BitVM: Revolutionizing Bitcoin Contracts


BitVM is a groundbreaking computing paradigm that enables Turing-complete Bitcoin contracts without altering the network’s consensus rules. It operates on a verification principle similar to optimistic rollups, where computations are verified rather than executed on Bitcoin. The system requires minimal on-chain footprint, allowing complex computations without leaving traces in the chain. On-chain execution is only needed in disputes. This article explores the capabilities of BitVM and its architecture.

Expanding Bitcoin’s Capabilities

BitVM expands Bitcoin’s smart contract capabilities beyond basic operations like signatures, timelocks, and hashlocks. This opens up a whole new design space for more expressive Bitcoin contracts and off-chain computation. Imagine being able to play games like Chess or Poker directly on the Bitcoin network or verifying validity proofs in Bitcoin contracts. These are just some of the potential applications of BitVM.

The Architecture of BitVM

The architecture of BitVM is a fascinating blend of existing technologies and novel approaches. It bears similarities to Optimistic Rollups and the MATT proposal, both of which are well-known concepts in the blockchain space. However, what sets BitVM apart from these systems is its compatibility with the existing Bitcoin network. BitVM requires no changes to Bitcoin’s consensus rules, which means it can operate within the existing infrastructure of Bitcoin. This is a significant advantage as it allows for the implementation of BitVM without disrupting or dividing the Bitcoin network. In essence, BitVM’s architecture can be seen as a bridge between the robustness and security of Bitcoin’s existing infrastructure and the need for more complex and expressive contracts. It leverages the strengths of existing technologies while introducing new capabilities, creating a balance between innovation and compatibility.

Committing to Circuits

In computer science, any computable function can be represented as a Boolean circuit. BitVM applies this principle by expressing any circuit by composing gate commitments. It’s like creating an intricate blueprint for a machine where every step of execution is committed to in a Tapleaf. All these Tapleaves are combined into the same Taproot address, allowing the prover to execute any gate in the circuit.

Credit: Tesfu Assefa

Ensuring Fair Play

Of course, there need to be rules to ensure fair play. In case of fraud, the verifier can challenge the prover’s statement using a sequence of pre-signed transactions. If one party stops engaging, after some timeout, the other party wins the challenge and can take both deposits. This mechanism ensures that both parties have skin in the game and are incentivized to play fair.

Inputs and Outputs

In the BitVM system, the prover can set inputs by revealing corresponding bit commitments. A bit commitment is a cryptographic protocol that allows the prover to commit to a chosen value while keeping it hidden from others. In an ideal scenario, these commitments are revealed off-chain. This is done to minimize the on-chain footprint, which is the record of transactions on the blockchain. Minimizing the on-chain footprint is beneficial as it reduces the load on the blockchain network and enhances its scalability. However, in non-cooperative cases, the verifier can force the prover to reveal their inputs on-chain. This ensures transparency and allows for verification of transactions.


While BitVM is efficient for expressing functions in simple NAND circuits, it is currently limited to two parties. However, it might be possible to have two-way channels and form a network similar to Lightning Network. Future research could explore combining BitVM with different off-chain protocols like Lightning Network or rollups.


BitVM has the potential to revolutionize Bitcoin contracts by enabling Turing-complete capabilities without altering the network’s consensus rules. By allowing verification of program execution through fraud proofs in large Taptrees, It expands Bitcoin’s smart contract capabilities and operates within the existing infrastructure of Bitcoin. With its unique architecture and commitment to fair play, BitVM opens up new possibilities for expressive contracts while maintaining compatibility with the robustness and security of Bitcoin. As the technology evolves, it will be exciting to see how BitVM integrates with other off-chain protocols and further enhances the Bitcoin ecosystem.

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