In a recent twist in the world of cryptocurrency, the developer community is abuzz with the latest revelations about BitVM, a Bitcoin-based virtual machine. This innovative computing paradigm, introduced by ZeroSync's project lead Robin Linus, comes with a clear mission: to scale Bitcoin. However, it is essential to distinguish BitVM from Ethereum-like DeFi applications. The developer known as "Super Testnet," a key contributor to BitVM's development, has clarified that BitVM's primary objective is to enhance Bitcoin's transaction processing capabilities dramatically, rather than launching smart contracts or DeFi on the network.
This revolutionary computing paradigm, designed to enable Turing-complete Bitcoin contracts, has the potential to transform the Bitcoin network. What is even more intriguing is that this transformation does not require alterations to the network's consensus rules. Instead, BitVM verifies computations, drawing parallels with optimistic rollups, and opens the door for the validation of any computable function on the Bitcoin blockchain.
BitVM's Mission: Scaling Bitcoin, Not DeFi
In a recent announcement, a prominent developer behind "BitVM," a groundbreaking Bitcoin-based virtual machine, has emphasized that the project's primary goal is to scale Bitcoin rather than introducing Ethereum-style decentralized finance (DeFi) applications to the network. BitVM, which drew attention with its whitepaper release on 10 October 2023, is set to revolutionize Bitcoin's capabilities.
Technical Expertise Behind BitVM
BitVM's development is led by Robin Linus, the project head of ZeroSync, with vital technical support provided by the pseudonymous developer known as "Super Testnet." Super Testnet has been actively engaged in implementing BitVM's first proof-of-concept and expanding its functionalities.
Realizing the Vision of Scaling Bitcoin
Contrary to initial misconceptions, Super Testnet has clarified that BitVM's core objective is to enable Bitcoin to process millions of transactions per second. Smart contracts and increasing Bitcoin's expressivity are not at the forefront of BitVM's mission.
Concerns Over EVM-like Tokens on Bitcoin
Super Testnet has expressed concerns over the potential influx of Ethereum Virtual Machine (EVM)-like tokens into the Bitcoin network. He fears that such tokens might attract bad actors and potentially disrupt the Bitcoin ecosystem. Building a decentralized exchange on Bitcoin is seen as a step backward in this context.
While BitVM could divert demand, Super Testnet believes it will not deliver an instant blow to Ethereum's altcoins, offering hope for coexistence within the cryptocurrency landscape.
Bitcoin as the Primary Monetary Unit
Super Testnet envisions Bitcoin (BTC) remaining the paramount monetary unit on the Bitcoin network. He highlights the significance of having a universally accepted monetary asset, preventing the complexities associated with fluctuating exchange rates.
Addressing Lightning Network's Shortcomings
BitVM's payment infrastructure aims to address a shortcoming of the Lightning Network: payment reliability. Despite the Lightning Network's speed advantages, Super Testnet stressed its limitations in terms of payment reliability. BitVM aspires to achieve approximately 60% of the Lightning Network's transaction speed.
BitVM: An Optional Solution
Super Testnet reassures users that BitVM is entirely optional, similar to the Lightning Network. Users can transfer BTC or Bitcoin assets out of the virtual machine into secure cold storage or their preferred storage solution, ensuring freedom of choice and security.
Clarifying BitVM's Capabilities
To clear any misconceptions, Super Testnet explained that BitVM, in its current state, cannot compute "anything" as suggested in the whitepaper. Integrating additional primitives, such as SHA-256 and encryption, is essential to unlock this potential. Nevertheless, Super Testnet disclosed that as of 12 October 2023, BitVM is already processing basic functions.
A Visionary Collaboration
The collaboration between Robin Linus and Super Testnet, who met at a Bitcoin conference around 18 months ago, underscores their unwavering commitment to enhancing Bitcoin's scalability and reliability at the scripting level. BitVM's ongoing development promises to play a pivotal role in advancing Bitcoin's capabilities while adhering to its fundamental principles.
BitVM's Potential to Revolutionize Bitcoin
This groundbreaking computing paradigm has the potential to reshape the Bitcoin network by introducing Turing-complete Bitcoin contracts. Remarkably, this transformation does not necessitate changes to the network's consensus rules. Instead of directly executing computations on the Bitcoin blockchain, BitVM verifies them, bearing similarities to optimistic rollups. This verification mechanism opens the door for any computable function to be validated on Bitcoin, laying the foundation for smart contracts within the Bitcoin network.
The Impact on Ethereum and Cardano
Ethereum, once hailed as the undisputed leader in the realms of decentralized finance (DeFi) and non-fungible tokens (NFTs), has faced a noticeable downturn in recent times. The once-booming DeFi and NFT landscapes have lost some of their luster, as users have grown increasingly cautious due to recurring scams and a perceived lack of innovation following the 2021 bull run. Cardano, positioned as a more efficient and scalable alternative to Ethereum, has encountered its own challenges in achieving widespread adoption.
With the introduction of BitVM to the Bitcoin network, the landscape could undergo a profound transformation. BitVM enables intricate off-chain computations while leaving minimal traces on the blockchain, except in cases of disputes. This feature represents a game-changing leap forward, offering a level of privacy and efficiency that could position Bitcoin as a formidable contender in the smart contract arena.
The Potential Exodus to Bitcoin
If Bitcoin successfully implements and popularizes BitVM, it could potentially lure developers and users away from Ethereum and Cardano. Bitcoin's strong reputation for trust and security, coupled with BitVM's new capabilities, may make it an enticing platform for developers seeking to construct decentralized applications (dApps). Furthermore, Bitcoin's Turing-completeness, allowing it to validate the execution of virtually any program, bolsters its position as a smart contract powerhouse. Although the current BitVM model is limited to a two-party setting, future generalizations could vastly expand its capabilities.
A Paradigm Shift in Smart Contracts
BitVM represents a paradigm shift in the world of smart contracts, introducing a novel approach that leverages Bitcoin's existing infrastructure while adding powerful computation capabilities. While Ethereum and Cardano have pioneered the smart contract space, Bitcoin's entry with BitVM could disrupt the status quo. As this revolutionary technology continues to develop and gain traction within the cryptocurrency community, the industry will be watching closely to see how it impacts the balance of power among blockchain platforms. The future of smart contracts in the cryptocurrency world has just become even more intriguing with the emergence of BitVM on the Bitcoin network.
Meanwhile, the global cryptocurrency market cap slipped 0.41% over the past 24 hours, according to the cryptocurrency price tracking website, CoinStats. Consequently, the market’s combined valuation stood at approximately $1.08 trillion at press time.
During the past day of trading, the market leader Bitcoin (BTC) saw its price slip 0.15%. This brought the cryptocurrency’s price down to $26,801.68. Furthermore, the latest drop in price pushed BTC’s weekly performance further into the red zone to -2.75%.
Similarly, Cardano (ADA) and Ethereum (ETH) also saw their prices drop over the past 24 hours. Data from CoinStats indicated that ADA was down 0.09% to trade at $0.24572, while the largest altcoin in terms of market cap recorded a 24-hour loss of 1.26% - bringing its price down to $1,541.66.
Price chart for BTC (Source: CoinStats)
At press time, the leading cryptocurrency’s 24-hour high stood at $26,910.19, which suggests that this decrease in BTC”s price followed a rejected attempt at overcoming the $27K resistance level during the past trading day. Despite this retracement, BTC was still trading closer to its 24-hour high than its low for the same period, which was situated at $26,578.27.