DFINITY Foundation, the not-for-profit organisation behind Internet Computer (ICP), has announced that it will leverage new cryptography techniques to integrate with the Bitcoin network, resulting in smart contracts that directly operate on bitcoin balances for the first time.
What is ICP?
ICP is a blockchain-based open-source computing platform designed to address some of the major issues with today’s internet – weak system security, monopolisation of internet services, and misuse of personal user data.
Through a multi-layered proof-of-stake consensus mechanism, DFINITY aims to create a modern decentralised internet capable of hosting practically any applications, big and small, including smart contracts and DeFi. Unlike the traditional internet, applications and data are hosted on-chain, rather than relying on centralised infrastructure.
DFINITY Launches Bitcoin Smart Contracts
With an overwhelming 96.55 percent support from the ICP community, the resolution to launch Bitcoin smart contracts was passed.
According to DFINITY, “bringing smart contracts to the Bitcoin network will enable developers to build all manner of exciting new systems and Web 3.0 services that process bitcoins and run entirely from the blockchain, creating a foundation for immense new value creation on both networks”.
The Internet Computer is powered by novel ‘chain key cryptography’ that allows it to sign transactions for other blockchains such as Bitcoin. This capability will be used to provide smart contracts hosted on the Internet Computer with native bitcoin addresses via a direct integration of the networks. Internet Computer smart contracts will gain access to bitcoin liquidity, and Bitcoin will gain powerful new smart contract functionality, without the need for insecure and cumbersome trusted bridging services. This will help realise Satoshi’s vision by allowing bitcoin to power a new generation of Web 3.0 internet services.
Dominic Williams, founder and chief scientist, DFINITY Foundation
In short, the integration will allow for the creation of smart contracts to enable lending, yield farming, derivatives, and other DeFi applications for Bitcoin.
Williams goes further in outlining the benefits of the integration:
This means it will be possible to create a Bitcoin wallet using Internet Computer smart contracts that is directly served from the blockchain into a web browser, which then allows the user to securely, conveniently and anonymously authenticate themselves using, say, the fingerprint sensor on their laptop, or face recognition on their phone, in order to send bitcoins to another user, without need for the key management typically involved in self-hosting crypto.
Dominic Williams, founder and chief scientist, DFINITY Foundation
Earlier this year, ICP crashed some 95 percent on news that the developers had sold their holdings. However, the token was trading 13 percent higher on the recent announcement, following a rather tumultuous 48 hours where US$2.5 billion was wiped off the crypto markets.
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