Bitcoin's Focus on Simple Validation Instead of Complex Execution

Summary:
In the crypto world, Bitcoin is uniquely designed to favor straightforward validation processes over intricate on-chain executions. This choice reduces resource demands, maintains decentralization, and lowers systemic risk, even if it requires moving complex logic and heavy computations to higher layers or external systems.

Key Takeaways

Bitcoin prioritizes simple, deterministic validation over complex execution to maintain decentralized security.
The introduction of BitVM2 aims to make dispute resolution affordable, using optimistic verification via garbled circuits.
Public companies are increasingly accumulating Bitcoin, holding 1.09 million BTC, with significant purchases from MicroStrategy and Metaplanet.

Bitcoin

How Bitcoin Is Engineered to Avoid Complex State Transitions

Bitcoin’s primary limitation lies in its inability to conduct extensive verification processes affordably, a challenge that all BitVM-based bridges must consider. As highlighted in a post by the GOAT Network on X, to tackle these concerns, they are rolling out a BitVM2 design to ensure that disputes remain cost-effective under real-world fee scenarios. The security is reinforced through optimistic verification implemented with garbled circuits (GC).

This upcoming operator will publish garbled-circuit artifacts off-chain while only committing the pertinent labels on-chain. If the computation checks out, no further on-chain action is necessary. However, if discrepancies arise, the challenging party won't need to perform a costly computation on-chain again. Instead, they will create a minimal fraud-proof that exposes the “0” label, contradicting the operator's claimed outcome. Consequently, the focus shifts to showcasing a contradiction on-chain, thereby lowering dispute costs and altering security economics.

An important aspect of BitVM configurations is the size of the garbled circuit. When combined with extensive verification, these circuits can become overly large. To counter this, BitVM2 employs a designated-verifier SNARK, reducing the complexity for verifiers and ensuring that garbled circuits stay within practical size limits. For users, this means that more affordable and reliable paths for dispute resolution will prevent delays during times of heightened transaction fees.

Public Companies Are Among Bitcoin’s Most Aggressive Buyers

While various initiatives aim to enhance Bitcoin’s efficiency, crypto expert Lark Davis, founder of Wealth Mastery Newspaper, has pointed out that numerous public companies are aggressively acquiring Bitcoin. Currently, these companies hold a total of 1.09 million BTC, which accounts for 5.1% of the overall supply—an all-time high.

Notably, recent large-scale purchases include 1,200 BTC from MicroStrategy, which now boasts a total of 672,000 BTC. Another major player, the Asia-based firm Metaplanet, added 4,200 BTC to its holdings, increasing its total to 35,000 BTC.

Bitcoin Chart
Institutions are accumulating BTC | Source: Chart from Lark Davis on X

Davis also noted recent acquisitions by companies like Cango Inc., Bitdeer Technologies, and Anap Holdings. Even as retail investor sentiment appears to weaken, public companies and institutional investors are continuing to accumulate Bitcoin amid fluctuating market conditions.

BTC Trading Chart
BTC is trading at $88,898 on the daily chart | Source: BTCUSDT on Tradingview.com