Background

The Limitations of the Bitcoin Ecosystem

Bitcoin introduced a decentralized, secure digital currency and network, laying the foundation for numerous decentralized applications. However, many of these applications operate outside Bitcoin due to limitations within its structure.

Bitcoin uses the UTXO model, where each UTXO acts as a digital "coin." To spend a UTXO, code in Bitcoin’s Script language is required, which is designed to be Turing incomplete to ensure security. This restricts programmability, limiting Bitcoin's ability to support complex applications directly on its network.

Layer 2 solutions like zkBTC aim to overcome these limitations. By leveraging Zero-Knowledge Proof (ZKP) technology, zkBTC introduces programmability and interoperability to Bitcoin, enabling advanced applications such as smart contracts and financial services without compromising security. This approach opens new possibilities for Bitcoin’s utility within its own ecosystem.