Native Bitcoin integration on ICP has enabled developers around the world to unlock new possibilities, from using Ordinals as collateral to allowing Satoshis to be sent via chat messages - BTC <> ICP integration has helped activate the Bitcoin economy.
This blog post collects insights from the special edition of Chugga Chugga Bitcoin and explores how 11 different dapps built on this native integration are powering the Bitcoin economy, but first, let’s look at how ICP’s vision for Bitcoin integration is coming to fruition.
How Bitcoin Integration Will Work in 2022
In line with the ethos of decentralization, the Internet Computer (ICP) lays the technical foundation for hosting software and systems that interact with the Internet in a fully decentralized manner.
The special edition nicely shows how this idea could become a reality: “If we want to host smart contracts that serve the world and the internet, the first step is conversation — being able to read and write to the Bitcoin blockchain is the first big leap in ICP interoperability.”
In 2022, ICP launched Bitcoin integration, allowing ICP nodes to read the Bitcoin UTXO set and implement ECDSA to enable direct signing of Bitcoin transactions.
On Chugga Chugga Bitcoin’s Bitcoin integration, which will go live in 2022: “We mentioned that the Bitcoin integration was going to go live in 2022 and everybody was taken aback because it was really not a popular idea at the time, people weren’t that interested in building on Bitcoin, but our integration went live — and the timing was perfect because that’s when everyone had an aha moment, and now, that’s brought us to where we are now.”
Why ICP is the best choice for Bitcoin: Projects to activate the Bitcoin economy
It’s been over two years since Bitcoin integration was launched, and the opportunity to build on top of Bitcoin has opened the door for decentralized applications to integrate directly with the BTC network at the protocol level.
This opens up new possibilities - from exchanging BTC and ETH using a version of the chain key on a decentralized exchange (DEX), to being able to make Bitcoin microtransactions with extremely low transaction fees, some great use cases are being built across various verticals using this stack, and we cover some examples here.
Mining - Loka Mining
Bitcoin mining has changed dramatically over the years, said Andy from Loka Mining: “Back in 2014, you could mine on your laptop or basic computer, now it’s a massive industry and increasingly centralized, with the two largest mining pools amassing more than 50% of the total global hashrate.”
Loka Mining is a meta-layer with a Bitcoin-native yield protocol built on ICP that provides a trust-minimized approach for Bitcoin miners, unlocking key benefits for Bitcoin holders, miners, and investors.
For Bitcoin holders, Loka Mining allows them to leverage their BTC to gain native benefits from the Bitcoin mining economy, and secondly, for Bitcoin miners, Loka provides the opportunity to sell their future mining rewards.
For investors, it offers the opportunity to buy Bitcoin at below market prices. By participating in the Loka Mining ecosystem, investors can buy Bitcoin at a discount thanks to the ability to receive future mining rewards at a lower price.
BTC Staking and Runes - Omnity
Omnity (rebranded from Octopus) is leveraging Bitcoin native integration ICP to add token functionality to its existing infrastructure, with Louis from Omnity saying: “Bitcoin native integration supports BTC itself, and with a ton of new assets coming out, we built a new tensor as an on-chain indexer for all sorts of new tokens, first runes, then BRC20 tokens and others.”
In addition, Omnity also introduces a new BTC staking method using BTC native integration and will ensure the security of Bitcoin Layer 2 and sidechains. After conversion to ckBTC, the assets will be securely locked in a staking container that can destroy or cut BTC in the event of malicious activity.
Operators willing to run nodes will be assigned voting rights, and if any dishonest activity is detected by the operator, the protocol will destroy or lock part of the ckBTC to ensure the integrity and security of the network.
SocialFi - Catalyze One
Catalyze One is a SocialFi app that focuses on building communities and fostering interactions within them. The platform allows users to tip each other, pay for services, and support various projects.
Here’s what Ray Laracuenta of Catalyze One had to say about what the project is doing in the space and how they will use ckBTC and native integrations:
“When you build a community, you have to hire developers, graphic designers, and build a whole support ecosystem for your platform, and they come from all walks of life, they want to be paid in different currencies, they want to be invoiced in different currencies, and we are looking at Bitcoin and ckBTC as a way to provide an economy for these communities.”
Catalyze is also developing a Nostr relay called Replicator with support from the DFINITY grant team to solve scaling and discoverability challenges by leveraging the Internet Computer (IC). This integration will enable users to run a Nostr relay that connects different ecosystems and supports all Nostr clients.
DeFi - Helix Markets
Helix Markets is a new order book DEX built on ICP that strives to provide the best experience of centralized and decentralized exchanges, namely the simplicity and ease of use of centralized exchanges and the ability for users to have full control over their assets.
Helix Markets aims to create a seamless multi-chain trading experience, leveraging IC’s infrastructure to achieve this.
Here’s what Gorazd said about why he built a DEX with native integration capabilities on IC:
“With Chain Fusion, we enable lightweight and fast transactions without using any chain bridges or middleware - all transactions, on-chain interactions are conducted through container smart contracts on IC, and all transaction, blockchain and gas complexities are handled by our smart contracts - so users don’t need to worry about complex onboarding, managing browser wallets, etc., and we have reverse gas, which is one of the most underrated aspects of IC, and it provides a very good way to build great UI and UX without having to worry about gas handling, because gas handling is done by the container smart contract itself.”
Ordinals - Bioniq
With this integration, developers can burn Ordinals without any managed bridge, with 1.5 second finality and negligible fees, and most importantly, it provides an infrastructure for any developer to build secure applications instantly.
Bioniq is a marketplace that uses Bitcoin as a second layer to sell, trade, and transfer Bitcoin Ordinals and Inscriptions without paying gas fees and in less than two seconds.
“When you interact with Ordinals on our marketplace, they are packaged Ordinals – so when you trade on our marketplace, you get benefits like easier and faster transactions with virtually no fees,” said Max Ogles of Bioniq.
Bioniq has also recently launched Dynamic Ordinals, adding an exciting dimension to the overall experience, with Dynamic Ordinals, users can participate in the game to upgrade their recently launched Motoko Sentinels, in addition, Bioniq also plans to integrate Bitcoin Runes into its ecosystem.
What's next?
The ICP program is far from complete.
“Threshold Schnorr is the next part of our Bitcoin integration and Chain Fusion technology, allowing for the signing of tSchnorr transactions, which is another signature scheme that enables complex operations introduced by the Taproot update, such as writing ordinals more efficiently and allowing transactions or some type of signature scheme, these additional features in Bitcoin mean that smart contracts will be able to perform such operations in a decentralized manner, and you know what that means - it brings programmability and all the operations of DeFi to Bitcoin.”
We also spoke with leaders of the Chain Key X, NFID Vaults, Tyron.io, and CB Index Finance projects to get their unique insights into the space as a whole and how Bitcoin integration can help build their products.
Check out the full conversation on YouTube channel Chugga Chugga Bitcoin!
learn more
Bitcoin Integration:
internetcomputer.org/bitcoin-integration
How ICP's Bitcoin Integration Protects Private Keys
Why Bitcoin needs smart contracts
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