Recent media hype by Purse, the biggest marketplace for Bitcoin together with B-Coin (its in-house option for BTC implementation), disclosed the company introduced a scaling proposal known as “To the Moon”. Purse also worked on another approach called Extension Blocks. This is different from the approaches of Bitcoin Unlimited, Bitcoin Classic, and Bitcoin XT or the Segregated Witness soft fork version of Bitcoin Core developers. Johnson Lau, developer from Bitcoin Core, was the first to propose the extension block first in 2013 and early part of this year as auxiliary block. It shares numerous attributes of hard forks. Extension blocks facilitate practically any change in protocols. However, they share a common important benefit with soft forks. These blocks are backward-compatible.
The Soft Fork
Soft forks may be described as protocol changes. These add new rules and intensify new ones. The forks are also called old nodes consider the soft fork (chain) valid since it does not violate any rules. The old can co-exist with new nodes enforcing soft fork on one network. Even as it adds or tightens policies, it may be used smartly to extend capabilities of Bitcoin. Soft forks normally make use of special BTC addresses or outputs (anyone can spend) to accomplish this. Any user can spend them if such addresses hold Bitcoin. It simply means any user can spend them freely. There’s no cryptographic signature or any other requirement for that matter. These new rules stipulate that Bitcoin in said addresses may be spent under specific provisions described by soft fork. For instance, the guidelines recommend that a particular duration should have passed CommVault Systems (CVLT) or a signature is included in the new part of Segregated Witness.
The Extension Block
Such blocks are much like soft forks but are literally bringing this to another level. It looks just like the standard BTC block referred to as base and includes several instructions. There’s one difference. The base block is associated with the preceding and next base block creating the Bitcoin blockchain. On the contrary, the extension block is connected to only a single base block. The extension block makes use of said anyone can spend addresses which serve as entry and exit points going to and from the extension blocks. The old node is misled once any transaction is transmitted from base to extension. Coins are forwarded to typical addresses (outputs) from the old node’s point of view. Coins never go away so far as the old node is concerned. As a matter of fact, the old node cannot even notice extension blocks.
From the outlook of the new node, the coins are forwarded to the new address on the extension block which acts essentially like the usual Bitcoin address. The coins may even move from one address to another or one block to the next. As a result, new nodes see coins going around with changes in ownership. Old nodes fail to see this thinking the BTC remain attached to the previous address. It’s also possible for the new node to send back crypto coins from the extension to the base block’s normal address. This may be done by deceiving old nodes once more. From the standpoint of an old node, coins are repositioned from anyone can spend address. Only new nodes will know where coins originated.
Both nodes can perceive the same thing as soon as coins get back to the base block and regular address. What’s the primary advantage of extension blocks? These do not need to conform with the original BTC protocol in practically any way which leads to a multitude of possibilities. An extension block can generate more opportunities for programming such as Ethereum and Ethereum Classic. It also offers additional confidentiality such as Z Cash, Monero and Mimble Wimble. The proposal of B-Coin is relatively simple. Yet, “To the Moon” blocks are in most cases just larger compared to normal blocks so these are capable of handling more transactions. Also included are Segregated Witness and other additional benefits created particularly to keep up the lightning network above the extension blocks.
There are some downsides notwithstanding the fact that To the Moon as well as extension blocks function technically. At the core of such difficulties, To the Moon is said to be more technically intricate compared to scaling solutions that have been suggested up to the present time. These include all hard forks plus SegWit soft fork. At the same time, execution becomes harder. From the users’ point of view, To the Moon leaves old nodes without any idea more than the soft fork does. Old nodes are not able to determine how crypto coins found in anyone can spend addresses may be used. Old nodes can’t even figure out where these coins are located when it comes to extension blocks. In other words, old nodes cannot track down the coin’s history and can’t spend them for the time being. Reorganization of the Blockchain can transform how a transaction from the extension to the old node appears.
The Lau Theory
Johnson Lau, the original proponent of extension blocks is one of those who are not fond of To the Moon. For Mr. Lau and other people or groups who share his opinion, To the Moon was not able to satisfy the very essential prerequisite of a soft fork which is none other than backward compatibility. On the other hand, he deems these blocks of more as academic subject matter and not as something that is ready for production.
Meanwhile, Bitcoin Core advocate and developer and Bitcoin Knots supporter (Luke Dashjr) cautioned that the extension block is possibly building two components of full nodes. The nodes that were not upgraded are unsteady like the artificial SPV node. For his part, BTC developer Matt Corallo rejects the theory that extension nodes are opt-in. In its place, the whole network must trust this extension block which is truly a very bad example.