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Bitcoiner drops BitVM paper — bringing Ethereum-like contracts to Bitcoin

October 10, 2023 Coin Telegraph

Adam Back

The author of the white paper, Robin Linus, based BitVM’s architecture on Ethereum’s optimistic rollups with fraud proofs and recent Merkle tree developments.

A Bitcoin developer has proposed a new way to bring more expressive off-chain smart contracts to Bitcoin (BTC) without needing a soft fork.

Announced in an Oct.9 white paper titled “BitVM: Compute Anything on Bitcoin” by ZeroSync’s project lead Robin Linus, BitVM enables Turing-complete Bitcoin contracts without altering Bitcoin’s consensus rules.

"Any computable function can be verified on Bitcoin"https://t.co/Itf9UHos0C pic.twitter.com/CLQv49Ydsg
— яobin linus (@robin_linus) October 9, 2023

A Turing Complete system is one which can theoretically provide an answer to any computational problem.

With BitVM, the “logic” of Bitcoin contracts would be executed off-chain but verification would be made on Bitcoin — similar to Ethereum’s optimistic rollups.

BitVM’s architecture is based on fraud proofs and a challenge-response model where a “prover” can make claims and a “verifier” can perform a fraud-proof to punish the prover when false claims are made.

Linus explained that Bitcoin, in its current form, is limited to basic operations, such as signatures, timelocks, and hashlocks — but that can now be broadened with BitVM, which Linus says can compute a host of interesting applications.

“Potential applications include games like Chess, Go, or Poker, and particularly, verification of validity proofs in Bitcoin contracts.”

“Additionally, it might be possible to bridge BTC to foreign chains, build a prediction market, or emulate novel opcodes,” said Linus.

Linus said a limitation of the model is that it is limited to a two-party setting with a prover and a verifier and that a significant amount of off-chain computation and communication is needed to execute programs.

Linus said the next “milestone” is to fully implement the BitVM in addition to Tree++ — a high-level programming language to write and debug Bitcoin contracts.

BitVM is enabled by the Taproot soft fork which took place in November 2021.

Linus cited Ethereum research into optimistic rollups and a study on Merkle Trees in contributing to the eight-page white paper.

Bitcoiners respond to BitVM

Prominent Bitcoiner Eric Wall posted on X (Twitter) that the concepts outlined in the BitVM white paper “check out” and is “cautiously excited” to see what real-world experiments stem from it.

Bitcoin analyst Dylan LeClair is also impressed with BitVM’s white paper. But Adam Back, a Bitcoin Core contributor suggested that people shouldn’t get too excited about the development just yet.

for people getting (over) excited, this is cool but effectively a generalization of a two-party game - it says right in the abstract - so it's a bit like Greg Maxwell's 2016 ZKP contingent payments implemented example https://t.co/OeHRsbFjud
— Adam Back (@adam3us) October 9, 2023

One builder in the blockchain space, “dotta,” noted that there is already a proof-of-concept on GitHub.

Another X user, Sam Parker, attempted to resolve a common fear among Bitcoin maximalists by explaining that BitVM won’t force Bitcoin’s to be “locked” into these contracts.

“Finally, this is opt-in. If you don’t trust your coins being locked to some Turing complete contract (totally reasonable) then don’t lock them to a Turing complete smart contract. One of [the] beauties of the UTXO system is security sandboxing.”

Others, such as “psage” say BitVM adds to the list of things that will push Bitcoin’s price forward in the next bull market.

The bullish stuff around #Bitcoin is snowballing, lots of them controversial, nevertheless a few off my finger tips:
- BitVM
- Ordinals
- Multiple Pres Candidates talking about it
- ETF
- Halving
- Privacy improvements
- Exponential Hash Rate increase
- Countries mining
....
— psage (@perspiringsage) October 9, 2023

Cointelegraph contacted Linus for comment but did not receive an immediate response.

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Multiple Silvergate lawsuits over alleged FTX ties combined by judge

April 20, 2023 Coin Telegraph

Coin Telegraph

Plaintiffs seeking damages from Silvergate’s collapse have joined forces with their respective lawsuits.

A California judge has combined three investor lawsuits against defunct crypto bank Silvergate Bank involving the bankrupt crypto exchange FTX.

On April 19, United States District Judge Jacqueline Scott Corley of the Northern District of California ruled that the three lawsuits would be consolidated. Each accuses Silvergate of helping to facilitate investor fraud by the collapsed crypto exchange FTX.

The three cases were brought against Silvergate by four former investors. They will remain separate from other federal cases against FTX and its founder Sam Bankman-Fried but will be combined by mutual agreement of the litigants, according to an April 19 report from Law360.

The order stated:

“The Silvergate cases involve common questions of law and fact, as they name common defendants, arise from the same alleged course of conduct, and assert overlapping causes of action, such that the Silvergate cases are appropriate for consolidation.”

Matson Magleby, Golam Sakline, Nicole Keane, and Sonam Bhatia filed the trio of suits in February.

The plaintiffs allege that Silvergate aided and abetted FTX’s alleged misconduct. Actions included processing illegitimate transfers of FTX customer funds to its sister trading firm Alameda Research.

