Bitcoin

The Resistance to Change in Bitcoin: Unlocking Bitcoin's Programmability

Discover the untapped potential of Bitcoin as a programmable platform and the crucial role Bitfinity plays in bridging Bitcoin with smart contracts, DeFi, and the Ethereum Virtual Machine.

While Bitcoin is a simple and powerful technology, reminiscent of TCP/IP in its ability to transfer value from one place to another, it lacks the programmability of smart contracts. In the search for bringing this programmability to Bitcoin, we already know where we stand...

But this article is a way to recap the most essential points of Bitfinity and remember that, in many ways, Bitcoin's resistance to change is a feature, not a bug - one that must be embraced.

How Is the Perception of Bitcoin's Programmability Changing?

In recent years, the perception of Bitcoin's programmability has begun to shift. More people are realizing that the true innovation lies with Bitcoin, as it continues to gain market traction and institutional adoption. The idea that Bitcoin can be made as programmable as other blockchains is finally gaining wider acceptance.

While other blockchains are valuable experiments, and some may survive in one form or another, Bitcoin's dominance is becoming increasingly clear. Metrics like Bitcoin dominance, which measures Bitcoin's market share relative to other cryptocurrencies, have shown Bitcoin's resilience and growth.

Bitcoins Durability

One of the value propositions of Bitcoin on top of programmability is its durability. For example, you can take a Bitcoin software from 2013, run it today, and it will catch up to the current block. That's amazing to have.

Imagine doing that on Ethereum. Ethereum has gone through proof of work to proof of stake and completely different clients since launch. It doesn't have that sort of durability and stability that a lot of people would want to have from a store of value, from base money.

Bitcoins Security

We all know Bitcoin for its security, 100% uptime, and simplicity, which is also a way to reduce the security attack vector of Bitcoin. There's a reason why Satoshi had certain opcodes but disabled them. The more complexity you add to the base layer, the larger the attack vector becomes.

Bitcoins Network Effect

Bitcoin stands firm and remains number 1 because the belief is that the network effects on Bitcoin are considered to be more than extremely strong.

Technology is seen as easy to replicate. If someone comes up with a faster consensus algorithm, it is thought to be much easier to implement that on top of Bitcoin than breaking the network effects of Bitcoin and moving all the liquidity, brand value, and everything else onto a new network. That's considered to be a much harder thing to do.

People are realizing that if you want to build the next generation of decentralized applications and bring in the next billion users into crypto, Bitcoin is probably the best foundation to build on. This is because it has the brand, liquidity, and network effects. And now, with many L2s coming online, it's starting to have scalability and programmability as well.

Bitfinity as 'Facilitatooor' in the Bitcoins Early DeFi Days…

Bitfinity builds a layer on top of Bitcoin, allowing users to move BTC from the base Bitcoin layer (L1) to the Bitfinity layer (L2). On the Bitfinity layer, Bitcoin can be used natively, faster, and in a more programmable way.

Technically, it is difficult to change Bitcoin, and why should we? Building a programmable layer on top of it required solving numerous engineering problems. This is where the chain fusion technology introduced by the Internet Computer stepped in...

As more people are starting to recognize the potential for Bitcoin to become as programmable as Ethereum and other networks, they'll find their way to Bitfinity, where you will be able to deploy smart contracts for Bitcoin, Ordinals, and BRC-20 - all written in Solidity.

Trust Assumptions for Bitcoin L2s

On the Bitcoin side, you typically put more trust in some sort of bridge that goes from L1 to L2. This is not always the best option.

On one side, you can have federations like Liquid, where there's clearly a multi-sig, and you're fully trusting these people. There are no economic incentives. Nobody's putting up any collateral or capital. You're completely trusting whoever controls the multi-sig for moving the Bitcoin there.

There are things like Rootstock that try to have more clever designs, where they have these hardware multi-sigs and other protocols around it. But at the end of the day, it still looks closer to a multi-sig than anything else.

On Stacks, after the upcoming Nakamoto upgrade, they are basically looking at a threshold wallet system. These signers can come and go, which is an interesting property. You don't have a fixed set of signers. At any given moment, you only need a threshold of them to sign off. But even then, the users have to keep track of who these signers are, what their incentives are, and whether they are reliable.

Bitfinity, instead, uses a threshold cryptographic scheme called Chain-Key to create a secure, decentralized bridge between Bitfinity and the Bitcoin blockchain. Chain-key is unique in that no single node ever has access to the threshold key. The threshold key shares are regenerated on a periodic basis every 11 minutes through "moon-math."

Bitfinity is compliant and is doing the right thing by working closely with regulators and obtaining legal clarity early on. It has positioned itself as a compliant and trustworthy platform for building on top of Bitcoin.

But this is not the only thing that we want to roll out. As crypto and the focus changes with each day, we have more on our roadmap to follow suit.

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The Resistance to Change in Bitcoin: Unlocking Bitcoin's Programmability