Essentially, key aggregation is a way for multiple parties to combine their public keys/signatures into a single public key/signature.
The privacy implications here are mind-blowing.
Discussion
With Schnorr Signature key aggregation, multi-sig outputs look exactly the same as single sig outputs on-chain.
This makes it impossible for chain analysis firms to distinguish between multi-sig and single-sig spends.
*evil laugh*, cypherpunks win again, Monero shills in disbelief, etc..etc..
Schnorr sig aggregation is also a huge improvement to the Lightning Network.
The LN relies on 2-of-2 multisig transactions for channel opening.
With Schnorr aggregation, LN channel opens will look exactly the same as any other single-sig output on-chain.
And since LN channels inherit the privacy of the UTXOs used to fund them, this will be a huge improvement.
So can we use key aggregation today?
A draft BIP was just submitted to the Bitcoin Core repository.
https://twitter.com/real_or_random/status/1640337134199640065
The BIP still needs to be tested, but once approved by consensus, the community can begin to activate it.
The activation will ultimately be decided by the nodes on the network.
We hope to see key aggregation in the wild soon!
