Compiled by: Tia, Techub News
After nearly 10 years of ups and downs in the cryptocurrency industry, Bitlayer co-founder Charlie Hu has refocused on the Bitcoin ecosystem with his deep experience in top projects such as Ethereum and Polkadot. He and another co-founder of Bitlayer, Kevin He, have brought stronger programmability and verification capabilities to Bitcoin through the innovative Layer2 solution, Opvm. In this interview, Charlie shared in detail the reasons for switching from Polygon and Polkadot to Bitcoin, and explained how Bitlayer uses cutting-edge technologies such as ZK proofs and recursive verification to solve the limitations of Bitcoin smart contract functions. At the same time, this interview also explores the current technical competition landscape of Bitcoin Layer2 and explains the far-reaching impact of the OP_CAT proposal on the future of Bitcoin. Bitlayer's mission is to make Bitcoin no longer just "digital gold", but a mainstream platform in the field of DeFi and smart contracts.
Techub News: You have extensive experience in the Crypto industry and have participated in many top projects. What prompted you to switch from Polygon and Polkadot to Bitcoin and participate in the creation of Bitlayer?
Charlie: I have been in the Crypto industry for almost 10 years. I first came into contact with Bitcoin when I started a business in the Netherlands. At that time, I participated in Bitcoin Meetup events and gradually understood how it worked. At first, everyone was discussing Bitcoin as "digital gold". Later, I started to buy Bitcoin through OTC, which officially allowed me to enter the world of cryptocurrency.
What really made me decide to devote my career to this industry was attending Ethereum's Devcon in Berlin in 2015. At that time, Ethereum was still a project jointly promoted by the "founding three" - Charles Hoskinson, Gavin Wood and Vitalik Buterin. Later, Charles founded Cardano, and Gavin Wood led the development of Polkadot. At that time, I followed the Polkadot team and participated in a lot of work until the Polkadot project was officially established in 2017, and I became one of the first round of investors.
However, as the Ethereum and Polkadot ecosystems developed, I gradually discovered some problems in the Polkadot ecosystem, such as high costs and the gradual flow of developers to EVM-compatible systems. Therefore, in 2021, I made a bold decision: to exit Polkadot and Cosmos with all my positions, and finally choose Bitcoin as the new development direction.
Techub News: What attracted you to Bitlayer? How did the Bitcoin ecosystem attract your attention?
Charlie: Bitcoin is the largest blockchain asset with a market value of over $1 trillion, but a lot of data on its chain is "dormant" and cannot participate in large-scale commercial applications like Ethereum. I think this is a big potential of Bitcoin waiting to be tapped, especially in areas such as DeFi applications, smart contracts, and transaction verification.
The Bitcoin ecosystem is naturally anti-cyclical and anti-fragile, which has been verified in the past bull and bear markets. With the launch of the Bitcoin ETF in the United States, I think the next round of bull market is likely to be driven by these institutions, and the market value and usage scenarios of Bitcoin will be further expanded.
Techub News: How does Bitlayer’s BitVM (Bitcoin Virtual Machine) and Layer2 solution work specifically?
Charlie: The core of BitVM is to provide verification functions for Bitcoin. Bitcoin block space is expensive, and it is based on the UTXO model, which is very simple in design, but also lacks smart contract capabilities. Through BitVM, we hope to achieve functions similar to the Ethereum virtual machine through the existing Bitcoin scripting language without hard forking the Bitcoin mainnet.
Based on ZK proof technology, we use logic gate circuits to complete transaction verification, reducing the cost of executing complex logic on Bitcoin. In addition, we also use recursive proofs to re-settle transactions on Layer2 to the Bitcoin mainnet to ensure its security. This is a key step for Bitcoin to become a true smart contract platform in the future.
Based on the above technical foundation, we have also innovatively proposed the Opvm technology route. We will introduce the implementation path and technical advantages of this solution to the market in detail in the coming period of time.
Techub News: You mentioned the verification feature of Bitlayer technology. How is it different from other Layer2 solutions?
Charlie: Unlike other sidechain projects, Bitlayer is verified directly based on the Bitcoin mainnet, rather than relying on an external multi-signature sidechain solution. In the past, many testchain projects have attempted to implement smart contract functions on Bitcoin, but in fact, many of these projects have not really solved the problem of Bitcoin mainnet verification.
