A new technological breakthrough is set to revolutionize the interaction of Bitcoin with complex smart contracts. The BitVM, a protocol that allows for the execution of high-level smart contracts on Bitcoin, has recently been introduced, promising to open up new possibilities for the leading digital currency.
According to its whitepaper, the BitVM is a “computing paradigm” that offers a way to run a Turing-complete computing system, meaning it can support complex smart contracts and function as a virtual machine.
A universal Turing machine is capable of simulating other computer models and executing virtually any compatible computer program.
The BitVM protocol can operate on networks like Lightning or rollups without requiring significant computational resources from Bitcoin nodes.
It does not require changes to the consensus rules of the Bitcoin network, as all program calculations are performed off-chain and only verified by the Bitcoin blockchain.
The BitVM operates through a two-party game, similar to the model used by Ethereum’s optimistic rollups. A prover asserts that a specific function evaluates certain inputs and produces a specific output.
The verifier can then test the truthfulness of this assertion, and both parties must agree to execute programs, such as sidechains and prediction markets, without relying on third parties.
While the BitVM is a notable advancement, it does have some limitations. For practical or highly specific applications, it may not be the ideal choice due to the lack of support for functions like modulo multiplication and division, which are fundamental in real-world programs.
However, the BitVM represents an important step in the evolution of Bitcoin and its ability to interact with smart contracts. Other developments, such as the RGB protocol, are also exploring ways to add advanced functionalities to Bitcoin. It is an exciting technological race to make the cryptocurrency more versatile and functional.
As these protocols and solutions continue to develop, Bitcoin may become even more relevant and valuable in the cryptocurrency landscape. The era of smart contracts on Bitcoin is just beginning, and BitVM is a pioneer in this exciting field of technological innovation.