The 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 leading cryptocurrency.
Internet Computer will use its so-called on-chain key cryptography to integrate with Bitcoin, clearing the way for smart contracts with native BTC addresses that are hosted directly on the Internet Computer, the Dfinity Foundation announced on Tuesday.
“Internet Computer smart contracts will gain access to bitcoin liquidity, and Bitcoin will gain powerful new smart contract functionalities, without the need for insecure and cumbersome trust bridging services,” explained Dominic Williams, founder and chief scientist of the Dfinity Foundation.
Smart contracts on the Internet Computer will have associated BTC addresses, giving them direct access to transactions on the Bitcoin blockchain. Completion of transactions on the Internet Computer takes 2 seconds, compared to 40 minutes for Bitcoin. To avoid this, so-called “Bitcoin banks” can be used directly on the Internet Computer, allowing fast 2-second transactions.
At the beginning of this year, The Dfinity Foundation launched a $ 223 million Developer Ecosystem Program to support further smart contract and blockchain development. The project, which was launched in 2014, received financial backing from some of the largest cryptocurrency companies, such as Andreessen Horowitz and Polychain Capital.
Dfinity’s latest efforts are part of a broader industry initiative to make Bitcoin more accessible for transactions, decentralize finance, and Web 3.0. In January, the open source network Stacks unveiled its vision for Bitcoin-centric smart contracts using a single-layer blockchain with a native bridge.
Other developers are delivering new apps ahead of the long-awaited Bitcoin Taproot update later this year. The update received overwhelming support from mining nodes, paving the way for the soft fork activation in November.
Although Bitcoin did not achieve all the purposes of Satoshi Nakamoto’s 2008 white paper (i.e. its widespread usefulness as a cash system), it became a top-order alternative asset. The Bitcoin network reached a total market capitalization of over $ 1 trillion in May, before undergoing a broad market correction. Much of that growth is due to the crecent institutional support for Bitcoin as an asset.