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

This prototype is designed to provide compact and efficient cryptographic signatures compatible with post-quantum security requirements. The public keys under this scheme are notably small, at 48 bytes, with signature sizes varying between 548 and 5777 bytes depending on their stateful or stateless nature. The verification process of these signatures is significantly faster than the current BIP340 Schnorr signatures, offering a speedup of approximately 4x to 16x, facilitated by SHA256 hardware acceleration.

However, the draft highlights several limitations and areas needing further development before it can be safely implemented in production environments. The stateful aspect of the scheme requires sophisticated management software to handle the incrementing state counter that tracks the number of signatures made, which could pose security risks if mismanaged. Furthermore, the key generation and signing processes are computationally intensive, although potential improvements could be achieved through SIMD, parallelism, or additional hardware acceleration. Recent enhancements have improved its interoperability and flexibility, making it suitable for high-frequency applications such as those required by the Lightning Network.

Community feedback is currently being solicited to refine various aspects of SHRINCS, including its design, parameters, and cryptographic robustness. An interactive tool has been provided to facilitate community engagement and exploration of different parameter sets. The draft and ongoing discussions can be accessed at SHRINCS.md, and further insights into the proposal can be gained from a video interview available at this link.

Separately, discussions within the developer community, including inputs from Antoine, have pointed towards the need for additional considerations regarding the operational and implementation specifics of SHRINCS in real-world applications. Concerns were raised about the absence of specific modes for accounting practices and the challenges of implementing stateless transactions off-chain without increasing operational costs drastically. These discussions underscore the complexity of integrating such cryptographic improvements into existing systems without escalating transaction fees or compromising on network throughput. It is evident that while SHRINCS offers promising advancements in cryptographic practices, substantial work remains to ensure its practicality and security in broader cryptocurrency applications.