
Nonetheless, the beta test is moving quickly and growing, currently supporting almost 120 BTC capacity for payments.
— Lightning Network statistics ⚡ (@LNstats) July 27, 2018
Bitcoin Optech’s focus
In trying to make Bitcoin’s blockchain attractive to users, the group says its focus is on operational technical work. It means that their main goal is to see current technology that companies will find easy to deploy for their businesses.
Although the coalition was formed for scaling problems specifically, it isn’t opposed to helping with new technologies that are coming up (Schnorr signatures, Taproot/Graftroot, and scriptless scripts) later on.
These exciting measures will all help make the top cryptocurrency scale better. However, the team wants to see technology that is already developed like Segregated Witness (SegWit) being used more. Further, coin selection, transaction batching, and fee estimation has yet to be implemented network-wide.
Bitcoin Optech seems to be bringing various groups together, all with the aim of seeing more work towards a better network in terms of scaling. What’s interesting is that companies like Coinbase and Xapo have a massive mainstream userbase and have experienced first hand the scaling issues and limitations. These players will bring tons to the table, aside from engineering power.
Brock Miller, BTC lead engineer at Coinbase believes it will help companies, saying that: “By collaborating with leading engineers in this space, we’ll be able to achieve more than we could have by tackling these problems alone.”
James O’Beirne, an engineer and Optech developer at Chaincode Labs holds the same opinion, saying that
“If Optech succeeds, the Bitcoin ecosystem will have higher rates of technical coordination and understanding; businesses will gain insight from the open source community, and open source engineers will understand the challenges that industrial users of Bitcoin face.”
Developers to come together
The Bitcoin community, especially developers should find this group’s efforts encouraging and be ready to work together.
Optech’s announcement made it clear that they don’t represent Bitcoin (BTC). Rather, they are just developers who have contributed to the project. In fact, they view their work with Bitcoin Optech as being project-agnostic.
It will, therefore, be interesting to see if engineers and managers of companies that utilize the Bitcoin software will heed to their call. If they do, then it will be a great step towards solving Bitcoin’s scalability issues.
Update: September 2, 2018
Update and more information on Bitcoin Optech
John Newbery, founder of the Bitcoin Optech and Bitcoin Core contributor has recently published additional information on the Bitcoin Optech in a recent update of Bitcoin Core V 0.17.
- About Bitcoin Optech
2. The approach:
3. About Bitcoin Optech workshops:
4. About the Bitcoin Optech newsletter:
5. The Bitcoin Optech ‘cookbook’ :
6. Bitcoin Optech engineer forum to discuss ongoing issues and collaborate on projects:
7. Bitcoin Optech’s website:
7. Previs of Bitcoin Optech’s engineering dashboard