BitVM enhances Bitcoin's functionality without altering its core programming language, Bitcoin Script, by using existing features in innovative ways and moving complex computations off-chain. This approach allows developers to introduce more sophisticated applications to Bitcoin while upholding its principles of security and decentralization.
Here's how BitVM achieves this:
Leveraging Existing Features: BitVM cleverly utilizes Bitcoin's existing features, such as hashlocks and timelocks, to introduce a level of programmability without altering Bitcoin Script.
Hashlocks are like digital locks that can only be opened with a specific cryptographic key, enabling conditional transactions where funds are released only upon the revelation of a secret.
Timelocks impose time-based conditions on transactions, restricting when funds can be spent.
Off-Chain Computation: BitVM2, an enhancement of the original BitVM, moves complex computations off-chain, significantly reducing the burden on the Bitcoin network. Only the verification of these computations is performed on-chain, ensuring efficiency and scalability without compromising security.
Cryptographic Proofs: To verify off-chain computations, BitVM relies on cryptographic proofs, specifically Zero-Knowledge Proofs (ZKPs). ZKPs enable someone to prove they know a secret or that a computation was performed correctly without revealing the secret itself.
By combining these techniques, BitVM brings a limited form of smart contracts to Bitcoin without requiring any changes to its core code. This innovative approach allows for greater functionality and more sophisticated applications, such as trust-minimized bridges, non-custodial payment networks like zkCoins, and Bitcoin staking protocols, while respecting the simplicity and security that define Bitcoin.
