How Bitcoin's Programming Works

To appreciate what BitVM brings to the table, it's helpful to understand how Bitcoin's programming currently works.

Bitcoin Script: The Basics

Bitcoin includes a built-in scripting language known as Bitcoin Script. This language allows users to create simple conditions for spending unspent transaction outputs (UTXOs)—the building blocks of Bitcoin transactions. A UTXO can be thought of as a "digital coin" that is locked by specific rules, and these rules must be satisfied to spend the coin. For instance, Bitcoin Script enables features like:

• Multisignature Transactions: Requiring multiple signatures to unlock and spend a UTXO.

• Timelocks: Restricting the spending of a UTXO until a certain time or block height.

These features function like programmable locks on a digital safe, ensuring that only the right keys or conditions can unlock the funds.

Limitations of Bitcoin Script

However, Bitcoin Script is not a full-fledged programming language. It's intentionally limited to prevent complexity that could introduce security vulnerabilities such as denial-of-service (DOS). This means:

• No Complex Logic: You can't program intricate conditions or automate complex actions.

• Limited OpCodes: The set of operations (opcodes) available is minimal, focusing on transaction validation.

These limitations contribute to Bitcoin's security but also mean that sophisticated applications—like those seen in DeFi—aren't possible natively on Bitcoin.