The Internet Computer (ICP/USD), the world’s first internet-scale public blockchain, has brought smart contracts functionality to Bitcoin (BTC/USD) thanks to its mainnet integration with the world’s largest cryptocurrency by market cap. Unlike platforms like Ethereum, Bitcoin does not natively support smart contracts.
According to the DFINITY Foundation, the company helping to develop the internet computer blockchain, it is now possible to conduct native smart contract-enabled transactions on Bitcoin.
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The internet computer will serve as Layer 2 of Bitcoin, allowing users to hold, send and receive BTC natively without having to use blockchain bridges or third-party solutions.
It’s a game changer for Bitcoin
A press release shared with Invezz on Friday states that the mainnet integration adds a trusted foundation that DeFi and Web3 applications can fall back on when they want to encode Bitcoin.
It’s a game-changer for Bitcoin, Manu Drijvers, director of engineering at the DFINITY Foundation, said in a statement.
“Blockchains are like walled gardens that are unable to interact with each other. When it comes to Bitcoin, applications like DeFi applications that could benefit most from interacting with the world’s largest cryptocurrency are unable to do so. The integration of the internet computer with Bitcoin is a real game changer for the industry as it finally brings smart contract functionality to Bitcoin and enables a whole new landscape of DeFi and Dapp development never before possible with BTC.”
Potential activities that the revolutionary functionality will bring to Bitcoin include yield farming, lending, and payments. The integration therefore eliminates the need for bridged or wrapped Bitcoin to allow users to participate in decentralized ecosystems such as DeFi, GameFi, SocialFi, and NFTs.
Even at a time when hacks and other breaches are targeting DeFi protocols, the integration of the internet computer with Bitcoin provides another layer of security via the ECDSA (Elliptic Curve Digital Signature Algorithm) implementation. This means applications not only run on a resilient network, but also help unleash unmatched liquidity.
The Internet computer allows for fast transactions and low fees, with transactions only being processed on the Bitcoin blockchain when required.
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