ZK-gossip for lightning channel announcements

The discussion revolves around the comparison of utreexo and groth16 cryptographic protocols against simpler UTXO snapshots and log-scale ring signatures for improving privacy and efficiency in blockchain transactions. The argument against the log-scaled ring signature method is primarily based on its linear increase in verification time relative to the set size, which could lead to inefficiencies, especially when dealing with large sets. This method, despite offering increased anonymity, might still result in a fragile anonymous set and require significant verification time, undermining its practicality.

Further exploration into alternative methods like utreexo and groth16 reveals an interest in optimizing both the proof time and the size of proofs. The dialogue includes technical inquiries about the performance metrics of these protocols, specifically mentioning an 80-second prove time for a certain implementation, questioning whether improvements can be made to reduce this time further. The conversation underscores the importance of efficient verification processes and the potential of groth16 to achieve small, constant-sized proofs (O(1)), which is considered ideal.

There's an acknowledgment of the realistic possibility of taking regular snapshots of the UTXO set to mitigate some challenges, suggesting that such approaches shouldn't be dismissed outright. The discussion also touches upon innovative functionalities like range proofs within bulletproofs circuits, allowing for concise proofs of aggregated-over-several-UTXOs total amount within a specified range. This concept is exemplified by the development in the FCMP++ project, which proposes using composite values (public key, amount) structured in a tree format for enhanced efficiency and privacy.

A speculative idea presented involves utilizing pairings-based cryptography (e.g., KZG commitments) to potentially achieve more efficient cryptographic operations with O(1) scaling for proofs and cost-effective verification. This trade-off, however, would limit the anonymity set to participants within a specific system, suggesting a model where users opt-in to enhance their transaction efficiency and privacy. One proposed system demonstrating these characteristics is Caulk, noted for its constant proof size and verification time, alongside logarithmic proving computational requirements, showcasing a promising direction for future enhancements in blockchain privacy and efficiency measures.