Bitcoin

Ethereum

The way that Bitcoin and Ethereum store user data (or &#34;state&#34;), as well as the manner in which smart contracts interact with said data, are quite different. This is because Bitcoin utilizes a UTXO model while Ethereum uses an account-based one. Furthermore, mechanisms for securing L1 rollups deployed on each network also vary considerably.<h2 id="header-0">Rollups over the Lightning Network</h2>We&#39;ve seen that rollups are gradually gaining popularity on the Ethereum network. However, the Lightning Network needs to adopt rollups in order to become popular on the Bitcoin side as well. If rollups were adopted on Bitcoin, we would have a payments network that is more likely to succeed than the current Lighting Network.Comparing these two can be tough because they have different purposes. To get a clearer idea, it might help to consider liquidity and the number of users. Thousands of Lightning nodes are active on the network right now. Some of those are custodial, meaning they have customers who use their services. So it&#39;s hard to say how many users there are in total, making it impossible to know how many transactions are taking place through the Lightning Network at any given time.In some cases, rollups might be a more viable option than others- for example, if you want to get offline payments without needing inbound liquidity or having channel limitations. However, if what you need are high capacity and high volume but low value transactions like micro or nano payments, then a state channel such as the Lightning Network is most likely a better bet.P2P or B2B payments may work best with rollups because they offer users a much smoother experience. It also depends on what kind of payment we&#39;re talking about- some types might do better with rollups specifically designed for them.<h2 id="header-1">Rollups potential</h2>Multi-sigs are used to secure rollups rather than an archetypal consensus like Layer 1s. Rollups have single block producers instead of multiple ones, meaning that users may need to wait 24 or 48 hours to access their funds during outages.While people are still working on tools to manage the Lightning Network and user experience, rollups could potentially solve these issues. Rollups can improve trustworthiness, security, and uptime. Even so, base-layer blockchains have their challenges - we keep running into bugs. It&#39;s possible that we&#39;re getting closer to developing a system that will work well for everyone in the future though.Use cases show that rollups currently outperform the Lightning Network or other Layer 2 protocols available on Bitcoin today.<h2 id="header-2">What can we do with ZK rollups that we can&#39;t do on the Bitcoin Layer 1?</h2>There are various applications that we can do on a ZK rollup.For example, it&#39;s advantageous for any blockchain ecosystem to have a use case in the real world, and one way to do that is by starting with stablecoins. If you can develop universally accepted stablecoin payment rails, then later on down the road, it will be much simpler to introduce your token.Let&#39;s say Lightning Network becomes the go-to method for transferring stablecoins--in that scenario, Bitcoin would have an advantage over Ethereum. However, if rollups become the leading Ethereum solution for moving stablecoins around, then it&#39;ll be easier to also transfer Ether tokens discreetly.It&#39;ll take some effort if you want to send a stablecoin over the Lightning Network. The solution is swapping the stablecoin back and forth from Bitcoin multiple times to finish the payment which, of course, means racking up transaction fees. This exposes one of the issues with using Lightning Network in the first place. ZK rollups on Bitcoin could come in handy here as they have the ability to transfer tokens too; this would fill an important role for users.<h2 id="header-3">What does it take to take a ZK rollup into Bitcoin?</h2>The good news is that even if new OP codes are needed, it won&#39;t require a hard fork. If you want to stay on the network and in consensus, old nodes don&#39;t need to update their software they can still send and receive coins with other nodes that have upgraded and use the new OP codes. Bitcoin has already successfully done this type of soft fork before, so we shouldn’t be too worried about it now.<h2 id="header-4">Next Steps?</h2>Before we determine what needs to be changed to implement ZK rollups on Bitcoin, many experiments need to be conducted. If a soft fork is decided upon, it could prove beneficial in more than one scenario. For example, if we use the soft fork for validity rollups, this will unlock other potential use cases and allow the network to take advantage of OP codes for different purposes.The developers are already hard at work on the testnet, and we can&#39;t wait to see what it reveals! Multiple experiments will be conducted by various researchers to make sure that everything goes off without a hitch and benefits users as much as possible.-------Subscribe to receive our daily brief, extended weekly newsletter, and in-house research content!<a href="https://www.m6labs.co/s/m6-labs-research-?utm_source&#61;substack&amp;utm_medium&#61;menu" rel="noopener noreferrer nofollow">Subscribe</a>Please Share, Leave Feedback, and Follow Us on <a href="https://twitter.com/M6Labs" rel="noopener noreferrer nofollow">Twitter</a>, <a href="https://t.me/illuminatiDaily" rel="noopener noreferrer nofollow">Telegram</a>, and <a href="https://www.linkedin.com/company/m6-labs" rel="noopener noreferrer nofollow">LinkedIn</a> to stay connected with us.

The Crypto Illuminati: ZK rollups on Ethereum vs. ZK rollups on Bitcoin

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