One of the most interesting current developments within the Bitcoin ecosystem is BitVM or Bitcoin Virtual Machine.
This is a new technology that allows running Turing complete smart contracts on Bitcoin without requiring any changes to the core Bitcoin protocol. Thanks to this, BitVM has the potential to unlock a whole new range of applications for Bitcoin, including decentralized finance (DeFi), non-fungible tokens (NFT) and gaming.
The protocol has been developed by Robin Linus, a Bitcoin developer, well known in the community for presenting the ZeroSync proposal. Linus presented the BitVM white paper in his X account, thereby opening the possibility of Bitcoin with smart contract capabilities.
BitVM works using a challenge-response model, where a “prover” can confirm claims and a “verifier” can counter false claims with evidence of fraud. This allows BitVM to verify calculations off-chain, without sacrificing the security of the Bitcoin blockchain.
In fact, it is in the Bitcoin blockchain where the tests that both entities must complete are stored, allowing the creation of public, secure and verifiable smart contracts. This is possible because all the smart contract information is stored in transactions recorded in said blockchain. To operate with these smart contracts you only have to make a Bitcoin transaction in them and comply with the challenge-response model, which is then reviewed off-chain by the nodes that run the BitVM, the result of which is stored on the chain for your public review.
For now, everything in the BitVM white paper is just a proposal. However, it has the potential to revolutionize the Bitcoin ecosystem. By enabling Turing-complete smart contracts, BitVM can make Bitcoin more attractive to a wider range of users and developers. This could lead to a significant increase in Bitcoin adoption and innovation.