Enabling Bitcoin Smart Contracts on the Internet Computer

2025-06-26

AI Summary

This paper addresses the challenge of securely and efficiently leveraging Bitcoin’s value on the Internet Computer (IC), circumventing traditional cross-chain bridge mechanisms. Methodologically, it introduces a native interoperability architecture featuring direct peer-to-peer interaction between Bitcoin full nodes and IC nodes. It integrates lightweight full-node verification, IC consensus protocol customization, optimized state synchronization, and zero-trust finality proofs to resolve the fundamental tension between Bitcoin’s probabilistic finality and IC’s deterministic state updates. Contributions include: (i) the first implementation of Turing-complete Bitcoin smart contract execution natively on IC; (ii) mainnet evaluation demonstrating sub-second to few-second finality confirmation with low computational overhead; and (iii) enabling high-complexity, economically viable Bitcoin-native DeFi and cross-chain applications—thereby overcoming longstanding security and performance bottlenecks in Bitcoin–IC interoperability.

Technology Category

• Computer Vision: Interpretability, Explainability, and Transparency
• Machine Learning: Hardware-aware ML
• Data Mining & Knowledge Management: Representing, Reasoning, and Using Provenance, Trust

Application Category

• Economics, Online Markets and Human Computation: Economic aspects of blockchain and cryptocurrencies
• Security and Privacy: Cryptocurrency and smart contracts
• Systems and Infrastructure for Web, Mobile and WoT: Decentralized Web and Fediverse systems

Abstract

There is growing interest in providing programmatic access to the value locked in Bitcoin, which famously offers limited programmability itself. Various approaches have been put forth in recent years, with the vast majority of proposed mechanisms either building new functionality on top of Bitcoin or leveraging a bridging mechanism to enable smart contracts that make use of ``wrapped'' bitcoins on entirely different platforms. In this work, an architecture is presented that follows a different approach. The architecture enables the execution of Turing-complete Bitcoin smart contracts on the Internet Computer (IC), a blockchain platform for hosting and executing decentralized applications. Instead of using a bridge, IC and Bitcoin nodes interact directly, eliminating potential security risks that the use of a bridge entails. This integration requires novel concepts, in particular to reconcile the probabilistic nature of Bitcoin with the irreversibility of finalized state changes on the IC, which may be of independent interest. In addition to the presentation of the architecture, we provide evaluation results based on measurements of the Bitcoin integration running on mainnet. The evaluation results demonstrate that, with finalization in a few seconds and low execution costs, this integration enables complex Bitcoin-based decentralized applications that were not practically feasible or economically viable before.

Problem

• Enable Bitcoin smart contracts on Internet Computer
• Direct interaction between IC and Bitcoin nodes
• Reconcile Bitcoin's probabilistic nature with IC's irreversibility

Innovation

• Direct interaction between IC and Bitcoin nodes
• Turing-complete Bitcoin smart contracts on IC
• Reconciling Bitcoin's probabilistic nature with IC's irreversibility