Bitcoin Cash (BCH), itself a Fork of Bitcoin, is re-entering Hard Fork on May 15th. The focus of the update is the introduction of Schnorr signatures, an alternative transaction encryption method. Here, Bitcoin Cash – as well as its big brother Bitcoin – still uses Elliptic Curve Cryptography (ECDSA -Elliptic Curve Digital Signature Algorithm). The use of Schnorr signatures promises not only a higher speed but also improvements in the privacy of transaction parties and greater security.
A damper: For the time being no MultiSig
Like ECDSA signatures, Schnorr signatures also create a signature from the transaction and the private key. However, this is more efficient in several ways than ECDSA. On the one hand, Schnorr signatures are somewhat faster to verify than previous signatures. Schnorr signatures also allow multiple parties to create a signature that applies to all their respective public keys. That applies at least to the theory. In practice, the developers of BCH Hard Fork still face problems here, which prohibit the introduction of MultiSig on Schnorr basis. So it says on the GitHub page for the upcoming Bitcoin Cash Hard Fork on May 15:
Due to complex problems with the batch check (see explanation below), OP_CHECKMULTISIG and OP_CHECKMULTISIGVERIFY are not allowed to accept Schnorr signatures for the time being.
This means that one of the biggest advantages of Schnorr signatures in Bitcoin Cash can not be played at first. Especially when it comes to the use as trust accounts, Multisig Wallets is given an outstanding importance. MultiSig Wallets also play an important role in Bitcoin (Core): they form the backbone of the Bitcoin Lightning Network .
No SegWit – no problem?
In addition to the introduction of Schnorr signatures, Hard Fork also provides the opportunity to recover coins sent to SegWit addresses by mistake . Here, the developers had to respond to a bug that has kept with the BCH update from November 2018 entry in the BCH protocol. This has prevented Miner, with so-called “non-standard transactions” erroneously sent to Segwit addresses coins returned to the sender back. For the affected rule ( CLEANSTACK ), the May update introduces an exception that makes it possible to recover BCH frozen in Segwit addresses. However, this does not work without the collaboration with a miner.