New Research Proposes Off-Chain Computations on Bitcoin
A Novel Approach to Executing Complex Computations on Bitcoin
A research paper titled “BitVM: Compute Anything on” introduces an innovative method for executing complex computations and smart contracts on the Bitcoin network. This paper, published on Oct. 9, suggests a way for users to verify Bitcoin computations without executing them on-chain. Instead, a prover-verifier model is used, where the prover claims the result of a calculation and the verifier can check if the claim is valid.
The Prover-Verifier Model and Binary Circuits
In this model, the prover compiles the program into a large binary circuit of logic gates. The prover then commits to this circuit bit-by-bit using cryptographic commitments in a Taproot address. The verifier can query the prover to reveal certain parts of the circuit and check for consistency. By using “challenge-response” transactions signed by both parties, the verifier can detect any false claims by the prover through a series of binary searches. This allows for the verification of arbitrary computations succinctly on-chain.
The Benefits of BitVM
The key benefit of this model, called “BitVM,” is that it requires no changes to Bitcoin’s consensus rules. The heavy lifting is done off-chain, while the on-chain footprint remains small. The paper demonstrates BitVM’s capabilities through simple logic gates but notes that it can be extended to any computable function.
Potential Applications and Limitations
BitVM has the potential to be used for various applications, including verifying computational proofs for Bitcoin contracts, bridging assets across chains, hosting prediction markets directly on Bitcoin, and more. However, it is important to note that BitVM is limited to a two-party setting between a prover and a verifier.
A Comparison to Zero-Knowledge Contingent Payment (ZKCP)
While BitVM shares similarities with Zero-Knowledge Contingent Payment (ZKCP), there are significant differences between the two. ZKCP relies on zero-knowledge proofs (ZPKs), while BitVM uses fraud proofs based on hash locks and timelocks. Additionally, ZKCP requires more cryptographic overhead, while BitVM relies more on hashes and digital signatures, making it more lightweight.
This article offers a detailed overview of the research paper proposing off-chain computations on the Bitcoin network. It introduces the prover-verifier model, explains the use of binary circuits, highlights the benefits of BitVM, and discusses potential applications and limitations. By providing a deeper understanding of this new approach, it enhances the reader’s knowledge of Bitcoin’s smart contract capabilities.