Original title: (Starting from Thunderbolt, Re-examining the Design Logic of the Bitcoin Lightning Network)
Original author: Ac-Core, YBB Capital Researcher
I. Why Can't Bitcoin Buy Coffee?
When mentioning Bitcoin, most people first think of its attributes of 'decentralization' and 'immutability'. However, when you actually want to use it to buy a cup of coffee, you will quickly encounter an awkward problem: waiting for transaction confirmation takes longer than waiting for the coffee, and sometimes the transaction fee is even more expensive than the coffee itself. Assets on Bitcoin are still 'as immovable as a mountain'—mainly relying on HODL, unable to be lent, combined, or interoperate.
The script structure of Bitcoin Script is extremely conservative, limiting most off-chain interaction scenarios. It was not designed to handle thousands of payments per second. However, the reality is that people want Bitcoin to be usable, even if it's just to buy a game skin or give a tip while watching a video, without waiting for ten minutes.
II. Lightning Network: A Double-Edged Sword
Source: Cointelegraph
The Bitcoin main chain is like a highway, while the Lightning Network is akin to a toll fast lane built alongside it. Its core concept stems from a compromise on main chain transaction efficiency: since there is a speed bottleneck in on-chain transactions, the focus is no longer on recording every transaction on-chain, but rather on establishing dedicated 'payment channels' between users for high-frequency bookkeeping, ultimately syncing the state of funds only when the channel is closed. This model is similar to friends settling up after alternating who treats for meals each week—people do not immediately transfer money to the bank after every meal, but rather settle accounts in one go after accumulating several meals. The Lightning Network is essentially a transaction network woven together by thousands of such payment channels.
However, this seemingly ingenious system exposes multiple dilemmas in practical applications. First is the high threshold for channel construction; users must pre-lock funds to establish a trading channel, which means that to trade with any party, a dedicated channel connection must be established in advance. Second is the complex routing problem; when user A and B lack a direct connection, even if there is an indirect path A-C-B, if the intermediate channel lacks funds or the nodes along the path are unavailable, the transaction will still fail. More severely, there are security risks; the system requires users to remain online to prevent the counterparty from submitting expired transactions for fraud when the channel is closed, which imposes unrealistic operational demands on ordinary users' devices.
Despite the Lightning Network being operational for many years, these structural flaws have prevented its practical application from breaking through bottlenecks. Public data shows that the total locked amount in the entire Lightning Network currently only maintains around 100 million USD, which is nearly marginalized in relation to the trillion-dollar valuation of the Bitcoin system. This raises deep industry reflections: can we build a more complete off-chain payment protocol to break through the existing predicament?
According to Chain Catcher news on April 15, HSBC disclosed in an official news release that Bitcoin Thunderbolt is the most milestone technical upgrade for Bitcoin in the past decade. The overall observation of Thunderbolt resembles 'Lightning Network 2.0', but it is not just an upgrade; it is more like a reconstruction of the off-chain Bitcoin interaction paradigm.
III. What is the Thunderbolt Protocol
Source: Nubit | Bitcoin Thunderbolt
Bitcoin Thunderbolt is a soft fork upgrade method based on the Bitcoin base layer. It does not rely on second-layer networks or cross-chain bridge compromises, but instead modifies the protocol level of the Bitcoin main chain, fundamentally enhancing Bitcoin's scalability, transaction performance, and programmability.
From a performance perspective, Nubit, using UTXO (Unspent Transaction Output) Bundling technology, has achieved significant optimization of the traditional Bitcoin transaction processing model. The traditional Bitcoin network, due to its single UTXO model, has clear limitations on transaction speed and throughput. UTXO Bundling allows multiple UTXOs to be aggregated for processing, effectively compressing the transaction data volume, thus enhancing transaction speed by about 10 times without sacrificing security.
In terms of programmability, Bitcoin Thunderbolt reintroduces and expands the OP_CAT opcode (which was present in early versions of Bitcoin and later removed). OP_CAT allows for data concatenation operations, enabling developers to build more complex script logic, thereby directly implementing smart contracts on the Bitcoin main chain. The most direct benefit of this upgrade is: developers can deploy decentralized applications (dApps) on the native Bitcoin network without relying on side chains, Rollups, or cross-chain bridges.
