A New Proposal for Bitcoin Smart Contracts: BitVM
There is a new proposal making waves on crypto social media that aims to bring Ethereum-like smart contracts to the Bitcoin network without requiring a soft fork. Called BitVM, this proposal allows for arbitrary computation to be verified and enforced on the Bitcoin network.
Bitcoin developer Robin Linus released a whitepaper for BitVM on October 9, stating that any computable function can be verified on Bitcoin. This would enable more expressive Bitcoin contracts and potentially trustless sidechains.
How BitVM Works
BitVM works by breaking down complex computations into simple logic gates. These gates can be constructed using Bitcoin scripts and chained together to output the required computations. It is a Turing complete system, meaning it can theoretically solve any computational problem.
The November 2021 Taproot soft fork, which facilitated ordinal inscriptions, enables the implementation of BitVM.
The Potential of BitVM
Users are excited about the possibilities that BitVM brings to Bitcoin smart contracts. It is seen as similar in spirit to the Lightning Network and could be run inside Lightning channels for even greater power and flexibility.
Cryptographer Adam Back advises caution and suggests not getting too excited just yet about this development. However, overall, BitVM opens up new possibilities for Bitcoin smart contracts and computation without needing to make changes to the underlying Bitcoin protocol.
Potential Disadvantages
While BitVM offers powerful capabilities, there are some potential downsides to consider. Encoding complex computations requires generating large logic chains and pre-signed transactions, which can result in high storage and bandwidth demands. Additionally, Bitcoin’s on-chain settlement operates slowly, and integration with the Lightning Network may be necessary to mitigate transaction costs.
In summary, while BitVM brings exciting possibilities for Bitcoin smart contracts, it also presents challenges related to data demands, scalability, privacy, and participation requirements.
Hot Take: BitVM Expands Bitcoin’s Smart Contract Capabilities
BitVM represents a significant development in expanding the capabilities of smart contracts on the Bitcoin network. By allowing arbitrary computation to be verified and enforced without a soft fork, BitVM brings Ethereum-like functionality to Bitcoin. This opens up new possibilities for developers and users who want to build more expressive and complex contracts on the Bitcoin blockchain. While there are potential disadvantages to consider, such as data demands and scalability issues, BitVM has the potential to revolutionize how smart contracts are implemented on Bitcoin. As the ecosystem continues to evolve, it will be interesting to see how BitVM is adopted and integrated into the broader Bitcoin community.
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