Bitcoin Rollups are a pioneering Layer 2 scalability solution designed to enhance Bitcoin's transaction capabilities without compromising its core security and decentralization.
The role and functioning of Rollups
Bitcoin can handle about 7 transactions per second, which is insufficient for complex applications like DeFi. Rollups address this issue by bundling multiple transactions into a single batch, processing them off-chain, and then only sending a single cryptographic proof on-chain to Bitcoin for verification. This increases throughput to thousands of transactions per second while still preserving the security of the Bitcoin network.
Bitlayer and BitVM technology
The Bitlayer platform has successfully implemented Bitcoin Rollups by leveraging BitVM + Rollup technology. This approach allows complex smart contracts to execute off-chain while still using Bitcoin to resolve disputes. Any invalid state can be challenged and verified directly on the Bitcoin chain, ensuring absolute safety.
Benefits and applications
Bitcoin Rollups offer many benefits:
High throughput: Processing thousands of transactions per second, suitable for DeFi, gaming, and micropayments.
Low fees: Reducing transaction costs for each user.
Security: Every rollup transaction is secured by the finality of Bitcoin.
This solution opens up many new use cases for Bitcoin, transforming it from a store of value into a platform for programmable financial applications, competing with other ecosystems like Ethereum.