Bitcoin sidechain developers release whitepaper for BitVM2

Blockchain developers have published a whitepaper for BitVM2, presenting new updates to Bitcoin sidechain technology and introducing a new bridge design.

Developers of Bitcoin (BTC) scaling solution BitVM have announced its second version, which introduces challenging permissionless features and reduces the complexity and number of on-chain transactions required to resolve disputes.

Aleksey Zamyatin, co-founder of Build on Bitcoin, a hybrid layer-2 that works with Bitcoin and Ethereum, said in an announcement at X on August 15 that the updated version aims to improve BitVM’s security by allowing anyone to query transactions within the system and reduce the on-chain footprint for dispute resolution to just three transactions.

BitVM2’s whitepaper states that its construction mechanism “requires no consensus changes” on the Bitcoin network and enables the design of “an entirely new class of applications” on the blockchain.

“To guarantee liveness, we only need one active rational operator (while others can be malicious). Any user can act as a challenger and facilitate permissionless verification of the protocol.”

BitVM2 technical documentation

Touted as the “most secure BTC bridge to date,” BitVM’s Bridge design uses a 1-of-n security model that allows anyone to query and block unauthorized transactions, as opposed to the traditional t-of-n multi-signature approach that relies on the assumption of an honest majority.

Solving scalability challenges

The whitepaper, written by Robin Linus, Zamyatin, Lukas Aumayr, Andrea Pelosi, Zeta Avirikioti, and Matteo Maffei, states that almost all existing Bitcoin bridges are based on multiple or threshold signature schemes, where a group of t/n signatories is tasked with protecting Bitcoin.

While some bridges provide economic security through collateralization, the authors say these designs “face scalability challenges due to high capital requirements and therefore have limited adoption in practice.”

First announced in October 2023, BitVM aims to redefine Bitcoin by enabling smart contract-like functions without turning it into Ethereum. The project has spurred initiatives like Bitlayer, which aims to advance layer-2 solutions on the Bitcoin network.