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What people get wrong about Bitcoin and smart contracts

There is a fundamental misunderstanding about the power of Bitcoin SV and its ability to do smart contracts, says Mihael Šinkec, Software Developer at sCrypt.

There is a fundamental misunderstanding about the power of Bitcoin SV and its ability to do smart contracts, says Mihael Šinkec, Software Developer at sCrypt.

sCrypt is a high-level smart contract language for Bitcoin SV. Bitcoin supports smart contracts with its Forth-like stack-based Script language, but writing smart contracts in native Script is cumbersome and error-prone. sCrypt aims to address this and is designed to facilitate writing complex smart contracts running on-chain.

‘Most of the crypto industry have this misconception that Bitcoin couldn’t ever do smart contracts (at scale). My goal is to demonstrate that you can do smart contracts on the original Bitcoin protocol as it was proposed on day one by Satoshi,’ said Šinkec.

He added that this misconception has been perpetuated by other protocols which cannot do smart contracts effectively after they deviated from Satoshi’s Vision.

‘Bitcoin Cash and BTC in their history have had the lockdown of their scripting language and introduced other opcodes and made the system as a whole so that you cannot do arbitrary smart contracts on their chains anymore.’

He added that Bitcoin SV could offer smart contracts from day one, without needing to change the original protocol and with no additional software required. Šinkec said these capabilities are specifically highlighted in Satoshi’s white paper.

‘As a system creator, you don’t know what your users will be doing with the system in the future. What you can do is give them a really expressive tool such as a scripting language that they can build their programmes in the future.’

Instantaneous and cost-effective

Šinkec said the Bitcoin SV blockchain also stands out from other protocols due to how cost-effective and quick its transactions are, all while offering a more stable protocol.

He added that other protocols which have deviated from Satoshi’s original vision are unable to scale effectively, meaning a single smart contract can cost hundreds of dollars for a single contract when their network comes under strain.

‘On Bitcoin SV you can do this for fractions of a cent so it only makes sense in the long term for companies to follow these incentives.’

‘Our main goal at sCrypt is to make the development of Bitcoin easier. I would encourage people from other chains and from within Bitcoin to try it out, try and publish a contract and give us feedback and tell us where you struggled so that we can improve on that and make it easier for others.’

Smart Contracts on Bitcoin

Smart contracts are one of the key components of Bitcoin SV and utilising Bitcoin’s unbounded scripting capabilities it’s even possible to code Turing Complete smart contracts, on chain. These digital contracts are trustless, autonomous, decentralised, and transparent — and are usually irreversible and unmodifiable once deployed.

Smart contracts on Bitcoin have many advantages including reducing — or even removing — the need for intermediaries and contract enforcement in an agreement or transaction. This is because, with a smart contract, the code defines the mechanisms of the transaction and is the final arbiter of the terms.

This allows Bitcoin SV-based smart contracts to be both legally enforceable and scalable, two properties that aren’t found on many other chains including Ethereum where all smart contracts are executed by everyone in ‘one global computer’.

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