Efforts to expand Bitcoin’s functionality for payments, smart contracts and Web 3.0 are well underway, opening the door to wider mainstream adoption.
Dfinity Foundation’s Internet Computer blockchain is bringing smart-contract capabilities to the Bitcoin (BTC) network, potentially opening the door to new use cases for the premier cryptocurrency.
Internet Computer will utilize its so-called chain key cryptography to integrate with Bitcoin, paving the way for smart contracts with native BTC addresses that are hosted directly on Internet Computer, Dfinity Foundation announced Tuesday.
“Internet Computer smart contracts will gain access to bitcoin liquidity, and Bitcoin will gain powerful new smart contract functionality, without the need for insecure and cumbersome trusted bridging services,” explained Dominic Williams, the founder and chief scientist of Dfinity Foundation.
Smart contracts on Internet Computer will feature associated BTC addresses, giving them direct access to transactions on the Bitcoin blockchain. Transaction finality on Internet Computer takes two seconds, compared with 40 minutes on Bitcoin. To get around this, so-called “Bitcoin banks” can be utilized directly on Internet Computer, enabling swift two-second transactions.
Earlier this year, Dfinity Foundation launched a $223 million Developer Ecosystem Program to support further smart contract and blockchain development. The project, which launched in 2014, has received financial backing from some of crypto’s biggest venture firms, including Andreessen Horowitz and Polychain Capital.
Dfinity’s latest efforts are part of a wider industry initiative to make Bitcoin more accessible for transactions, decentralize finance and Web 3.0. In January, open-source network Stacks unveiled its vision for Bitcoin-centric smart contracts utilizing a layer-one blockchain with a native bridge.
Several other developers are in the process of delivering new applications ahead of Bitcoin’s widely anticipated Taproot upgrade later this year. The upgrade received overwhelming support from mining nodes, paving the way for soft-fork activation in November.
While Bitcoin hasn’t achieved all the tenets of Satoshi Nakamoto’s 2008 whitepaper — namely, widespread utility as an electric cash system — it has emerged as a premier alternative asset. The Bitcoin network reached a total market capitalization north of $1 trillion in May before undergoing a broad market correction. Much of that growth is owed to growing institutional support for Bitcoin-as-an-asset.