Cardano will become a smart contract layer for Bitcoin, thanks to its UTXO model and ZK Proof technology.

Cardano and Bitcoin, an unexpected link

Cardano is set to become the premier blockchain to connect Bitcoiners to DeFi and other web3 applications. Indeed, Cardano recently officially announced the development of tools to be able to use its Bitcoin to interact with the Cardano blockchain.

As a reminder, Cardano uses a UTXO model like Bitcoin and is one of the only blockchains to be truly decentralized. On paper, Cardano is therefore the best blockchain to host the $1.3 trillion in liquidity contained in the parent crypto. Developed by BitcoinOS, the news has made Cardano’s founder more than enthusiastic about the future of blockchain:

“They figured out how to integrate using taproot into the Bitcoin blockchain a capability to install Zk Proof. What that does is it actually gives the brain an eye to Bitcoin. That means you can now connect Bitcoin with confidence to other ecosystems so that whole hybrid application model opens up.”

There's $1.3 trillion worth of Bitcoin, there's over a hundred million users, it's one of the largest markets in the world. Cardano is the native touchpoint, because we're both utxo systems, it's extremely easy to connect these two systems and develop these two systems.

This basically means you get a DeFi experience for the first time with Bitcoin so all Cardano NFT projects can be bought with Bitcoin and all DEXs, all DeFi applications.”

Using Zk Proof technology, it will be possible to sign Bitcoin transactions with the ADA token as a means of payment for gas fees, as Charles Hoskinson reveals. Bitcoin has many L2s, including Stacks with its Nakamoto update, which are developing, but it will be interesting to follow this prodigious advancement of Cardano.

At the same time, Charles announced that he wants to integrate a Nintendo emulator on Cardano thanks to Hydra. In short, Hydra aims to increase the throughput of transactions on Cardano thanks to off-chain “mini-ledgers”, called Hydra Heads. This therefore reduces validation time and increases scalability.

According to a BitcoinOS member, “Cardano is by far the largest and most important chain built as a UTXO system (like#Bitcoinand with a long-term view on the world (like Bitcoin).”

A marriage that can last?

It is important to remember that Charles Hoskinson has stated several times that Cardano would one day surpass Bitcoin. He indicated that there was a lack of an ecosystem on Bitcoin, a community and a vision around the asset.

This is what several users on X tried to remind us, to which Charles responded:

“I’ve always loved Bitcoin, but not the Maxis who decided to move there. It was personal to me. I almost cried when I heard that. I didn’t believe it when I first saw it.”

However, Hoskinson seems excited to welcome Bitcoin to Cardano, saying that he “has always loved Bitcoin as a blockchain.”

The key point is that thanks to the UTXO model, Cardano becomes a smart contract development layer for Bitcoin. They are therefore closer to a Layer 2 Bitcoin than a connection project like Zeus, which connects Solana and Bitcoin thanks to a smart contract and a zBTC token.

“Whether your Bitcoin stays at home or goes to visit other chains, it has no impact on the Bitcoin network. With BOS, they can now interact with other ledgers. Only with cardano will you be able to do this natively with UTXO and soon pay your transaction fees in Bitcoin. This means that Bitcoin now has a smart contract layer,” Charles adds.

According to Charles, “Bitcoin developers can build Cardano/Bitcoin hybrid applications in Aiken and pay their transaction fees in bitcoin. He adds that “DeFi is coming to Bitcoin, and it will dwarf everything Solana and Ethereum have done.”

Aiken is a smart contract development platform on Cardano.