BitVM in a Nutshell
  • BitVM in a Nutshell
  • Introduction to BitVM
    • What Is BitVM?
    • How Bitcoin's Programming Works
    • How BitVM Enhances Bitcoin's Functionality
    • Bringing Computation to Bitcoin Through Off-Chain Execution
    • Conclusion
  • BitVM Applications & Use Cases
    • Introduction
    • Building Trust-Minimized Bridges
    • Beyond the Lightning Network
    • Sharing Bitcoin Security with Other Systems
    • Conclusion
  • BitVM Programming Paradigms
    • Introduction
    • How to Construct a BitVM in Practice
    • The Challenges of Compiling for Bitcoin
    • The Solution: Staging Compilation and Decomposition
    • Remarks and Future Directions
  • Existing Efforts related to BitVM
    • The Birth of BitVM
    • Making BitVM Practical: The Push for Efficiency and Automation
    • Real-World Applications: The BitVM Bridge
    • Conclusion
  • Future Work: Scaling BitVM in Production
    • Introduction
    • Developing Bitcoin-Friendly Cryptographic Primitives
    • Automating the Compilation Pipeline
    • Enhancing Security Through Formal Methods
    • Conclusion
  • BitVM vs. OP_CAT
    • What Is OP_CAT and Why Does It Matter?
    • How OP_CAT Could Boost BitVM
    • Why Isn’t OP_CAT Enabled Yet?
    • Conclusion
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  1. BitVM Applications & Use Cases

Building Trust-Minimized Bridges

Historically, developers have tried to expand Bitcoin’s functionality with Layer 2 solutions. Stacks, for example, created a Bitcoin-tied token called sBTC, pegged 1:1 with Bitcoin. However, Stacks relies on a multi-signature committee to maintain the peg, meaning that trusted individuals hold the authority to manage sBTC’s value. This setup introduces a layer of trust that users must accept.

With BitVM, trust-minimized bridges are possible, reducing or even eliminating the need for trusted intermediaries. Instead of depending on a committee, a BitVM-based bridge could use an optimistic verification model where any Bitcoin user can act as a challenger to dispute fraudulent transactions.

Here’s how a BitVM-based trust-minimized bridge works:

  • Peg-In: When Alice wants to use her BTC in a sidesystem, she deposits it into a BitVM instance on Bitcoin. This deposit is recorded on the Bitcoin side, and an equivalent amount is issued in the sidesystem, allowing Alice to use her BTC there.

  • Peg-Out: When Alice wants to withdraw her BTC back to Bitcoin, she initiates a withdrawal request. If she tries to withdraw without following the correct steps, anyone can challenge her attempt and prevent fraud.

With this approach, bridges can transfer BTC without relying on centralized, trusted authorities.

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Last updated 6 months ago