BitVM, or Bitcoin Virtual Machine, is a system proposed in a whitepaper by Robin Linus. This article will examine in more depth what the Bitcoin Virtual Machine is and how it works. Let's take a look!
What is Bitcoin Virtual Machine (BitVM)
In a whitepaper created by Robin Linus, the Bitcoin Virtual Machine (BitVM) is a system that allows complex computations and smart contracts to be run on the Bitcoin network. The main innovation of BitVM is that it can run on-chain computations, these computations are verified on-chain using a new prover-verifier model.
The whitepaper states that BitVM introduces a new paradigm for Bitcoin contracts and off-chain computing, providing Turing integrity while avoiding changes to Bitcoin's consensus rules. This is achieved by allowing arbitrary computations to be verified on the blockchain without needing to be executed there.
How Does BitVM Work?
BitVM uses a prover-verifier architecture with fraud proofs and challenge-response protocols to verify computations. The prover and verifier first collaborate outside the blockchain to compile the program into a binary sequence format.
Each logic gate in the circuit is represented by a leaf script in the Taproot address controlled by the prover. Prover commits the full chain within this Taproot address, using it as a compact commit for the entire program.
The prover and verifier also jointly sign a number of transactions to enable the challenge-response protocol. After preparation, both parties make an on-chain deposit to the Taproot address to activate the contract.
The prover can now run the program outside the blockchain and notify the verifier of the results. If the verifier believes that the results are invalid, they can trigger a challenge transaction.
This forces the prover to reveal the inputs and outputs of the disputed logic gate to prove that it executed correctly. After several rounds of challenge-response, false claims can be proven on the blockchain.
This approach minimizes on-chain computing and data by keeping most of the work outside of the blockchain. Blockchain is only involved in cases of dispute between the parties.
BitVM Advantages
In the whitepaper, it is stated that BitVM has a number of benefits or advantages, including:
- Enables Turing-complete smart contracts on Bitcoin without changing consensus rules.
- Minimizes blockchain congestion by keeping computing and data off-chain.
- Enables the completion of complex arbitrary computations in Bitcoin between two parties.
- Simple commitment to the entire program is possible with a Taproot address.
- Two parties can coordinate outside the blockchain, executed by on-chain verification when necessary.
- Lower fees compared to running contracts on-chain.
- Fraud proofs guarantee security - false claims can be proven on-chain.
Difference between BitVM and EVM
Compared to Ethereum's architecture, namely the Ethereum Virtual Machine (EVM) , BitVM stands out with its approach to off-chain verification, minimizing blockchain costs and burden.
However, it currently only supports two-party contracts and faces challenges regarding multiparty contract execution.
BitVM Weaknesses
Although BitVM introduces a new architecture, there are several recognized limitations, such as the complexity of multiparty contracts, the lack of native support for blockchain oracles and external data, and the computational demands of processing complex chains.
Additionally, limitations in the Taproot address space limit the maximum chain complexity.
Conclusion
BitVM marks a revolutionary step in the realm of Bitcoin contracts, moving away from the conventional while introducing innovative solutions to increase efficiency and functionality.
Its focus on the two-party concept provides a springboard for further exploration and evolution in the ever-evolving landscape of blockchain technology.
By embracing BitVM, users open up new design space for more sophisticated Bitcoin contracts and off-chain computing models, pushing the possibilities of the Bitcoin network into unexplored territory.
Also read:
What is a Smart Contract Audit and How is the Process?
What is the Blockchain Consensus Algorithm?
What is a Block and How it Works in Blockchain
What is Block Height: How It Works and Its Impact On Blockchain
DISCLAIMER : This article is informational in nature and is not an offer or invitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.
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