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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