SHRINCS: an efficient hash-based signature scheme for Bitcoin (first draft)

The discussion revolves around the specifics of the SHRINCS BIP (Bitcoin Improvement Proposal), which is a cryptographic proposal that does not address cost accounting elements. The role of this BIP is akin to BIP340, focusing solely on defining the signature scheme, key formats, and usage protocols without delving into deployment logistics or cost implications. For SHRINCS to be integrated into Bitcoin, an additional BIP would be necessary to embed it into the consensus mechanism and address considerations related to size and computational costs.

In the comparison of transaction weights provided, SHRINCS signatures are significantly larger than Schnorr signatures. For instance, a typical transaction with two inputs and two outputs using P2TR plus Schnorr results in a total weight of 840 WU (witness units), whereas the same transaction structure using P2MR plus SHRINCS (stateless) yields a much higher total weight of 12,426 WU. This indicates a roughly 14.8 times increase in transaction weight when using SHRINCS over Schnorr. Despite the substantial increase in signature size with SHRINCS, this does not directly translate to a proportional increase in fee costs due to other factors like transaction weight and potential changes in the fee market.

Furthermore, the adoption of SHRINCS could lead to changes in the fee market dynamics, especially if no adjustments are made to block sizes or witness discounts. The network throughput might decrease, potentially driving up fee rates. The extent of these changes would likely depend on the availability and use of stateful components of the signature scheme or the presence of other post-quantum signature algorithms that may offer different efficiencies and costs.