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We take advantage of the release of this paper very recently (same week of publication) to do an in-depth analysis of BitVM.

What is BitVM?

Robin Linus, through his recent white paper titled “BitVM: Compute Anything on Bitcoin,” introduced an innovative framework that allows Bitcoin to access Turing-complete contracts while preserving Bitcoin's fundamental consensus rules.

BitVM would allow virtually any arbitrary computation to be introduced into the Bitcoin ecosystem that would be performed off-chain. BitVM presents itself as a computational paradigm that allows Turing-complete contracts to be expressed on Bitcoin without the need to modify the consensus rules of the network. BitVM would be a sort of extension that would allow Bitcoin to carry out more sophisticated calculations without modifying it at the protocol level.

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How BitVM works

This feat would be accomplished by executing Bitcoin's contract logic outside of the main blockchain, while maintaining final verification on the Bitcoin network. The mechanism is similar to that of Ethereum's optimistic rollups.

Going deeper, Linus explains that the system is based on evidence of fraud and on a challenge-response model between two parties: a “prover” and a “verifier”. The prover makes statements, while the verifier checks whether they are true, punishing the prover if it makes false statements.

The key idea is that the complex calculation is first performed and verified off-chain, but in case of disagreement or behavior deemed unfair, it can be challenged on-chain by activating formal verification on the Bitcoin blockchain. The final on-chain verification mechanism is similar to that of rollup optimistic of Ethereum.

Bitcoin Taptree
Taptree on the Bitcoin blockchain. Source: BitVM whitepaper

The possibilities opened by BitVM

Currently, Bitcoin is mainly limited to elementary operations at the scripting level. With BitVM, the computing possibilities seem to expand significantly. One can imagine running games like chess or poker via Bitcoin contracts or creating bridges between BTC and other blockchains.

Linus himself foresees a future where decentralized predictive markets and new opcodes could emerge thanks to BitVM, expanding the uses of Bitcoin.

However, it's not all rosy. Linus admits to some technical limitations, most notably the fact that BitVM currently operates primarily in a bipartite context, requiring a large amount of computation and communication outside of the blockchain.

The next step, according to Linus, would be the complete implementation of BitVM together with Tree++, an advanced programming language designed for Bitcoin that would allow the full potential of BitVM to be exploited.

Criticisms and limitations

Reactions in the Bitcoin community have been mixed. While prominent figures such as Eric Wall and Dylan LeClair have welcomed the initiative, others, such as Bitcoin Core contributor Adam Back, have urged caution as it is still a preliminary proposal.

What are the concerns about BitVM? Although the proposal seems promising because it would allow more complex programs to be created on the Bitcoin network without changing its protocol, there are still technical challenges to address.

For example, managing the enormous amounts of data generated by BitVM off-chain would be very expensive and complex. Furthermore, the system currently only works between two parties, which limits its practical usefulness. Further research will be needed to extend this to more participants.

My "two cents

As always, I urge prudence and caution. I appreciate Bitcoin as it is: a resilient, decentralized digital asset. On the other hand, I welcome any technological advancement that could allow Bitcoin to expand its use cases without compromising its security and decentralization.

It will therefore be FUNDAMENTAL to carefully follow the applications that could be developed with BitVM, to ensure that they do not negatively impact the Bitcoin network.

We will continue to monitor BitVM developments and update you.

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