How BitVM Enhances Bitcoin's Functionality

BitVM doesn't alter Bitcoin's existing code; instead, it innovatively leverages what's already there. It's like using a limited set of tools in creative ways to build something new and impressive—much like constructing intricate structures from basic Lego blocks.

By utilizing Bitcoin's existing features—such as hashlocks and timelocks—BitVM introduces a form of programmability without adding complexity to the Bitcoin protocol itself.

A hashlock is like a digital lock that can only be opened with a specific key (a cryptographic preimage). In the context of BitVM:

• Conditional Transactions: Funds can be locked in a UTXO that only becomes spendable when the correct cryptographic key is provided, acting like a digital lock that requires the right key to unlock and transfer the funds

• Use Cases: This enables basic smart contracts where, for example, a payment is only released upon the revelation of a specific secret.

A timelock sets a condition based on time:

• Delay Transactions: Funds cannot be spent until after a certain time or block height.

• Security Measures: Timelocks can protect against certain types of attacks by delaying the ability to move funds.

By combining hashlocks and timelocks, BitVM can create programmable contracts that perform actions based on specific conditions, such as:

• Atomic Swaps: Enabling the exchange of assets between parties without intermediaries.

• Conditional Payments: Releasing funds only when certain conditions are met, within a specified time frame.