Developers focused on enhancing Bitcoin’s decentralized finance (DeFi) features are likely considering the implementation of zero-knowledge (ZK) proofs. This technology is not part of the existing system and would necessitate a soft fork—or an updated software version—for its integration.
Edan Yago, a Bitcoin expert with more than ten years of experience and a key contributor to the smart contract platform BitcoinOS (BOS), sees this as a challenge.
“Changing a blockchain’s code, particularly one that holds $2 trillion in value, is akin to conducting open-heart surgery,” Yago said in an interview. “While hard forks pose greater difficulties, any type of fork presents its own set of complications.”
A “fork” refers to an alteration in a blockchain’s code that causes it to separate into distinct paths. Soft forks allow older versions to interact with the update, while hard forks create incompatibility, requiring all users to upgrade their software.
ZK proofs offer a cryptographic technique to validate claims while ensuring privacy by concealing the underlying information. Although this capability is not present in Bitcoin’s current software, it could potentially be enabled through proposed changes such as OP_CAT and OP_CTV. Yago believes that developers can find alternative methods to enable ZK proofs on Bitcoin without resorting to a fork.
“It’s up to developers to prove that no alternative engineering solutions exist to achieve this,” he remarked.
This is the goal of BOS, which is working on BitSNARK, a Bitcoin rollup protocol designed to enhance the scalability of the original blockchain. These technologies have been inspired by the introduction of BitVM by Robin Linus in October 2023, which outlined how Ethereum-like smart contracts could function on Bitcoin.
BitcoinOS has now released an open-source version of what Yago calls a “fully production-ready” BitSNARK protocol, giving developers access to ZK verification capabilities on Bitcoin and enabling connections to other blockchains like Ethereum, Solana, and Cardano.
With BitSNARK, developers can process large and complex applications while proving the results with only 300 bytes in standard Bitcoin transactions. This innovation could lead to the establishment of BTCFi, a term used to describe DeFi on Bitcoin, by facilitating cross-chain bridges, decentralized exchanges, and stablecoins backed by Bitcoin (BTC).
Although many projects aim to implement decentralized finance on Bitcoin, they tend to rely on OP_CAT or OP_CTV codes that necessitate a fork in the software. Yago strives to reach the same end goal via a different approach.