Author: Medici

Last month, @atomicalsxyz released the Atomicals Virtual Machine (AVM) whitepaper, focusing on introducing programmability and smart contracts on Bitcoin L1.
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main problem:
The UTXO model is limited in that builders cannot customize asset behavior because the rules of the state machine are immutable - this requires a more flexible dynamic "state machine" model to record changes in asset status.
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The community proposed two potential solutions:
1. Build external protocols; move the "state machine" off-chain, similar to L2 solutions. For example, RGB, Lightning Network, CKB.
2. Implement new opcodes (OP_CODES), such as OP_CAT or adding Covenants.
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AVM proposes a hybrid solution:
Introducing an overlay protocol indexer: emulating Bitcoin Script and introducing custom opcodes, adding mutability. This will allow the creation and execution of smart contracts.
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The simulation will be run in a sandbox environment to ensure that there is no interference with the BTC network. This will constitute a state change, including verification before it is published on the BTC chain for execution.
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The introduction of the AVM — the execution of smart contracts on Bitcoin using an overlay digital asset indexer, if it were to be put into practice, could potentially make up for BTC’s lack of programmability and smart contract integration.
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By providing a practical example of the concepts introduced, the AVM may become a solid solution to enhance Bitcoin’s functionality and scalability. We look forward to more developments in the future.



#AVM #ARC20