Cross-chain bridge vulnerability
The past few years have seen a surge in security incidents in the blockchain space, especially those targeting cross-chain bridges, where networks facilitate easy communication of smart contracts running within the same chain but cannot Operation outside the chain.
This is what chain bridges are for - they help connect different blockchain networks so that value and information can be transferred from one network to another, however, these bridges are prime targets for hackers due to their easily compromised architecture.
The Global Web3 Security Report shows that 12 incidents involving these chain bridges caused nearly $1.89 billion in losses in 2022. More broadly, 167 security issues occurred throughout the year, resulting in a total loss of $3.6 billion, more than half of which Only lost due to chain bridge accident.
Research points out that hackers have found ways to exploit weaknesses in private key management, smart contract code vulnerabilities, and centralized storage of user funds.
Does this mean that such protocols that facilitate inter-chain value transfer should be avoided entirely? Not necessary, cross-chain value transfer and communication between different chains is essentially the next stage in unlocking the expansion of the Web3 space.
Internet Computer’s Chain Key Bitcoin (ckBTC) extends the capabilities of Bitcoin, the world’s most secure network, without relying on cross-chain bridges.
Bitcoin Layer 2 Features
The Bitcoin blockchain has all the properties of being the most durable layer for exchanging value between users, however, the Bitcoin blockchain lacks a programmable layer, i.e. unlike Ethereum, the Bitcoin network does not provide support for complex smart contracts and building Ability to centralize applications, Bitcoin’s emphasis on security and decentralization is a fundamental aspect of its design.
Chain Key Bitcoin (ckBTC) is a token that leverages native integration with the Bitcoin blockchain at the protocol level without the interference of intermediaries, custodians or bridges, ckBTC acts as a native token on computers across the internet, representing real Bitcoin And encrypted and protected in a 1:1 manner.
So what does protocol-level integration mean? Internet computers can communicate directly with the Bitcoin blockchain through Bitcoin nodes running on a subnet of Internet computers.
In the context of Bitcoin integration on ICP, containers (powerful smart contracts) are able to perform operations such as sending, receiving and holding Bitcoin locally. Through this integration, ICP activates Bitcoin's programming capabilities and expands its Properties to build decentralized applications on the most secure and proven cryptographic infrastructure.
Let’s look at some of the benefits and value creation that come from integrating Bitcoin with ckBTC.
1-2 seconds finality
Finality in blockchain refers to the time it takes for a transaction to be added to the blockchain and considered immutable, in other words, the time it takes for a transaction to be permanently recorded on the blockchain and irreversible.
For Bitcoin, transactions are finalized after six blocks, so you have to wait approximately 6 blocks for your transaction to be confirmed, which translates to a wait time of 60 considering the average time per block is 10 minutes minute.
ckBTC can achieve near-instant transaction finalization, with transactions confirmed within 1-2 seconds. This level of fast finality can increase throughput and efficiency, thereby promoting the scalability of blockchain applications.
Transaction fees are negligible
The ckBTC transaction fee on ICP is designed to be minimal, it is set at 0.0000001 ckBTC, which is equivalent to less than one cent or 10 satoshis. Users only need to pay the transaction fee of the Bitcoin network when exchanging Bitcoin to ckBTC and vice versa. Of course.
Trivial transaction fees allow users to benefit from fast, low-cost transactions, thereby enhancing the overall user experience. Additionally, lower transaction fees facilitate microtransactions or micropayments using Bitcoin.
no trust required
Bitcoin integration uses cryptography to enable each smart contract container to generate its own public key. These smart contracts can interact directly with the Bitcoin blockchain and send, receive and hold Bitcoin. With ckBTC, the container smart contract is responsible for minting and Redeem tokens instead of centralized third-party or bridging solutions.
The conversion of ckBTC to BTC and vice versa is controlled at the Internet Computer Protocol level, which is accessible to all ICP decentralized applications (dapps), ensuring that no central authority has the authority to limit or censor these conversions.
Additionally, all transactions are transparent and can be verified via a real-time dashboard, allowing users and developers to instantly understand the flow of assets and the integrity of the conversion process.
Therefore, each ckBTC corresponds to one BTC held in a Bitcoin blockchain address controlled by a container smart contract on the IC. This model ensures that the process is completely trustless and controlled by automated software programs (smart contracts). )manage.
Unlocking Bitcoin-based Web3
By making Bitcoin programmable, ckBTC enables Bitcoin holders to participate in the DeFi ecosystem, thus activating the world's largest crypto economy. It provides a secure and scalable environment for using Bitcoin in DeFi applications, including Lending, asset management, decentralized exchanges, etc.
Through integration, BTC has transcended its traditional role and branched into DeFi applications and can be used as collateral for loans or collateral for liquidity mining. These innovations are not only suitable for niche communities, but also niche communities.
They pave the way for BTC to enter the mainstream, potentially revolutionizing retail payments through adoption for daily transactions and enabling micro-transactions with BTC. In addition to DeFi applications, Bitcoin integration will open up the possibility of using BTC in GameFi, SocialFi, and NFTs, among many others. The door to using BTC in different applications.
By establishing a direct link between the Bitcoin network and computers on the Internet, ckBTC eliminates the need for chain bridges, thereby reducing the risks associated with chain bridges.
This approach not only solved the security problem, but also brought Bitcoin into a world with better adaptability and user experience, which subsequently changed the narrative of Bitcoin from being just a digital vault of value to becoming a Web 3 active participants.
Further reading:
Chain-Key Bitcoin: The decentralized twin of Bitcoin
ckBTC is Bitcoin on Web3
Bitcoin <>ICP
Taking security seriously: Two top ICP features evaluated by Trail of Bits
MyLugano Crypto Payment App Adds Support for Internet Computer’s Multi-Chain Bitcoin ‘Twin’
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