The future of ‘smart’ Bitcoin?

The rise of ordinals on Bitcoin (BTC) has opened many doors for developers and users. By permanently entering data onto the Bitcoin blockchain, digital objects such as art can have verifiable ownership. However, it is not only digital art objects that can benefit from this development. Domain addresses are also possible using this technology.

Redeems public wallet keys

Sending and receiving transactions over the blockchain has many advantages. Some of these include the verifiability of transactions and the immutability of the blockchain. Thanks to the blockchain, digital value can be traded in perpetuity, like a person handing over a physical dollar bill to someone else.

However, it is not so easy for everyone to use the technology. Users need a certain amount of knowledge about how the blockchain and their wallets work, and they also need to know how to securely send crypto to a wallet.

One of the difficulties users may experience is that public keys can be quite intimidating. They are long strings of seemingly random numbers and letters. One mistake and the crypto is either lost or ends up in the wrong wallet. And with the immutability of the blockchain, there is no way to get it back.

Where there is a need, developers get to work. One of the popular projects that aims to make crypto transactions more user-friendly is the Ethereum Name Service (ENS). This platform turns these complicated wallet addresses on Ethereum into easily readable domain names, just like any website.

However, for a long time it was impossible to integrate a comparable solution for the Bitcoin network.

A step towards “smart” Bitcoin

All this changes with BTCDomain. The platform uses ordinals and zk-STARKs, short for “zero-knowledge Succinct non-interactive argument of knowledge,” to generate unique domain addresses that can be used on the Bitcoin network. But how does it work under the hood?

Essentially, words are unique inscriptions in transactions on the Bitcoin network. In this way, ordinals can be verified using a blockchain explorer. BTCDomain uses this approach to associate Bitcoin domain addresses. The platform contains all necessary metadata in a Bitcoin transaction. When a user sends BTC to one of the registered domains, such as “satoshi.btc”, the platform resolves the underlying public key so that the BTC ends up at the correct address.

To ensure this happens correctly, users should be able to trust that the system resolves the transaction correctly. This is where the zk-STARK technology comes in.

One of the options is for users to run a full Bitcoin node in combination with an ordinary database on their own machine. Although this is possible, it requires some technical skills and time. BTCDomain solves this problem by solving a transaction using the resources of the platform. It inspects every Bitcoin transaction and generates a zero-knowledge proof. Users can then verify that the domain address has the underlying public key they are sending BTC to.

Also, with the latest Miami update, BTCDomain now allows users to enter their own website on the Bitcoin network. Thanks to the update, the platform can automatically resolve domain names to the dedicated web2 website. For example, if a user owns ordinal.btc and builds an html file and submits it to the Bitcoin network, BTCdomain can automatically display this web page on ordinal.btc.page.

Criticism of ordinals

However, the use of ordinals on Bitcoin has attracted criticism. Due to its growing popularity, the network’s activity increased significantly. In turn, this led to higher transaction fees, leading critics to oppose the use of the Bitcoin network for anything other than financial transactions. Founder of BTCDomain Jay Lee is convinced that it is everyone’s choice what they do with Bitcoin: “Anyone can always use Bitcoin as a financial transaction chain. We (who believe in “smart” Bitcoin) do not affect any original use of Bitcoin. Some might argue that ordinary numbers have pushed transaction fees higher. But we are in a free market. Whoever pays the highest gas tax rate is included in a block. It is fair.”

According to Lee, BTCDomain brings “smart Bitcoin” closer by showing developers that it is possible to build trustless applications that rely only on Bitcoin. This could lead to a thriving decentralized financial sector built on the Bitcoin blockchain in the future.