We’ve introduced read-only transaction inputs — an upgrade that is improving how smart contracts and transactions operate. This feature is an integral step towards the highly anticipated hard fork and offers developers exciting new capabilities for building efficient and scalable decentralized applications (dApps). So, what exactly are read-only transaction inputs, and why are they a game-changer?

Efficiency with Read-Only UTXOs

This upgrade introduces the ability to include inputs in a transaction that do not spend the underlying UTXO (Unspent Transaction Output). In simpler terms, this allows transactions to "read" data from the blockchain without consuming or modifying that data. Previously, in UTXO-based blockchains like Bitcoin, using an input would mean that the input is "destroyed" and cannot be reused. This is problematic for various blockchain architectures that require multiple users or transactions to access the same data.

Key Advantages:

• Parallel Access: Multiple transactions can now read the same UTXO simultaneously without waiting for previous transactions to clear. This eliminates the need for a “queue,” where transactions would otherwise have to line up to access the same state data.
• Efficiency in Smart Contracts: Developers can design more efficient contracts that allow for data to be accessed without unnecessary duplication or destruction of state.
• Proof of Ownership: Users can prove ownership of assets (such as tokens or Nexa) without consuming the UTXO. By importing a UTXO as read-only and signing it, they can provide proof of ownership efficiently without needing to regenerate the state each time.

Single Maintainer, Many Users

One of the major applications of read-only UTXOs addresses the "single maintainer, many users" design pattern, which is common in decentralized apps. In the past, only one user could interact with a piece of state at a time because using that state in a transaction would destroy it. Other users would have to wait, essentially forming a transaction chain where each user modifies and recreates the state. This caused scalability bottlenecks in scenarios where multiple users needed to interact with the same piece of data. Nexa’s read-only inputs solve this by allowing multiple users to access the same data simultaneously, without destroying or altering the state. For example, imagine a blockchain application where one entity maintains a central piece of state, such as a shared ledger or contract. Previously, every user accessing that data would have to modify it, leading to a bottleneck where only one transaction could be processed at a time. With read-only inputs, however, multiple transactions can access the same state without interference, paving the way for much more scalable applications.

Enhancing Smart Contracts and the Role of Group Authorities

A particularly exciting use case for read-only UTXOs is in the handling of group authorities with the BATON flag set. Group authorities define who has control over certain token operations, such as minting new tokens or creating child authorities. Previously, if you wanted to perform an operation like minting new tokens, the contract would have to consume the mint authority and recreate it in a new UTXO. With read-only inputs, however, developers can now import the authority as read-only, perform the desired operation (such as minting tokens), and leave the authority intact. This simplifies contract design and reduces the risk of accidentally "losing" authority, making operations more efficient and easier to manage. In decentralized applications like NiftyArt, which deals with minting NFTs, this improvement can significantly reduce complexity. NiftyArt previously had to manage mint authorities carefully to ensure they weren’t left in limbo if a user didn’t accept an NFT minting offer. With read-only inputs, the authority can be offered repeatedly without consuming it, vastly improving user experience and application flow.

Security and Validation: What’s Changed?

Even with these advanced features, the read-only inputs maintain a high level of security and are subject to strict validation rules. Some of the key validation rules include:

• A transaction cannot consist solely of read-only inputs. At least one traditional UTXO input must be included to ensure the transaction is valid.
• Read-only inputs cannot have a value attached to them (nValue must be set to 0), and they are excluded from the total input value during transaction validation.
• They are excluded from undo data since they don’t create any changes in the UTXO set. Moreover, read-only inputs play a unique role in block validation, using a ROTOTI (Read-Only, Then Outputs, Then Inputs) approach. This sequencing ensures that read-only inputs are conceptually evaluated before outputs and inputs, allowing for safe parallel reading of the same UTXO across multiple transactions without risking a state conflict.

Paving the Way for a Scalable Future

The addition of read-only transaction inputs is a major step forward for the Nexa blockchain. It boosts scalability, efficiency, and simplifies development, especially for applications where multiple transactions need to access the same data. As Nexa moves toward its upcoming hard fork, this feature empowers developers to create scalable decentralized apps, pushing the limits of traditional blockchain technology for a more secure and efficient future.