Silvergate disclosed its plans to “voluntarily liquidate” assets and shut down operations in early March following a bank run. Additionally, the bank was hit with a class-action suit in January for securities law violations.

FTX filed for bankruptcy in November last year and its collapse and the resultant crypto market crash created liquidity problems for Silvergate.

In a related development, New York state’s financial regulator has said that the collapse of Signature Bank was caused by a run from a broad base of depositors across business sectors, not crypto.

Crypto-friendly Signature Bank was seized by federal regulators in March.

In a House Financial Services Committee hearing on stablecoins on April 18, New York State Department of Financial Services (NYDFS) Superintendent Adrienne Harris said “it is a misnomer that the failure of Signature Bank was related to crypto.”

According to an April 19 Bloomberg report, she said that depositors including wholesale food vendors, fiduciaries, trust accounts and law firms left the bank and caused the run.

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Blockchain Association files further FOIA requests over banking closures

April 17, 2023 Coin Telegraph

Blockchain Association

The crypto advocacy group wants clarity on recent regulatory action against digital asset-friendly banks.

More Freedom of Information Act (FOIA) requests seeking information on recently closed crypto-friendly banks have been submitted by cryptocurrency advocacy group the Blockchain Association (BA) to two regulators.

On April 14, the Association said that in addition to the FOIA requests, it has also filed Freedom of Information Law (FOIL) requests to the Federal Housing Finance Agency (FHFA) and the New York Department of Financial Services (NYDFS).

The organization is seeking further information on the de-banking of crypto companies following the seizure of Signature Bank and the failure of Silvergate Bank.

The BA said that its request to the NYDFS was to:

“Seek to understand whether the closure of Signature Bank was the result of the bank’s insolvency or a decision to send an anti-crypto message despite the bank being fully solvent.”

The Association also reported that it was investigating whether the failure of Silvergate “was the result of a politically-motivated decision by the Federal Home Loan Bank of San Francisco, which is overseen by the FHFA, to take the extraordinary and unusual action of pulling a loan made to Silvergate only months earlier.”

1/ Following last month's FOIA requests to investigate the possible de-banking of crypto firms, today, BA submitted additional public information requests to the FHFA and NYDFS.https://t.co/x6sPRkUhBx pic.twitter.com/ZSeCSBiIaR
— Blockchain Association (@BlockchainAssn) April 14, 2023

In early March, Silvergate’s parent company announced it would “wind down operations” for the crypto and tech-focused bank. Its peer Silicon Valley Bank collapsed on March 10 following a bank run, and the Treasury, Federal Reserve, and other agencies closed Signature Bank on March 12.

The Association initially filed for further information from the Federal Deposit Insurance Corporation (FDIC), the Board of Governors of the Federal Reserve System and the Office of the Comptroller of the Currency (OCC) regarding the de-banking on March 16.

On April 16, the Blockchain Association and the DeFi Education Fund filed a brief in a United States District Court over the sanctioning of Tornado Cash.

The Blockchain Association is an advocacy and lobbying group for the crypto sector, with around a hundred members that include industry executives, investors, companies, organizations, and projects.

In 2022 the Association spent $1.9 million lobbying the U.S. government according to campaign finance data firm OpenSecrets.

Cointelegraph contacted the Blockchain Association for further details but did not immediately receive a response.

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US credit crunch means it’s time to buy gold and Bitcoin: Novogratz

March 16, 2023 Coin Telegraph

BTC

The Galaxy Digital CEO predicts tough times ahead for the U.S. economy, but continues to be bullish on crypto.

The United States is headed for a credit crunch and now is the right time to buy gold, silver and Bitcoin (BTC), says Galaxy Digital founder and CEO Michael Novogratz.

“We are going to have a credit crunch in the U.S. and globally,” Novogratz explained in an interview on CNBC. "You want to be long gold and silver [...] and you want to be long Bitcoin,” he said.

Speaking on CNBC’s Squawk Box on March 15, Novogratz noted that banks typically rebuild capital by lending less, meaning that a credit crunch is imminent, noting that indicators like the commodities market are already pointing to a recession.

The U.S. banking industry fell into turmoil this month, with Silvergate Bank, Signature Bank, and Silicon Valley Bank (SVB) all collapsing in the same week. Moody's downgraded the U.S. banking system outlook to "negative."

In the interview, Novogratz suggested a reversal in interest rate policy was on the cards, saying that while the Federal Reserve would “like to do a dovish hike, just for credibility’s sale,” doing so would be a “huge policy error.”

Alongside his prediction of tough times for the U.S. economy, Novogratz expressed a bullish sentiment for crypto, saying:

“If there was ever a time to be in bitcoin and crypto, this is why it was created, in that governments print too much money whenever the pain gets too great, and we’re seeing that.”

The price of Bitcoin dipped after the collapse of Silicon Valley Bank last week but managed to reach new 2023 highs of $26,514.72 on March 14, according to CoinMarketCap.

Looks like Bitcoin is moving on from its risk asset days. As more and more people begin to understand its fundamental value case, the market is slowly turning to Bitcoin as a digital form of gold.
— Handre van Heerden (@Handrev) March 14, 2023