Adaptor Signature

An adaptor signature is a cryptographic technique in which a signature is deliberately incomplete, tweaked by a hidden secret value. When the final valid signature is published, anyone holding the incomplete version can compute the secret by comparing the two. This turns the act of signing into a mechanism for atomically revealing information.

Why it matters

Adaptor signatures let two parties make trades conditional on each other without trusting an intermediary. If Alice's payment can only complete by revealing the secret Bob needs to claim his side of a deal, neither party can take the money and run. This enables atomic swaps between blockchains and point time-locked contracts, a proposed upgrade to the Lightning Network's routing that improves privacy over today's hash-based contracts.

How it works

The construction relies on the mathematical linearity of Schnorr signatures, standardized for bitcoin in BIP 340 and activated with Taproot in November 2021. A signer adds a secret scalar to the nonce of a 64-byte Schnorr signature, producing a pre-signature that verifies only in combination with that secret. Publishing the completed signature on-chain exposes the difference between the two values, which is the secret itself. Because the final transaction looks like any ordinary single-signature spend, protocols built on adaptor signatures leave no distinctive footprint on the blockchain, improving both privacy and fee efficiency compared with explicit smart contract scripts.