¶ Introduction
¶ The Genesis of BitcoinOS
Bitcoin, the first and most valued and trusted cryptocurrency, has long been a bedrock of digital asset security and reliability. While Bitcoin Core excels in security and decentralization, the protocol is limited in scalability. Bitcoin Script allows some level of programmability, but the functionality is restrictive. This changes with BitcoinOS, transforming bitcoin from a mere digital currency into a comprehensive operating system for decentralized applications, financial systems, and even governance systems capable of scaling to the entire world.
Over the last two years, Sovryn—a small but dedicated community of developers, entrepreneurs, and enthusiasts—has quietly built the largest and fastest growing ecosystem of bitcoin DeFi and smart contracts as a stepping stone to realizing the full potential of bitcoin.The plan Sovryn has followed consists of three simple but ambitious stages:
- Build the leading ecosystem of bitcoin-native DeFi tools
- Build a scalable protocol for trustless smart contracts on Bitcoin
- Build a world on Bitcoin
Sovryn has convincingly demonstrated Stage 1 and is now moving to Stage 2, facilitating the launch of BitcoinOS. Several key technologies are rapidly maturing to make a new, layered approach to scaling bitcoin not just possible but inevitable. Among these technologies are Taproot, Lightning, and Zero-knowledge rollups. BitcoinOS offers a solution to the scalability trilemma that has long plagued blockchain networks. It aims to extend the core functionalities of bitcoin, integrating the principles of scalability, interoperability, and programmability that are crucial for the widespread adoption of a bitcoin standard in money, finance, and governance.
¶ Bitcoin as an Operating System
Bitcoin itself can be conceived as an operating system. It has a consensus mechanism—a combination of technological processes and economic incentives—ensuring that participants follow the rules of bitcoin and agree on the state of the blockchain. This consensus creates a system of rules that cannot be arbitrarily changed—rules without rulers. These rules form the basis for securing property rights, and these rights secure BTC the asset on the blockchain.
Consensus and BTC are the products of the bitcoin protocol. They serve as powerful tools for money and finance. However, bitcoin has a very restricted, single-purpose rule set that limits the use of BTC as an asset and the consensus mechanism as a system of rules without rulers. Unfortunately, these limitations are driving potential users back into the hands of middlemen and into far less secure, less censorship-resistant crypto systems.
¶ Unleashing Bitcoin
¶ The Need for Scalability
The reality is that bitcoin itself is not able to provide a worldwide, low-fee payment system apart from scaling. In fact, the very first comment in response to Satoshi Nakamoto’s publication of the bitcoin whitepaper was: “We very, very much need such a system, but the way I understand your proposal, it does not seem to scale to the required size.”
Furthermore, the technology of decentralized finance (DeFi)—whether on bitcoin or another chain—has not delivered the ability to scale web applications to a decentralized environment. In many cases centralized entities or processes remain part of the overall system, creating choke points for manipulation and control. DeFi has not yet delivered an overall censorship-resistant enforcement of rules.
Scalability could usher in a regime of flexible and inexpensive transactions that would solve a number of problem:
- Small payments and micropayments would be feasible and could conceivably undercut the cost of centralized payment services.
- Developers could be assured that transactions would execute because the chain guarantees reliable, correct execution due to the ability to scale horizontally.
¶ The Need for Interoperability
The ability to launch compatible chains or execution environment modules would serve as the backbone for a host of new capabilities:
- Chains that communicate with one another and share data and cryptographic verifiability as well as the same native asset would achieve a whole new level of composability.
- Shared gas markets and bridges would allow developers to focus on their application rather than infrastructure, leading to faster, better, and more development.
- Interoperability would attract more cryptographically verifiable data on-chain and make it more broadly available, allowing users to build cross-platform reputations and therefore richer user opportunities.
- Users would have no risk of losing access to their data because it exists on the underlying infrastructure.
- Projects would consolidate in one ecosystem based on bitcoin security rather than diluting their security budget across many chains or thinning out their validator set. It would also deepen liquidity.
