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It’s time to debunk a much used and repeated myth of blockchain technology, Bitcoin cannot do smart contracts. One of the main selling points of cryptos like Ethereum and EOS is their ability to execute smart contracts, with their new approaches being necessary to unlock the true power of blockchain technology.
This is not completely true. With Bitcoin’s scripting language being much less expressive than Ethereum’s for example, it is possibly to write certain types of smart contracts on Bitcoin as it currently exists. Three examples of applications of Bitcoin smart contracts include: Bitcoin’s often-hyped Lightning Network; the recently announced Arwen protocol, which dramatically increases security for traders on exchanges; and Abra, which allows users to peg the value of their bitcoin to many other real-world assets.
This topic of whether Bitcoin is useful for smart contracts came up during Casa CTO Jameson Lopp’s recent interview with Epicenter. While sharing his thoughts on the matter, Lopp discussed his view of Bitcoin as a trust anchor, how more expressive smart contracts can be implemented in Bitcoin, and Bitcoin protocol developers’ conservative approach to their work.
“I do think that there is more to [Bitcoin] than just money. I think what we’re trying to do is create this global record of truth — or at least an authoritative record that has no authority behind it,” said Lopp.
The Casa CTO added that people are able to put whatever data they wish in this authoritative record, and he provided specific examples of how this can be done.
“If you’re moving beyond the simple accounting ledger that the Bitcoin protocol supplies, you have to basically create your own protocol, your own new consensus, for whatever that extension is. Whether that is some sort of layer-two network or a sidechain that is pegged to Bitcoin or extension blocks or whatever — there’s a potentially limitless number of ways to do this,” explained Lopp.
In terms of Bitcoin’s future potential as a platform for smart contracts, Lopp pointed out that there are plenty of Bitcoin developers who are interested in this sort of functionality. However, they disagree with how Ethereum went about doing things. According to Lopp, it comes down to a debate of execution versus verification.
“A lot of the ‘more conservative” Bitcoin developers don’t like having smart contracts that have to get executed by everyone on the network. They rather want to perform the same type of logic but where the actual execution happens privately, and then you’re just providing a proof of the execution that the rest of the world can verify,” explained Lopp.
And this gets into a key difference between Bitcoin and all of the other crypto asset networks out there: alterations to the Bitcoin protocol tend to come at a slower pace.
“Advancements with the Bitcoin base protocol [are] a lot more measured and slower than a lot of other chains for a number of reasons,” said Lopp.
These are all extremely important facets of development to bring up. With Bitcoin being the standard, changes to allow more expression in the potential for them to develop smart contracts has to be measured. Scaring away investors and companies because changes were made too rapidly, and weaknesses were exposed is only going to be detrimental to acceptance of the technology. There is no better way to bring out the “I told you so” crowd than to make a change too quickly and introduce errors, things like security weaknesses, into the code.
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