BitVM: A Leap Towards Ethereum-Styled Contracts on Bitcoin

A Bitcoin developer has unveiled a method to integrate more dynamic off-chain smart contracts into Bitcoin (BTC) without the necessity for a soft fork. The innovative proposal was introduced on Oct. 9 in a white paper named “BitVM: Compute Anything on Bitcoin.” Authored by ZeroSync’s project lead, Robin Linus, BitVM aims to facilitate Turing-complete Bitcoin contracts without making any modifications to Bitcoin’s consensus rules.

A Turing Complete system, in computational theory, is capable of solving any computational challenge given adequate resources.

BitVM’s design allows Bitcoin contracts’ “logic” to be executed off-chain, while verification is conducted on Bitcoin. This approach mirrors the optimistic rollups found in Ethereum. The foundation of BitVM’s structure lies in fraud proofs and a challenge-response model. In this model, a “prover” can assert claims, and a “verifier” can employ a fraud-proof to penalize the prover if they make false assertions.

Linus elucidated that the current state of Bitcoin is restricted to rudimentary operations such as signatures, timelocks, and hashlocks. However, with the introduction of BitVM, this scope can be expanded. Linus envisions BitVM’s potential to compute a wide array of intriguing applications. He stated, “Potential applications include games like Chess, Go, or Poker, and particularly, verification of validity proofs in Bitcoin contracts.” He further added the possibility of bridging BTC to other chains, constructing a prediction market, or emulating new opcodes.

However, Linus also pointed out a limitation of BitVM. The model is confined to a two-party setup involving a prover and a verifier. To execute programs, a significant amount of off-chain computation and communication is required.

Looking ahead, Linus’s next goal is to fully implement BitVM and introduce Tree++ — a sophisticated programming language tailored for crafting and debugging Bitcoin contracts.

The inception of BitVM was made possible by the Taproot soft fork, which was executed in November 2021. In his white paper, Linus acknowledged Ethereum’s research into optimistic rollups and a study on Merkle Trees as significant contributors to his findings.

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