¶ The Need for Programmability
Bitcoin has a narrow set of use cases now because of the deliberately cautious limitations of its scripting language. Programmability on another layer would allow the pristine digital asset of bitcoin to be coupled with a massive variety of applications—without modifying or endangering the base layer in any way. In fact, this programmability could extend beyond financial applications to a myriad of social and governance processes.
- Programmability would allow for Turing-complete environments to run applications such as EVM-compatible smart contracts, but special-purpose environments could also be launched that do one specific thing well and efficiently.
- An explosion of new applications would be enabled by coupling high composability and easy communication across application environments with a common currency.
- Users who want on-chain applications but without the risk of holding less secure altcoins could have a full array of options with bitcoin. In fact, there is every reason to believe that bitcoin would be the ecosystem of choice for users wanting security and censorship-resistance.
¶ Inadequate Solutions
Many attempts have been made during the lifetime of bitcoin to expand its expressiveness without endangering its core function as a monetary system. Three efforts in particular have garnered a great deal of effort and attention:
- Sidechains (Liquid, Rootstock, Stacks, etc.)
- Lightning Network
- CSV or Client-side Verified Protocols (Ordinals, Taproot Assets, RGB BRC-20, Runes)
As the table shows, all of these approaches have one or more fatal limitations that prevent them from bringing the full spectrum of needed improvements to bitcoin. Despite this, every serious effort in this direction has been a learning experience that has advanced us toward BitcoinOS. In fact, some of the ideas may still find a home within the BitcoinOS ecosystem.
¶ Rollup Technologies: the Way Forward
¶ New Cryptographic Techniques
A number of technologies for modularizing blockchains are now available to us. These techniques include validity, ZK, and fraud proofs, which we collectively label “Rollup technologies.” Rollups perform transactions off-chain and then bundle them or “roll them” up together, compressing the amount of transaction space that they require. Aggregated in this way, they are written to bitcoin as a single transaction. As bitcoin transactions, these transactions benefit from the same bitcoin-level security as standard bitcoin transactions.
As part of BitcoinOS, bitcoin rollups have three interesting properties. First, because they are Turing complete they can use any programming language or virtual machine (VM) to create any rule. Second, the transactions occur off-chain and are therefore scalable far beyond current bitcoin transactions. Finally, each transaction pays for and directly benefits from bitcoin security. Each transaction becomes part of a bitcoin transaction and therefore is secured like any other bitcoin transaction. Rollup transactions pay fees to the bitcoin miners, increasing Bitcoin's overall security budget.
¶ Solving a Trilemma
Any single rollup can have only one VM and is limited in scalability. Further, a naive construction of bitcoin rollups would leave them without interoperability. Even worse, they would not have the ability to transact natively with BTC. BitcoinOS is a framework that solves this trilemma:
- Near-trustless BTC bridging without a soft fork
- Providing interoperability and scalability
- Achieving 100% of bitcoin security
BitcoinOS is a modular system where users can opt in to the services they desire, use them with near-trustless bitcoin security, and maintain interoperability and composability among all services. Modularity allows rollup developers to achieve far more than is possible with single rollups and to do so with far less effort. The entire network benefits from the efficiencies of shared services, including sequencing, transaction compression, and near-trustlessly bridged BTC.
¶ Layered, Modular Architecture
¶ Layers
BitcoinOS is designed in layers of functionality, as shown below.
¶ Bitcoin Core
Bitcoin Core serves as the base layer. By building strategically on top of this layer, BitcoinOS inherits valuable properties of the base layer without requiring any changes in the base layer that could inadvertently create vulnerabilities. Bitcoin Core as base layer ensures that every transaction on the network is ultimately recorded in an immutable and transparent manner, providing a solid foundation for the integrity and trustworthiness of the entire BitcoinOS ecosystem. This layer acts as the ultimate source of truth, offering users confidence in the robustness of the system.
¶ Execution Layer
The Execution Layer encompasses the compression, aggregation and settlement of transactions from the compute layer. Rollups comprise the compute layer, which is built on top of the execution layer. This structure provides interoperability among rollups. The execution layer batches, aggregates, and compresses transactions, providing for higher scalability, transaction throughput, and reduced per-transaction costs.
