According to CoinDesk, a research paper published this week outlined a new paradigm called BitVM, which aims to bring Ethereum-style smart contracts to the Bitcoin network. The paper was authored by Robin Linus, a core contributor to ZeroSync, a project developing tools for using zero-knowledge proofs on Bitcoin. BitVM's goal is to enable Turing-complete Bitcoin contracts without making the network more complicated for other users. Computations would be performed off-chain and then verified on-chain, similar to the mechanics of optimistic rollups on Ethereum.
The protocol involves two parties: a 'prover' and a 'verifier'. The prover makes a claim of a specific function producing a particular output when given certain inputs. They pre-sign a sequence of transactions, enabling a challenge-response game between the two of them. They then make on-chain deposits to a Bitcoin address, activating the contract and they start to exchange off-chain data, with the verifier able to take the prover's deposit if any incorrect claim is made. This should mean that attackers always lose their deposits, Linus wrote.
However, BitVM's proposal has received mixed responses, with some commentators pointing out its limitations. Pseudonymous bitcoin writer Shinobi noted that the cost of off-chain data management is 'massive,' and the protocol only involving two parties - the prover and the verifier - is also a 'big limitation.' Bob Bodily, CEO of Ordinals marketplace Bioniq, compared BitVM to a very early limited version of the Ethereum Virtual Machine (EVM), but also acknowledged that it is an amazing breakthrough with solvable issues. 'Over the next few months I expect many of these holes to get filled in, at which point we will have more capable Bitcoin script without a Bitcoin upgrade,' he said.
Efforts to implement smart contract capabilities in the Bitcoin network are not new. Developers have been trying to find ways around the network's limitations due to its simpler scripting language compared to blockchains like Ethereum or Solana. In December last year, blockchain project Stacks published a whitepaper presenting its digital assets 'Stacks bitcoin' (sBTC), pitched as a way of bringing smart contracts to Bitcoin.
