P2WOTS: Post Quantum UTXO Winternitz Signatures

The revised proposal for a post-quantum Bitcoin protocol introduces the use of lightweight Winternitz signatures to address specific challenges inherent to Bitcoin's UTXO model, differing fundamentally from Ethereum's account-based structure. The original implementation of WOTS-39 was tailored for the Ethereum Virtual Machine (EVM), where it leveraged Lamport authorization chains to verify Winternitz public key uploads for each message signature. This method proved efficient on EVM due to its design to facilitate smart contract executions and easy tracking of transactions within a single account.

However, Bitcoin operates differently by treating each Unspent Transaction Output (UTXO) as an independent entity, complicating the tracking and verification processes under a unified account. The new proposal acknowledges these differences and adapts the Winternitz signatures accordingly. Instead of relying on account objects, the proposal utilizes the transaction ID (TXID) as a unique anchor for signatures, ensuring the uniqueness of each public key without repetition.

A significant element of this proposal is the introduction of a new native Bitcoin output type, referred to as witness version 2. This system allows the creation of a fresh Winternitz public key (wots_pk) that is incorporated into the receiver's address each time they wish to receive funds. This method not only enhances security but also maintains compatibility with existing Bitcoin protocols such as Taproot and multi-sig functionalities, and even supports the ongoing operation of the Lightning Network. All these advancements are proposed to be implemented without necessitating a hard fork, thanks to compatibility with BIP-141.

It's important to note that while this proposal enables post-quantum security measures for individual transactions, it does not extend these benefits to multi-signature configurations under the same technology. Existing Schnorr multi-signature mechanisms would continue to operate unchanged.

For further details on the proposal and access to the source code, you can view the proposal here and the source code on GitHub. Additionally, an in-depth exploration of the WOTS-39 methodology can be found in the accompanying WOTS-39 essay.