Bulletproofs enriched and strengthen the position held be Monero in the market. They prove to be quite very well working, they have lower fees and they have moved on Testnet. This will determine MONERO to raise up, while getting trust and consolidation in the market.
What is so specific to Monero is that they increase the confidentiality also by hiding the amount between the transactions. But that implied a new challenge as it was needed to ensure that all the positive (IN) and negative (OUT) transactions needed to be properly reflected in the balance, while everyone should be able to verify and confirm them. For this purpose commitments with algebric capabilities were used, but those didn't prove to be strong enough. Adjacently the amounts need to balance themselves (IN=OUT) and for this purpose there was added the mechanism of range proofs.
This allows to any participant in the blockchain to confirm that a commitment has an amount in a specific range, but this is done without actually indicating the value in clear. Still this faced some challenges when several IN/OUT transactions were involved in the form of 1-to-many or many-to-1.
The solution for this was presented through a paper by Bünz, Bootle, and others which should that there is a better way of handling the range proofs through the fact that the size of a bulletproof raises only logarithmically considering the size of the range, but also the number of outputs. From here two bulletproofs have emerged:
- single-output
- multiple-output = compound from either several single-output proofs or from either one multiple-output proof which is rather smaller than the separate proofs
Let take a view at the common two-output transaction.
I send XMR to YOU and direct the change back to ME:
→ using today range proofs → Transaction size=13.2 KB (1.26%)
→using single-output bulletproofs → Transaction size is only 2.5 kB! It means approximately 80% diminishing in transaction size= Transaction feeds reduced by 80%.
→ using multiple-output proofs → More size and fees reduction than single-output of the transaction size.
Adjacency the time for validating a bulletproof (either single or multiple) is lower than the current range proof used today.
Single and multiple bulletproofs test codes are on the way, the Java test code is almost ready, while the C++ is already done and will be released on Testnet shortly after review and testing.
The problems that were identified with multiple-output bulletproofs will be also addressed and in order to avoid any attacks like DOS, there will be implemented a FEE structure that will scale up in a safely manner to combat such cases.
The release will be incremental, initial phase will deliver single-output bulletproofs, followed later on by two-output bulletproofs. The new enhancements will transpose in better times and lower fees.
As a conclusion the bulletproofs are a big jump for MONERO gaining it multiple benefits like smaller size, better verification times and lower fees. This should consolidate the MONERO position in the market and increase the trust of existing and new investors. It is like an underdog which got its pedigree and is ready to battle.