The expansion plan based on the Bitcoin UTXO account model is considered by the industry to be the "most halal" second-layer solution. This plan attempts to perform off-chain ledger calculations based on Bitcoin UTXO and ensure the authenticity of the ledger through client verification, thereby retaining the original characteristics of Bitcoin and realizing the sharing and security of the second-layer ledger.
It has always been recognized by the industry that this plan is very difficult to implement. Well-known projects and protocols built through this plan include RGB, RGB++, BitVM, etc. Although well-known, the progress of the plan is actually relatively slow. For example, the multiple technical points involved in RGB have high implementation difficulties. For example, although BitVM provides a method to implement complex contracts on the Bitcoin network, there are still disputes over some technical details.
Such a relatively difficult technical route, why are there still a large number of project parties willing to practice it? Compared with other models, the BTC isomorphic UTXO model second-layer solution is undoubtedly both safe and elegant. Looking back at the development of the second-layer expansion plan based on UTXO, we found that the popularity of the "asset issuance" model written into UTXO, such as inscriptions, has injected a lot of attention and resources into this UTXO-based second-layer expansion plan, allowing developers and project parties to seriously examine the possibility of implementing the second-layer plan through this path.
Unlike Ethereum's second-layer expansion plan, which has a clear plan, Bitcoin's second-layer plan is flourishing, and accompanied by some upgrades to the Bitcoin protocol itself, Bitcoin's second layer actually has many possibilities, which is fun and innovative.
What improvements and innovations have the project parties made to Bitcoin's second layer based on UTXO technology? In order to explore the answers to these questions, Golden Finance interviewed TBC's CMO and explored the implementation path of Bitcoin's second layer based on the UTXO model based on technology.
Golden Finance: Could you please introduce how Bitcoin's second layer based on the UTXO model is technically implemented?
TBC:This technology encapsulates data into each UTXO of Bitcoin, and then ensures asset security through client verification.
For example, the idea of RGB is to bind the off-chain RGB transaction with the UTXO of Bitcoin transaction. The RGB++ protocol is inspired by the RGB protocol, and its main idea is similar to RGB. It performs off-chain calculations, executes and verifies transactions, and finally settles on the Bitcoin chain. The difference between RGB and RGB++ is that RGB++ adopts a different approach in transaction and asset verification.
TBC is different from the above two solutions. We adopt a large block plus data trimming, plus a smart contract solution. Our positioning is a smart contract layer of Bitcoin, introducing smart contract solutions for the Bitcoin system and bringing massive applications. TBC is also the founder of the Bitcoin virtual machine BVM.
At present, the Bitcoin ecosystem is rising, more and more developers are pouring in, and new applications are emerging in an endless stream. However, the mainnet block of Bitcoin is still limited to one megabyte, and as the necessary data packets transmitted by the network every ten minutes are getting larger and larger, the mainnet is not able to meet this demand. The design of Bitcoin's small blocks cannot handle more than 100 megabytes per minute.
TBC's large block plus data clipping plus UTXO smart contract model can help BTC solve the problems of congestion and block limit. TBC initially chose this path because it found that the UTXO module is such an underlying model that is naturally suitable for high concurrency and high performance.
Golden Finance: What difficulties did TBC encounter in the implementation process of this path, and how did it solve them?
TBC:The main problem is actually the poor scalability of BTC. It was not until 2017 that the segregated witness upgrade was activated, which solved some transaction plasticity problems on the Bitcoin chain. In 2018, developers began to gradually deploy some nodes. More importantly, the parameter upgrade in 2012 brought a more efficient, flexible and private transmission method to Bitcoin. The core of this upgrade is the use of Schnorr signatures and module abstract syntax tree contracts.
The above upgrades provide a better foundation for the further expansion of BTC. Some of the development difficulties we mentioned before have been alleviated to a certain extent after the upgrade. Because of the development of Bitcoin's own technology, similar to modifying the signature, it actually adds a bridge connecting the first layer and the second layer, not directly expanding the first layer.
Golden Finance: At present, there are many routes and projects for Bitcoin's second layer. What do you think?
TBC: In my opinion, using BTC as the asset settlement layer and then building local consensus and computing verification capabilities to achieve the second-layer expansion plan is feasible. A big difference between the Bitcoin ecosystem and the Ethereum ecosystem is that it does not comply with any unified norms and orthodoxy, so it can flourish.
Golden Finance: The consensus in the industry still feels that the second-layer model of UTXO is too difficult to implement? How to solve this difficulty?
TBC:There is actually a misunderstanding in the industry about the UTXO model. They believe that the UTXO model cannot maintain the full average state or cannot realize circular calls, so it cannot realize smart contracts. This view is now one-sided and outdated. TBC has proved that the blockchain of the UTXO model can fully realize smart contracts, but the implementation method is different from other second-layer solutions. Of course, the basic tools for realizing smart contracts based on the UTXO model are constantly maturing, and everyone is constantly trying.
For TBC, the key node of development is actually the upcoming launch of the TBC 20 standard protocol, which means that it will become easier for project parties to do applications and protocols on TBC, which can promote the prosperity of the TBC chain ecology and even the prosperity of the entire Bitcoin ecology.
Golden Finance: Compared with other second-layer solutions, what are the advantages and innovations of TBC?
TBC:We are equivalent to an innovative route. At present, only TBC is doing this BVM solution. Simply put, this solution is a virtual machine based on the recovery and function expansion of Bitcoin's script system, and is also an execution engine for TBC smart contracts.
It includes language stacks such as input and output stacks, so that higher-level logic can be achieved when performing any operation. The current execution structure of programming languages relies largely on the execution stack. In principle, as long as the stack structure is used, any complex program can be implemented. Of course, it is also necessary to ensure that there are enough memory resources. The stack structure can also not be used as the basis of the programming language, but due to some restrictions of Bitcoin on the script system, only some simple logical judgments can be made, and the opcodes that can be used are relatively limited, so some complex smart contracts cannot be implemented.
This requires BTC's core developers to continue to make some proposals, such as the recently popular OP_CAT proposal. Simply put, OP_CAT can realize the combined connection processing of multiple UTXO unlocking script byte strings to improve the programmable characteristics of the BTC main network.
Golden Finance: What stage has the Bitcoin ecosystem developed to, and what are the difficulties in its current development?
TBC:The Bitcoin ecosystem is definitely still in its early stages. The current difficulty is that there are too few developers. Some developers who have just joined the Bitcoin ecosystem need to relearn the development language, which takes about one or two months. As the number of developers increases, the number of applications developed will increase, thereby achieving a qualitative change from quantitative change, and achieving a prosperity similar to the Ethereum ecosystem. At present, there are more teams in the Asia-Pacific region developing the Bitcoin ecosystem.
Golden Finance: For retail investors, how to seize some opportunities in Bitcoin?
TBC:Protocols that can help Bitcoin make small payments or large mortgage lending agreements are worthy of attention. And the smart contract layer based on the UTXO architecture can also run some relatively excellent projects.
JinseFinance
Cheng Yuan
Sanya