The biggest difference between us and other projects is that we focus on how to enable transaction verification to go directly back to the Bitcoin mainnet to ensure the highest level of security. Through Opvm, we hope to achieve an efficient and low-cost Bitcoin Layer2 solution that allows developers to develop on the Bitcoin network without sacrificing security.
Techub News: What new progress has Bitlayer made in globalization and ecological development?
Charlie: The Bitlayer team is very international, with members in Europe, the United States, India, Vietnam, and South Korea. We are currently developing well globally, especially in Asia and the Western markets. Bitlayer is also the first Bitcoin infrastructure project to receive strategic investment from Franklin Templeton, the US Bitcoin ETF issuer.
At the developer level, we have helped many projects land and grow in the Bitcoin ecosystem through a series of technical support and resource docking. For example, we have enabled multiple Defi and NFT projects by organizing developer activities to ensure that they can be successfully launched. In addition, we launched the Ready Player One developer airdrop incentive program to provide developers with financial, market, financing and other support to attract them to participate in the Bitlayer ecosystem construction and achieve a win-win situation.
In order to support ecological projects, we jointly launched the first and second phases of the First Mining Festival with multiple ecological projects to help them acquire users and provide users with more abundant Bitcoin ecological products. At present, the number of projects deployed in the Bitlayer ecosystem exceeds 280, among which the representative projects are Avalon Finance, Jasper Protocol, Pell Network, TrustIn, Enzo and Marcaron, all of which have achieved good development.
Techub News: What is the current competitive landscape of Layer2 in the Bitcoin ecosystem?
Charlie: In the past seven or eight months, the competitive landscape of Layer2 technology has changed a lot. Many projects have either stopped operating or transformed into other fields. There are currently three main solutions for Layer2 projects in the Bitcoin ecosystem: one is an EVM-based solution that aims to allow Ethereum developers to seamlessly transition to the Bitcoin ecosystem; the other is a Layer2 solution based on ZK and fraud proofs. There are also some projects that focus on specific application scenarios, such as Restaking and liquidity layers.
Bitlayer is unique in that we are not only making an EVM-compatible Layer2, we are also promoting the improvement of the security verification capabilities of the Bitcoin mainnet to ensure that all transactions on Layer2 can be safely settled on the Bitcoin mainnet. This makes our solution not only powerful in terms of functionality, but also has a greater advantage in security than other sidechain projects.
Techub News: You mentioned Bitcoin’s OP_CAT proposal. What impact does this have on the development of Bitlayer?
Charlie: OP_CAT is a proposal that has been discussed a lot in the Bitcoin community. It will bring more programmability to Bitcoin. If this proposal is passed, Bitcoin will have stronger smart contract capabilities and be able to run more complex applications directly on the mainnet.
We strongly support the OP_CAT proposal and are making technical preparations for it. Even if OP_CAT cannot be passed in the next year, our BitVM can still implement many functions through the existing scripting language. Our goal is to ensure that our technical route can adapt to any future changes in Bitcoin and keep the technology forward-looking.
Techub News: What is the difference between Bitcoin Layer2 ecosystem and Ethereum Layer2 ecosystem?
Charlie: There are several key differences between the Bitcoin and Ethereum ecosystems. First, Bitcoin does not have a centralized governance organization like Ethereum, such as the Ethereum Foundation. Bitcoin development is more decentralized, which also provides innovators with greater freedom.
Secondly, although our development environment is EVM-compatible, we are not simply copying the Ethereum ecosystem. The development focus in the Bitcoin ecosystem is around Bitcoin assets, especially in the areas of DeFi, smart contracts, and transaction verification. Bitcoin has a strong anti-cyclical and decentralized culture, which is very different from the governance structure and development path of the Ethereum ecosystem.
Techub News: What is your vision for the future development of the Bitcoin ecosystem?
Charlie: Through Bitlayer, we hope to make Bitcoin a truly programmable network, not just "digital gold". We are working with developers and communities around the world to promote the widespread use of smart contracts and Layer2 technologies on the Bitcoin mainnet. Through innovative Opvm solutions, we are committed to making Bitcoin a mainstream platform for the deployment and development of innovative track projects such as DeFi, NFT, and the recently popular DePin, AI, and RWA.
In the coming months, we will continue to release technical updates and work with more developer communities around the world to promote the prosperity of the Bitcoin ecosystem.
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