The goal of this proposal is a statement believing in not only in Bitcoin as a global currency usable by all, but also in the spirit of innovation and liberty. We believe that we can maintain those key aspects of the bitcoin ecosystem with Extension Blocks.

Extension Blocks enable larger blocks through an opt-in second layer for true on-chain capacity increase.

First proposed by Johnson Lau in 2013, Extension Blocks (EXT-B/E-Blocks) are effectively stapled at the end of every block upon activation. The larger block includes advancements that have not yet been activated; including a transaction malleability fix paving the way for Smart Contracts on Bitcoin. In our proposal and implementation, funds can be easily transferred between the canonical block and the extension block, preserving fungibility.

This change is an opt-in for both users and businesses upon activation. While it is heavily recommended for users to upgrade to enable new features and security benefits, it is opt-in meaning older clients can continue using bitcoin without an upgrade.

Notable features:

Opt-in upgrade via soft fork

Immediate block size increase

Flexibility to further increase block size via soft fork

Fungibility to transfer funds in and out of the extension block

Minimal changes for wallet software

Support for Lightning and Smart Contracts

Upgrade path for future innovations (e.g. MimbleWimble, Rootstock)

Once a supermajority of miners have flagged for this change, users can begin using these features enabling entirely new use cases for bitcoin. The upgrade provides a path for even larger blocks and even the flexibility to create additional extension blocks.

A specifications draft is available today for review with demo functionality and code. A working testnet operation will be available within weeks. This proposal is a transparent community process with Bitcoin ecosystem stakeholder participation, including users, miners, and economic industry. In the months ahead, we are looking forward to specification finalization and activation. To the moon!

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