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The Next Cardano Hardfork is Here, Introducing CIP-0049

Cardano's CIP-0049 Upgrade Brings Improved Interoperability, Privacy, and Sidechain Capabilities"
CryptoCounsel
Feb 9, 20234 min read155 views

The Cardano community is gearing up for a Hard fork upgrade, which will implement CIP-0049. The CIP brings a cryptography change that will bring several benefits to the Cardano network, including improved interoperability with Bitcoin and Ethereum, enhanced privacy, and a boost to sidechain hyper charging capabilities.

In this article, we will dive into the details of CIP-0049, exploring the world of public and private key cryptography, the SECP256k1 elliptic curve, and the benefits the new change will bring to the Cardano network.

Crypto Key 101

Private/Public key cryptography is the backbone of the blockchain world. Transactions are made possible through a pair of two keys, a public key used to send transactions and a private key that provides access to the funds stored in the associated address.

Private/Public key pairs rely on asymmetric cryptography.

The private key is generated using one-way mathematical functions, which ensures that the public key can only be guessed from the private key and not vice versa. 
This allows for secure transactions in a public setting, with only the owner of the funds being able to spend them.

The Elliptic Curve of SECP256k1

Elliptic curves have trapdoor functionality and strong guarantees for generating public and private key pairs. The SECP256k1 is the name of a specific elliptic curve, and the digital signature schemes of ECDSA and Schnorr use this curve to prove transaction integrity. For example, the verification of Ethereum transactions requires the support of ECDSA.

The Change: CIP-0049

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Cardano currently uses the EdDSA digital signature scheme, which uses different elliptic curves. With the introduction of CIP-0049, the network will add built-in support for the cryptographic schemes used by Bitcoin and Ethereum, allowing Plutus to verify these types of signatures natively. This will bring several benefits to the network, including:

Multisig Privacy:
The addition of Schnorr signature support will improve the privacy of multi-sig transactions and speed up validation.

Interoperability: 
The new change will bolster interoperability and allow for the porting of tooling from other chains. Interoperability solutions like RenVM and Wanchain already use SECP, and EVM sidechain networks will greatly benefit from this new development. Plutus can natively verify signatures generated in EVM sidechains, improving developer experience in process simplicity, cost, and advanced security.

The Upgrade will be implemented using Cardano's hardfork combinator (HFC) approach, ensuring a smooth and seamless transition to the new cross-chain functionality. To ensure a smooth and successful upgrade, the team collaborates closely with key Cardano ecosystem players, including Stake Pool Operators (SPOs), Decentralized Applications (DApps), and exchanges. Despite the upgrade being less complex than previous ones, the organization is taking every precaution to guarantee readiness.

According to recent reports, the team has established the following dates as the target for the upgrade.

Pre-production upgrade: February 11th, 2023 at 00:00 UTC

Mainnet upgrade: February 14th, 2023 at 21:44:51 UTC

It has been reported that an impressive 77% of Stake Pool Operators (SPOs) have successfully upgraded to the new node, surpassing the goal of producing 75% of blocks with the updated node by the time of the hardfork.

The exchanges have been notified of the upgrade and given ample time to make the necessary system changes. This ensures that the transition will be seamless for users who hold their assets on the exchanges.

Additionally, the dApp development community has been polled. While only a few have expressed their intention to use the new functionality, all Dapps must update to maintain compatibility with the latest protocol version. This will ensure that the network remains stable and secure for everyone involved.

In conclusion, the introduction of CIP-0049 is a big step forward for the Cardano network and its vision of interoperability. With this change, the network will be better equipped to handle the demands of the growing blockchain world, bringing enhanced privacy, improved interoperability, and greater hyper-charging capabilities to sidechains. The community is eagerly awaiting the implementation of this new change and what it will mean for the future of Cardano.

We will keep you posted as we move forward. Click here for more information, and Follow Cardano Spot for more updates.

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