Because the execution layer batches together transaction proofs from multiple rollups, it further compresses (and therefore scales) transactions. These batched transactions are proven at the execution layer and then stored in the bitcoin blockchain. Thus, the individual transactions ultimately become bitcoin transactions, which have purchased bitcoin proof-of-work security assurances.
The execution layer is also the nexus that ties the rollups together into a single interoperable and composable system. Each rollup is represented as a smart contract on the execution layer. When a user performs a transaction, it is performed with the smart contract representing that rollup on the execution layer. That rollup smart contract can interact with any other rollup smart contract because they are on the same layer.
Finally, the execution layer solves a crucial challenge of the trilemma—the ability to trustlessly and natively use BTC throughout the system, both as a native currency and as a reserve asset. This has not been possible before, but the breakthroughs required to make this possible are finally here.
¶ Compute Layer
The Compute Layer is the collection of interoperable rollups that are supported by BitcoinOS. We call these Execution Environment Modules (EEMs). This modular architecture will provide developers with a choice of execution environments where they can develop services. These execution environments could be EVM like Ethereum or Rust-like similar to Solana. They could be specific execution environments optimized for functions like privacy or speed. Rollups can be created for specific applications (rolldapps) optimized for gaming, exchange, or specific use cases like cheap stablecoin transactions.
Composability and interoperability allows developers to employ polyglot or multi-language architecture in which developers use multiple programming languages and technologies simultaneously. Users can mix and match functionalities, allowing the entire ecosystem to benefit from local optimizations. For example, a user may hold their BTC and other assets in a privacy-focused execution environment. From there they can transact with an exchange built on a standard, unshielded EVM. In this way they gain the benefits of both and are able to shield their transaction activity and maintain financial privacy.
¶ Security Benefits
This structure represents a significant advance over the crypto world of today, with all of its different Layer 1s. The fragmented expanse of multiple crypto platforms introduces dependencies and middlemen. We see these dependencies and middlemen in the form of trusted bridges, and they have amply demonstrated how poorly they deserve the label “trusted”. With so many hacks and exploits in the DeFi world, the implementation of interoperability and composability brings benefits beyond the user's utility and convenience. It also improves security and reduces middlemen. Even more fundamentally, the proliferation of crypto platforms and Layer 1s has led to a large number of systems with deficient consensus methods and security. The near-impossibility of building PoW consensus that approaches Bitcoin’s security and hashpower has led to an adoption of questionable PoS and DPoS systems. The interoperability and composability of BitcoinOS provides an opportunity to build anything and everything on bitcoin, without having to sacrifice security.
¶ Near-Trustless BTC Bridge
Sidechains today rely on federations, either collateralized (e.g. sBTC) or uncollateralized, (e.g. PoWPeg), to bridge BTC between bitcoin mainchain and the sidechain. These federations rely for their security on an honest majority assumption. However, the majority is subject to the temptation to censor or perhaps even redistribute the value of the minority. Therefore, to achieve near-trustless BTC transfers we require a channel that can be created without the need for an honest majority.
A system that maintains its integrity and security with any number of honest participants is near-trustless, since even a single honest participant protects the system. The security assumption of at least one honest participant is called an honest singleton system. No matter how large the number of participants (N) grows, only one honest participant among a third-party permissioned set can maintain system integrity in such a system.
BitcoinOS is designed to use honest singleton near-trustless BTC channels. With rollups, BitcoinOS makes this possible by propagating transaction vaiidity proofs to the rollup network and optionally embedding them into bitcoin mainchain. With the availability of these proofs, it becomes possible for a single participant to prove false or equivocating transactions and block them from occurring. With BitVM or an optimized branching taproot tree we will construct these fraud-proof channels. With the later addition of Witness Encryption, honest singletons will also be able to force inclusion of correct transactions.
Crucially, this functionality is achievable without any changes to Bitcoin Core. The innovation here can be achieved completely permissionlessly. Through BitcoinOS, bitcoin will become a truly permissionless system for both users and developers.
