BitVM aims to improve Bitcoin smart contract capabilities without forking. This system proposes a new method for expressing Turing-complete Bitcoin smart contracts. According to a white paper, the system is fraud-proof and utilizes a challenge-response protocol. Thus, it enables any computable function to be verified on Bitcoin.
“BitVM will bring more DeFi usage areas to the network”
Robin Linus, co-founder of blockchain developer ZeroSync, has unveiled a whitepaper for BitVM that aims to improve Bitcoin smart contract capabilities without requiring a soft fork upgrade to the network’s consensus rules. Linus says the system potentially brings more DeFi use cases and scalability to the network. In this context, he makes the following statement about the system:
Any computable function can be verified on Bitcoin. This enables more impressive smart contracts on Bitcoin. In particular, it enables functions that we thought would need a soft fork.
“The most exciting discovery in Bitcoin history!”
According to critic Sam Parker, BitVM means that Bitcoin will now be as Turing-complete as other Blockchains. Turing-complete refers to a system that can perform any calculation given enough time and resources. However, Parker also draws attention to this point:
By technical definition, Bitcoin is not Turing-complete as it was before. It’s just that their programs are given a runtime that we can realistically say is ‘Turing complete enough’ for any program we might want to execute.
According to the whitepaper, potential applications include verifying proofs of validity in games and Bitcoin contracts. “This is probably the most exciting discovery in the history of the Bitcoin scenario,” said the commentator with the pseudonym Super Testnet. It seems like it’s knocking down almost every door. It also gives us access to contracts, sidechains and powers similar to Liquid or Ethereum Virtual Machine (EVM) all at once, without the need for a fork. I can’t wait to release my demo.” he expresses his excitement.
How does BitVM work?
As you know from Kriptokoin.com, Bitcoin’s built-in smart contract capabilities are limited to basic transactions by design. BitVM provides more advanced smart contract functionality by running computations off-chain. The system does not run calculations directly on Bitcoin. Instead, it uses fruad-proof, a challenge-response protocol and Bitcoin’s Taproot upgrade. Thus, it validates in a way similar to optimistic-rollups. A prover claims that a given function produces a certain output given certain inputs. If this assertion is false, the verifier can perform a fruad-proof and penalize the prover. This mechanism allows verifying any computational function on Bitcoin.
Committing extensive programs on a Bitcoin Taproot address requires significant off-chain computation and communication, while the on-chain footprint remains minimal. So, according to the white paper, as long as the parties cooperate, it is possible to perform complex computation off-chain. Additionally, it only requires on-chain execution in case of a dispute.
BitVM limitations and criticisms
While optimistic about its potential, the Bitcoin educator nicknamed Shinobi warns that the cost of off-chain data management is “huge.” He also adds that BitVM’s other major limitation is that it only works with two parties. Bob Bodily, CEO of Ordinals marketplace and launchpad Bioniq, says BitVM is not as good as EVM. It’s also slower, more complex and more expensive, he notes.
Blockstream CEO Adam Back says people are “super excited” about BitVM. Back adds that it may also encounter “pragmatic scalability limits.” Linus states that this is a misunderstanding. Dan Robinson, a researcher at crypto investment firm Paradigm, is more critical. In this regard, Robinson makes the following criticisms:
This is not Turing-complete. This is functional completeness. It won’t work for anything you might want to use it for in practice. Functional completeness means a set of operations that can perform any logical task.
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