Internet Computer

The much-awaited BTC Integration has gone live on the mainnet. This huge development will now bring advanced smart contract functionality to the world’s largest cryptocurrency. The Internet Computer can now serve as a Layer 2 for Bitcoin where smart contracts on the Internet Computer can hold, send and receive Bitcoin natively, without the need for blockchain bridges or other third parties. This provides a trustless foundation for various DeFi and Web3 applications seeking to code Bitcoin.The world’s most popular cryptocurrency can now be used for DeFi activities like yield farming, lending, payments, and more. This is achieved through the Internet Computer’s enhanced Chain-key cryptography. The direct integration with Bitcoin obliviates bridged and wrapped Bitcoin, a technique typically used to facilitate interaction between different blockchains, and one that is error-prone and often hacked. To enable fast Bitcoin transactions between smart contracts on the Internet Computer, the DFINITY foundation is currently working on Chain-Key Bitcoin (ckBTC). Here, ckBTC will act as a local ledger facilitating fast transactions with low fees and only settle transactions on the Bitcoin network when necessary.The API for the testnet had gone live in August as announced <a href="https://medium.com/dfinity/btc-icp-integration-beta-release-the-bitcoin-testnet-api-is-now-available-bab84c378c1e" rel="noopener noreferrer nofollow">here</a> along with details of this integration.Marking this momentous achievement, Manu Drijvers, Director of Engineering at the DFINITY Foundation explains:<blockquote>“Blockchains are like walled gardens, incapable of interaction between one another. When this comes to Bitcoin, applications, such as DeFi applications, that could benefit most from interacting with the world’s largest cryptocurrency do not have the ability to do so. The Internet Computer’s integration with Bitcoin is a true game-changer for the industry, finally bringing smart contract functionality to Bitcoin and enabling a whole new landscape of DeFi and dapp development never before possible using BTC. We are incredibly excited to see how developers interact with this revolutionary functionality.”</blockquote>The Internet Computer’s integration with Bitcoin also provides a more secure alternative to centralized bridges in the form of threshold ECDSA (Elliptic Curve Digital Signature Algorithm). The implementation of ECDSA empowers the Internet Computer’s canister smart contracts, to directly conduct Bitcoin transactions without an intermediary or bridge. This provides a trustless foundation for DeFi projects using Bitcoin and enables IC developers to code natively on Bitcoin.Jan Camenisch, Chief Technology Officer at the DFINITY Foundation, says:<blockquote>“Making Bitcoin programmable will increase the overall potential of blockchain technology. Unlocking Bitcoin’s unmatched liquidity will bring enormous benefits and new possibilities for users and developers across a wide range dapps including DeFi, GameFi, SocialFi, and NFTs This direct integration also eliminates the Achilles’ heel of other approaches to make Bitcoin available on other networks such as wrapping and bridging. Unfortunately, we have seen the drawbacks of these solutions over the past year through a number of high-profile hacks, leaving networks hopelessly vulnerable to attacks. Bitcoin lending via decentralized exchanges, for example, is now possible with security superior to what is available on any other platform thanks to the Internet Computer’s direct and trustless integration, making it a natural choice for DeFi developers.”</blockquote>Some ICP Community projects are already building solutions using this integration are:<ul><li>DEX projects such as <a href="https://www.helixmarkets.io/" rel="noopener noreferrer nofollow">Helix Markets</a> and IC Lighthouse are building on the Bitcoin and Chain-Key signing features to offer bridgeless inter-chain token swaps.</li><li>Platforms like <a href="https://tyhcm-sqaaa-aaaah-abjya-cai.ic0.app/" rel="noopener noreferrer nofollow">Finterest</a> will allow cross-chain lending and borrowing against crypto without bridging, including Bitcoin.</li><li>Beyond DeFi, projects like CrowdfundNFT — an NFT-based crowdfunding platform are using this integration more creatively. They will start accepting funding for projects in BTC which will open a whole new way of crowdfunding.</li><li>Other examples of interesting use cases in development are transactions in BTC on NFT marketplaces and peer-to-peer transfer of BTC directly on social media and instant messaging dapps.</li></ul>The programmability of Bitcoin will open many more unique and imaginative use cases in the future.All resources, documents, and sample codes to start coding Bitcoin are available here: <a href="https://internetcomputer.org/bitcoin-integration" rel="noopener noreferrer nofollow">https://internetcomputer.org/bitcoin-integration</a>

BTC<>ICP Mainnet Integration Complete: Bringing Smart Contract functionality to Bitcoin

Internet_Computer

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