DFINITY Brings New Smart Contract Functionality to Bitcoin with Internet Computer Integration » CryptoNinjas
The DFINITY Foundation, the nonprofit organization contributing to the development of the Internet Computer (IC) – a high-speed, Internet-scale public blockchain – today announced the Internet Computer’s mainnet integration with Bitcoin, bringing smart contract functionality to cryptocurrency.
Now the Internet computer can act as a layer-2 for Bitcoin where smart contracts on the Internet computer can contain, send and receive bitcoin naturally, without the need for bridges or other third parties. This provides a trustless foundation for diverse DeFi and web3 applications seeking to encode Bitcoin.
“Blockchains are like walled gardens, unable to interact with each other. In the case of Bitcoin, applications, such as DeFi applications, which could benefit the most from interacting with the world’s largest cryptocurrency, do not have the ability to do so. The Internet computer integration with Bitcoin is a true game changer for the industry, finally bringing smart contract functionality to Bitcoin and enabling a whole new landscape of DeFi and dapp development never before possible using BTC.
– Manu Drijvers, Director of Engineering at the DFINITY Foundation
With IC integration, bitcoin can be used for DeFi activities such as yield farming, lending, payments and more…
This is achieved through the Internet computer’s enhanced key chain cryptography. The direct integration with Bitcoin obviates the need for bridged and packaged Bitcoin, a technique used to facilitate interaction between different blockchains, but one that is error-prone and often hacked.
To enable fast bitcoin transactions between smart contracts on the Internet computer, the DFINITY Foundation is now working on Chain-Key Bitcoin (ckBTC). Here, ckBTC will act as a local ledger facilitating fast transactions with low fees and only settling transactions on the Bitcoin network when necessary.
Benefits / Developers
The Internet computer’s integration with Bitcoin also provides a more secure alternative to centralized bridges in the form of threshold ECDSA (Elliptic Curve Digital Signature Algorithm). The implementation of ECDSA allows the Internet computer’s container smart contracts to perform bitcoin transactions directly without intermediaries or bridges.
ICP’s developer community has long expressed a strong demand for this feature…
DEX projects such as Helix or IC Lighthouse already build on the Bitcoin and Chain-Key signature features to offer bridgeless token exchanges between chains. Moreover, a few ecosystem dApps are also poised to launch some creative use cases beyond DeFi.
Among them is the crowdfunding platform, CrowdfunNFT – which will accept funds for projects in BTC. The goal is to expand the crowdfunding market in general and bring in a new set of project backers for crypto. Other examples of use cases in development are transactions in BTC on NFT marketplaces and peer-to-peer transfer of BTC directly on social media and messaging dApps.
Bringing new programmability to Bitcoin will open up more unique and imaginative use cases in the future.