¶ Building BitcoinOS
¶ A Public Good
BitcoinOS is a project for the entire bitcoin community and indeed the world. We envision BitcoinOS as a public good. Like bitcoin itself, BitcoinOS is designed to be a tool shared by all, even and perhaps especially by adversaries who have little else in common. Therefore, BitcoinOS can be expected to be a far larger project than simply a Sovryn project, calling for efforts from developers and teams from throughout the bitcoin world. Furthermore, it will result in a tool that serves not just the Sovryn community but a multitude of different communities and projects.
¶ The Role of Sovryn
Since its launch, Sovryn has been on a journey to create a more scalable, interoperable, and programmable framework for bitcoin. This has culminated in the concept of BitcoinOS.
Sovryn's approach to facilitating the development of BitcoinOS is deeply rooted in community-driven principles. The collaborative efforts within the Sovryn community have been instrumental in shaping BitcoinOS. This collective approach ensures that BitcoinOS is not just a technical marvel but also a platform that resonates with the needs and aspirations of its users. Since BitcoinOS itself will be a public good, our community-driven and collaborative approach will facilitate the involvement of many teams working together. It is this synergy between innovation and community engagement that positions BitcoinOS as a forerunner in the bitcoin rules-without-rulers revolution.
The Sovryn community will continue to play a leading role in bringing BitcoinOS to reality, kickstarting its development, building a dev community, and incubating a growing ecosystem of services and users.
¶ Sovryn Next Steps
The first user-facing component of BitcoinOS to launch will be an EVM-compatible execution environment. The existing suite of DeFi and related products that exist in the Sovryn ecosystem will be among the first things made available. Improvements in transaction performance relative to sidechains will also make applications like perpetual markets and futures markets possible.
We expect that one of the next important rollups developed by Sovryn will be a data security rollup. This will provide users with that ability to benefit from financial privacy and shielded transactions, while making use of any of BitcoinOS’s systems.
¶ SOV Token
The SOV token is the governance token of Sovryn modules and jurisdictions in the BitcoinOS ecosystem. As a keystone of decentralized governance, SOV empowers its holders with voting rights, enabling them to steer the course of Sovryn modules and thus exert an influence over the overall ecosystem’s development and protocols. This participatory governance extends to overseeing updates, managing resource allocation, and influencing strategic decisions. Note that SOV is not the governance token of the entire BitcoinOS ecosystem but of the Sovryn modules/rollups/jurisdictions within the ecosystem.
¶ A Canonical SOV token
Sovryn launched its development on Rootstock, which we considered the best platform available at the time. We recognized that significant improvements in many aspects of the platform were required. Either we would be able to evolve Rootstock or we would need to develop a platform that could evolve beyond it. In any event, we believed (correctly as it turned out) that rollup technology would be the key to developing the type of platform that can create BitcoinOS.
Launching on Rootstock meant that the alpha iteration of SOV was launched on Rootstock as well. The first and most basic task of a blockchain is to act as a secure, decentralized, and— above all—canonical ledger of assets and asset events. Thus, a new blockchain environment will necessitate an issuance of SOV canonically with the launch of Sovryn’s BitcoinOS environment.
¶ SOV Stakers
Sovryn Bitocracy is a Proof-of-Staked-Time (PoST) system. Stakeholder weight is thus measured in voting power (VP). Therefore, the issuance of SOV must respect the VP distribution. The simplest way to accomplish this is to issue SOV at one-to-one parity to Bitocracy VP.
¶ Conclusion
¶ Building Toward a New Era in Bitcoin
BitcoinOS represents much more than just a technological advancement; it embodies a visionary step towards the future application of rules without rulers. BitcoinOS, with its robust combination of bitcoin security and innovative scalability and interoperability solutions, provides an avenue to revolutionize not only money and finance but many aspects of the digital world.
¶ A Call to Action for the Developer Community
As we look forward, the BitcoinOS vision is as an open invitation to the community of developers and projects that share our vision of a scalable, programmable, interoperable, public-good ecosystem built on bitcoin. It calls for collaboration, innovation, and participation in shaping this new era. Developers are encouraged to help us build this from the ground up. Projects are encouraged to leverage the platform's modular architecture and robust security to build groundbreaking applications. Users and enthusiasts are invited to engage with the platform, contribute to its governance, and help steer the course of its evolution.