TL;DR Breakdown
- Smart-contracts capabilities are coming to Bitcoin
- Bitcoin’s smart contracts are not as advanced as those used by Ethereum.
- Dfinity project intends to localize Bitcoin as a cryptocurrency to increase the adoption
Dfinity Foundation’s Internet Computer blockchain is on a quest to make Bitcoin mainstream. Internet Computer announced their integration with Bitcoin to enable the use of smart contracts. With the improvement, Bitcoin will be using self-executed contracts that work automatically according to their programming and the task they are to take up.
Over time, Bitcoin has become the premier cryptocurrency. However, Bitcoin’s smart contracts are not as advanced as those used by Ethereum. With a net value of above $1T, Bitcoin has incorporated Internet Computer Protocol and Chain Key Protocol to make vital improvements to their system. The time to guarantee an investor of a transaction has improved from 40 minutes when using Bitcoin to 2 seconds when ICP is involved due to eliminating bridging services.
Dfinity Foundation has announced a $223m fund to facilitate a decentralized network enabled by blockchain and act as the Developer Ecosystem Program. The program is set up to support the adoption of smart contracts and the development of the blockchain. The project has earned support from firms like Andreessen Horowitz and Polychain Capital.
It is an effort to increase mainstream adoption
The main idea behind the Dfinity project is to localize Bitcoin as a cryptocurrency to increase transactions. In most cases, the volume of currency exchanged is taken as the base consideration when measuring the adoption of cryptocurrency, but the number of transactions is equally essential. The project also aims at improving the use of Decentralized Finance and Web 3.0.
Blockstack, now known as Stacks, aims to bring smart contracts to Bitcoin and improve DeFi. The network brought about a program, Stacks 2.0, which facilitates investors when building smart contracts and acts as a bridge from the web to Bitcoin.
Regardless of Bitcoin not achieving its primary goal of becoming an electric cash system, it has dominated the cryptocurrency and has the lion’s share in terms of market volume. By improving the design and introducing new concepts like smart contracts, the system is promising.
Cardano Alonzo upgrade already brought smart contract capabilities to ADA
Bitcoin has had smart contracts available for quite some time now. For example, the Bitcoin-based platform Ethereum has made extensive use of these contracts to facilitate decentralized applications (dApps). Cardano too is moving in the same direction through its Shelley update, which will introduce smart contracts on its blockchain.
The integration is expected to upgrade Bitcoin to a whole new level. It will facilitate investors in settling contracts and even enable them to access their funds when the terms of the contract have been met.
The concept is not unique to Bitcoin though. Ripple, EOS, Tron, and Verge all have this feature in place in their platforms already. However, that has not stopped Bitcoin from dominating the cryptocurrency market.
The process is to be done through Chain Key Protocol, which will make Bitcoin a decentralized platform and enable it to work at a faster pace as compared to other cryptocurrencies that are yet to introduce smart contracts. Internet computer Blockchain was rated as the third-best blockchain network after EOS and Tron by Weiss Ratings earlier this month.
