BitVM Optimization: Improving Bitcoin Contract Efficiency and Security

Bitcoin, as a decentralized, secure, and trustworthy digital asset, has long faced scalability issues. Its UTXO model leads to a stateless system, making it difficult to execute complex computations that depend on state, which limits the construction of decentralized applications and complex financial instruments.

In December 2023, the ZeroSync project proposed the BitVM solution, which achieves Turing-complete Bitcoin contracts without changing the consensus of the Bitcoin network. BitVM utilizes Bitcoin scripts and Taproot to implement optimistic Rollup, allowing connections between Bitcoin UTXOs and enabling stateful Bitcoin scripts. This greatly expands the potential use cases for Bitcoin.

But BitVM is still in its early stages, and there are some issues regarding efficiency and security.

1. Challenges and responses require multiple interactions, resulting in high transaction fees and longer cycles.
2. Lamport one-time signature data is relatively long
3. The complexity of the hash function is high, and the costs are relatively large.
4. The contract is large while the block capacity is limited.
5. Adopt a permissioned model, only supporting two-party challenges.

In response to these issues, this article proposes the following optimization ideas:

Reducing OP Interaction Frequency Based on ZK

Use zero-knowledge proofs to reduce the number of challenges in BitVM and improve efficiency. The challenge will no longer be the original algorithm, but the verification algorithm, reducing the number of challenges and shortening the cycle. ZK Fraud Proof can be constructed to achieve On-Demand ZK Proof, requiring ZK Proof only when there is a challenge.

Bitcoin Friendly One-Time Signature

Using Winternitz one-time signatures instead of Lamport signatures can reduce the bit commitment size by 50%, significantly lowering transaction fees. In the future, more compact one-time signature schemes can be explored.

Bitcoin-friendly Hash Functions

Implement the BLAKE3 hash function based on Bitcoin script to support Merkle inclusion proof verification. Explore other Bitcoin-friendly hash functions, such as Keccak-256, Grøstl, etc.

Scriptless Scripts BitVM

Using Scriptless Scripts technology, implement logical gate commitments in the BitVM circuit with Schnorr multi-signatures and adapter signatures, saving script space and improving efficiency.

Permissionless Multi-Party Challenge

Research on permissionless multi-party OP challenge protocols expands BitVM's trust model from 1-of-n to 1-of-N. It addresses issues such as Sybil attacks and delay attacks, achieving a more trust-minimized BitVM protocol.

The exploration of BitVM technology has just begun, and in the future, we will continue to explore more optimization directions to achieve Bitcoin scalability and prosper the Bitcoin ecosystem.