Smart contracts will arrive on Bitcoin soon
Bitcoin is the first and most well-known cryptocurrency. Although the bitcoin blockchain was not originally meant to support smart contracts, it may nevertheless execute smart contracts with limited capability. Despite some developers’ misgivings, the bitcoin blockchain is a stable environment for the execution of various sorts of smart contracts. This article explains how smart contracts can be integrated into the bitcoin environment, who works on this, what are the benefits, and why BTC is not Turing complete.
First of all, smart contracts with status tracking allow investors to freeze assets until certain conditions are met or a sequence of procedures is done (if — then — else algorithm). Because of the Ethereum startup, the development has attracted considerable attention. Smart contracts based on the technology have a wide range of applications. Bitcoin also supports smart contracts. On the other hand, they are more technically sophisticated, and limited in practical applicability than Ethereum contracts. The example of a BTC smart contract may serve multi-signature in this ecosystem. However, the main distinction of Bitcoin is that smart contracts in its blockchain lack Turing completeness, i.e., it is impossible to create any computational function due to limitations.
What is Turing complete?
Turing complete and Turing-incomplete platforms are the two types of current platforms allowing smart contracts. From a programming language, Turing-completeness means that the language has the tools to tackle any computational problem, giving the system some level of autonomy. This characteristic is not present in the majority of current blockchains, including bitcoin. As a result, their contracts are rather simple constructions such as multi-signatures or delayed transactions. A Turing complete system enables developers to create and extend the capabilities of decentralized applications. Only code that runs on the blockchain network is included in such apps. There is no centralized control as a result of this feature.
Switching to Turing complete could expand Bitcoin’s usefulness. However, Bitcoin Maximalists reject this. According to them, adding redundant computations into the blockchain poses a serious risk to the network. This could cause blockchain slowdowns, and with bitcoin’s limited block size and delay between blocks, Turing complete smart contracts are costly.
In other words, RGB, a technology that would not only enable smart contracts on Bitcoin but will also overcome its most evident limitations, might revolutionize things. RGB is a client-side validated state and smart contract solution that runs on Bitcoin Layers 2 and 3. Furthermore, RGB is a layer 3 protocol that functions on both the Bitcoin and Lightning networks, ensuring the privacy and confidentiality of transactions. Furthermore, the incorporation of smart contracts into the bitcoin blockchain will give some significant benefits and upgrades. Among the most valuable benefits, we can name the elimination of double-spending, the maintenance of security, the reduction of storage space, and the resolution of scalability concerns.
However, in terms of time and usage, Bitcoin has established itself as the most dependable blockchain and also the most popular cryptocurrency. In practice, the blockchain of the future will contain not only a reliable consensus mechanism and infrastructure for Turing complete smart contracts but also a sophisticated oracle system that will allow it to stay decentralized and not rely on third-party services.
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