Blockchain developer ZeroSync’s co-founder Robin Linus unveiled a white paper for BitVMwith the aim of improving Bitcoin’s smart contract capabilities without requiring a soft fork upgrade to the network’s consensus rules.
“Any computable function can be verified on Bitcoin,” Linus said Posted on X (formerly Twitter). “This enables more expressive smart contracts on Bitcoin. Most of all, it enables functionality that we thought we needed a soft fork for” – potentially bringing more DeFi use cases and scalability to the network.
BitVM means Bitcoin can now be as Turing-complete as any other chain. according to to reviewer Sam Parker. Turing completeness refers to a system that can perform any computation given enough time and resources.
However, “Bitcoin is actually no longer Turing Complete by technical definition as it was before, it has simply been given a runtime for its programs that we can reasonably say is ‘Turing complete enough’ for any program we would realistically want have to carry out,” Parker added.
“This is probably the most exciting discovery in the history of the Bitcoin script,” said pseudonymous reviewer Super Testnet said. “It seems to knock down just about any door, giving us access to covenants, sidechains, and powers similar to Liquid or the Ethereum Virtual Machine, all at once without the need for forks. I can’t wait to publish my demo.”
Possible applications include games and the verification of validity in Bitcoin contracts, the whitepaper said. It may also be possible to connect bitcoin to other chains, build a prediction market or emulate new smart contract operations, it noted.
How BitVM works
Bitcoin’s built-in smart contract capabilities are limited by design to basic operations. BitVM enables enhanced smart contract functionality by performing off-chain computations.
Instead of performing calculations directly on Bitcoin, BitVM verifies them in a manner similar to optimistic rollups, using fraud proofs, a challenge-response protocol, and Bitcoin’s Taproot upgrade.
A proverb claims that a specific function, when given certain inputs, produces a certain output. If this statement is false, a verifier can perform a fraud proof and punish the prover. This mechanism allows any computable function on Bitcoin to be verified.
While deploying extensive programs into a Bitcoin Taproot address requires significant off-chain computation and communication, the on-chain footprint remains minimal. As long as the parties work together, complex calculations can be carried out outside the chain, whereby in the event of a dispute only execution in the chain is required, according to the white paper.
BitVM limitations and criticisms
Although he is optimistic about its potential, says pseudonymous Bitcoin educator Shinobi warned the cost of off-chain data management is “huge,” adding that the other major limitation of BitVM is that it only works with two parties (the prover and the verifier).
Bob Bodily, CEO of Ordinals marketplace and launchpad Bioniq, said BitVM is not as good as the Ethereum Virtual Machine because it is slower, more complex and more expensive. “The main benefit of BitVM is that we now get additional programmability on Bitcoin without an upgrade,” he added.
Blockstream CEO Adam Back said people became “overexcited” about BitVM, adding that it could hit “pragmatic scalability limits.” Although Linus said that was a misunderstanding.
Dan Robinson, a researcher at crypto investment firm Paradigm, was more critical. “This is not Turing completeness. This is functional completeness,” he said, adding “that in practice it just won’t work for anything you might want to use it for.” Functional completeness means a set of operations that can perform any logical task.
Ethereum-like smart contract capabilities
BitVM isn’t the only protocol looking to bring Ethereum-like smart contract capabilities to Bitcoin, with the Botanix EVM Layer 2 also addressing this goal via a sidechain solution called Spiderchain.
Last week, ZeroSync deployed the first Stark-based ZK client for Bitcoin, allowing Bitcoin users to validate the network’s status without downloading the entire blockchain. “The evidence of the chain state doesn’t necessarily have to do with that,” Linus told The Block. “But the BitVM can verify a STARK on Bitcoin, so you can have Bitcoin contracts that use the chain state proof.”