Let’s Look at Why the Whole ‘Bitcoin Can’t Make Use of Smart Contracts’ Argument is Not True
Ever since the crypto industry was thrust into the spotlight a couple of years back, the main USP for premier projects such as Ethereum, EOS became their ability to make use of smart contracts. As a result of this, many so-called market experts began saying that Bitcoin was “simply too limited and conservative in its design” and that projects like ETH were “way ahead of the curve and would dominate the crypto-market in the future”.
However, as many of us now know, this is simply not the case — since there clearly exist many ways in which to devise certain niche’ types of smart contracts atop the existing Bitcoin framework. In this regard, three of the core applications of BTC smart contracts include:
- The Bitcoin Lightning Network (LN)
- The Arwen protocol — a unique security module designed for investors and crypto exchange operators.
- Abra — an operational tool that allows “users to peg their BTC holdings to tangible, real-world commodities.
In addition to the aforementioned examples, we also have things like Multisig addressing which is another clear use-case of a BTC-based smart contract.
On the very subject, well-known crypto personality Gavin Andresen has previously gone on record to state that “much of Ethereum’s current functionality can already be replicated via Bitcoin’s multisign module”. Similarly, Casa’ Jameson Lopp was also recently quoted as saying that he viewed “Bitcoin as a trust anchor since the currency’s native framework could deploy a host of expressive smart contracts”.
More On The Subject
In a recent interview with Epicenter, host Brian Crain spoke to Lopp about a variety of subjects including Bitcoin’s usefulness in relation to smart contracts as well as the general utility of the Bitcoin network. To be a bit more specific, Lopp was particularly asked to elaborate on the subject of BTC being used for payments.
In response, Lopp was quoted as saying:
“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.”
The Chief Technical Officer for Casa then went on to add that when talking about the BTC ecosystem, network participants had the power to “put-in whatever data they wished in the aforementioned authoritative record”. Following this, he went on to give a few examples of how this could be achieved in reality:
“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,”.
Bitcoin’s Framework is More Than Welcoming of Smart Contracts
When questioned specifically on the subject of smart contract-functionality (primarily from the POV of the BTC ecosystem), Lopp once again took up the example of RSK and how it can be used within such a context.
“They’re taking that smart contracting language from Ethereum, and they’ve created this sidechain that is pegged to Bitcoin. So, you can kind of have the best of both worlds. Whether that ends up being highly-adopted, nobody knows,”.
He then went on to say that there currently existed many Bitcoin devs who were ‘interested in using the asset’s functionality from the perspective of smart contracts’.
On this very issue, Lopp expressed his disappointment with the ETH project and went on record to say:
“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,”
In rounding off his conversation with the Epicenter team, Lopp got into the core differences that currently existed between Bitcoin and most of the other crypto asset networks in the market today. On the matter, he asserted that most of the advancements being made to the BTC base protocol were not only more measured but also highly calculated.
This conservative approach, in Lopp’s opinion, has helped the currency thrive despite the market at large being subjected to insane bearish conditions over the past 14 months or so.
“[Bitcoin maximalism] tends to be, I think, more economic thoughts of how these types of systems play out rather than a blind belief that Bitcoin was first and it must be the best and will never be superceded yatta, yatta, yatta. There’s definitely plenty of potential for other systems to get greater adoption and surpass Bitcoin or somehow be an order of magnitude more utilitarian than Bitcoin is and therefore supercede its network effects. I don’t think anything is set in stone, for sure. There’s going to be a lot of competition for the foreseeable future.”