Bitcoin does not have a true layer-2 network (as it is called on Ethereum), mainly because scaling solutions that are currently available do not inherit Bitcoin’s security model. No.*
Ethereum rollups which upload transaction data directly to Ethereum’s mainnet leverage the security of this network, assuring that transactions executed on these layers will be protected by the same mechanisms that secure the base layer.
Bitcoin’s “layer-2” Sidechains are solutions like the Liquid Network and Rootstock. These sidechains are independent of Bitcoin and use their own validators or miner. Sure, they may share mining hash rate, or checkpoint snapshots into Bitcoin, but it’s fundamentally a different level of security.
To enable layer-2 solutions, Bitcoin protocol upgrades will be required. Innovations such as BitVM, can help to reduce trust in bridging. These upgrades would introduce covenants — mechanisms that restrict how BTC can be spent — that enable secure, trust-minimized interoperability and allow Bitcoin to support a robust layer-2 infrastructure similar to Ethereum’s.
StarkWare announced a major milestone on Wednesday, namely the successful verification of the first proof with zero knowledge using their new STARK Verifier in Bitcoin’s Test Network Signet. The achievement was made after three months’ research into the potential of OP_CAT – one of these proposed Bitcoin upgrades.
StarkWare announced that its verifier was developed with Weikeng G. Chen, a venture partner at L2 Iterative. This is the first practical large-scale application of this Opcode. This demonstrates the potential for zk-based solutions to be developed as layer-2s in Bitcoin.
“This type of verification methodology is completely different from what’s already being explored by other scaling solutions on the Bitcoin network because it doesn’t require the use of fraud proofs or liveness,” “The code for this verifier was published on Github,” the company stated.
Chen noted the groundbreaking nature of his research. “We started with nothing. There’s no information about zk proofs on Bitcoin or the necessary mathematical operations. We had to build the full xstack leading to the STARK verifier’s implementation,” He said.
The new verifier employs Circle STARKs — cryptographic proofs which significantly speed up the proving process. Stwo, StarkWare’s next generation STARK verifyer, will use them as well.
The current demo only verifies the solution to a discrete mathematical problem: the 32nd number in the Fibonacci squared sequence — or 21,783,0922 — but the team plans to move on to demonstrate a wide range of computations that could ultimately form the basis of a virtual machine.
Bitcoin holders can still engage in DeFi until then by using a variety of different approaches to bring BTC into other networks. Each approach comes with its own set of tradeoffs.
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