BitVM White Paper Proposes Ethereum-Like Contracts on Bitcoin

In a significant development for the Bitcoin ecosystem, a Bitcoin developer has unveiled a proposal to introduce more versatile off-chain smart contracts to Bitcoin without the need for a soft fork. The proposal, outlined in a white paper titled "BitVM: Compute Anything on Bitcoin," was published on October 9th by Robin Linus, the project lead at ZeroSync. BitVM aims to enable Turing-complete Bitcoin contracts without making alterations to Bitcoin's consensus rules. Turing completeness denotes a system's ability to theoretically solve any computational problem. Under the BitVM framework, the execution of the "logic" of Bitcoin contracts would occur off-chain, while verification would take place on the Bitcoin blockchain, akin to Ethereum's optimistic rollups. BitVM's architecture relies on fraud proofs and a challenge-response model. In this setup, a "prover" makes claims, and a "verifier" can utilize a fraud-proof mechanism to penalize the prover when false claims are presented. Presently, Bitcoin is primarily capable of basic operations like signatures, timelocks, and hashlocks. However, BitVM introduces the potential for a broader range of applications, including games such as Chess, Go, or Poker, as well as the verification of validity proofs in Bitcoin contracts. It could also facilitate BTC interoperability with other blockchains, prediction markets, or novel opcode emulation. One limitation of BitVM is that it operates in a two-party setting, involving a prover and a verifier. Additionally, a significant amount of off-chain computation and communication is necessary to execute programs using this model. The next milestone for BitVM is the full implementation of the framework, along with the development of Tree++, a high-level programming language designed for writing and debugging Bitcoin contracts. It's important to note that BitVM relies on the Taproot soft fork, which was activated in November 2021. Notable figures in the Bitcoin community have expressed varying degrees of enthusiasm for BitVM. Eric Wall, a prominent Bitcoiner, acknowledged the concepts outlined in the white paper and expressed cautious excitement about real-world experiments stemming from this development. Bitcoin analyst Dylan LeClair also commended the BitVM white paper. However, Adam Back, a Bitcoin Core contributor, urged caution and suggested not getting overly excited about the development just yet. One GitHub user, "dotta," noted that a proof-of-concept for BitVM is already available on the platform. Another user, Sam Parker, reassured Bitcoin maximalists by highlighting that BitVM is an opt-in feature and won't force Bitcoin to be "locked" into Turing-complete contracts, emphasizing the security sandboxing aspect of Bitcoin's UTXO system. In summary, BitVM's proposal presents an intriguing avenue for expanding Bitcoin's capabilities with off-chain smart contracts, resembling Ethereum's functionality. While the Bitcoin community is cautiously optimistic about this development, it represents another step forward in enhancing the utility and versatility of the Bitcoin network.