In terms of asset protocol integration, Nubit advocates and implements a unified standard called Goldinals. Goldinals provides a framework for asset issuance based on zero-knowledge proofs and state commitments. In simple terms, this is a 'Bitcoin native' token standard that does not rely on external trust institutions and does not require complex cross-chain bridges to verify the existence and status of each token on-chain. BitMM, running on Bitcoin, integrates fragmented protocols such as BRC-20, Runes, and Ordinals. Nubit has also made significant breakthroughs in trustless transactions. Its BitMM (Bitcoin Message Market) system supports users in conducting trustless transaction matching and information verification on the Bitcoin chain.
Unlike traditional scaling approaches (such as using side chains, Plasma, Rollups, or bridging wrapped tokens), Nubit adopts a 'native main chain scaling' path. BitVisa provides a decentralized identity and credential system. Whether it is transaction compression, smart contract support, or asset standard integration and on-chain transaction matching—all run directly on the Bitcoin main chain. It uses native BTC, not cross-chain mapped tokens.
3.1 Core Mechanism Analysis
This chapter's content is explained based on the article (Stateless and Verifiable Execution Layer for Meta-Protocols on Bitcoin) (see reference link 1). From my understanding, Bitcoin Thunderbolt (Thunder Network) and Bitcoin Lightning (Lightning Network) are similar extensions proposed to solve the problem of slow transaction confirmations on the Bitcoin main chain, with the core goal of improving efficiency and reducing costs. The difference between the two is:
The design of the Lightning Network leans more towards 'payment channels'—it can only be used for transfer payments and does not support smart contracts or complex logic, and its construction and maintenance threshold is relatively high, making it difficult for large-scale adoption. Thunderbolt, launched by Nubit, aims to provide off-chain protocols with programming capabilities, supporting Turing-complete operations, and enabling the construction of more complex state assets, liquidity protocols, and financial applications.
Flexible and adjustable multi-signature
Imagine splitting a Bitcoin 'signature' into two halves: one half in Alice's hands, the other half in the committee's hands. Each time it is transferred to a new user, Alice and the committee each add a 'small secret' to their respective halves of the signature—only the receiving new user knows this secret. The receiver can 'stitch' the two halves back together using the secret they know, obtaining the complete signature without needing Alice and the committee to communicate online.
Asynchronous fault-tolerant committee ledger
A 'service group' composed of several nodes (e.g., 4n+1) is responsible for bookkeeping, confirming who is the current owner. Even if a few nodes malfunction, as long as the majority are still online, the ledger can continue to function normally. These nodes only take care of 'helping to sign' and 'bookkeeping', and cannot casually use the funds, ensuring security and decentralization.
Atomic swap finalization
When this money is actually to be spent on-chain, it first goes through three steps of 'atomic swaps':
1. Alice and the committee spend the original locked output, temporarily giving the money to the committee;
2. The committee locks an equivalent amount in a safe that can only be accessed by 'Zenni and the committee' together;
3. Finally, Zenni takes the money from the safe using two signatures.
This way, neither Zenni nor the committee can run away, ensuring that off-chain reconstruction and on-chain redemption are seamlessly integrated.
3.2 Thunderbolt's Protocol Design and Key Innovations
· Non-interactive, recursive signature delegation
A tweakable threshold Schnorr signature structure has been designed. Traditional payment channels often require several rounds of messages; Thunderbolt only requires 'sending a signature with a small secret' each time, significantly reducing the online requirements.
· Each transfer involves changing to a 'new lock'
Every transfer involves Alice and the committee updating signatures with a new small secret, rendering the old 'lock' completely void. This ensures that no one from the past can obtain the new signature, preventing the old signature from being reused.
· Only leaves a single trace on-chain
Only lock on-chain once at the beginning, with all subsequent changes made off-chain, and finally bring this money on-chain for spending. Compared to the Lightning Network, which constantly opens and closes channels, Thunderbolt has fewer on-chain operations and offers better privacy.
· No loss of funds even when offline
Even if Alice or Zenni remains offline, as long as the majority of the committee are online, transfers or redemptions can be completed at any time without worrying about time locks expiring or opponents maliciously closing the channel.
· Truly 'machine-proof' security
All key steps in the protocol are 'formally verified' using Tamarin Prover, meaning these security assurances are not just theoretical but have been repeatedly validated by automated tools.
IV. How is Thunderbolt different from existing Lightning Network solutions?
Let's compare Thunderbolt with existing solutions (such as BOLT protocol, Breez SDK, Phoenix) to see what improvements it has made.
Differences between Thunderbolt and existing Lightning Network solutions:
We can see that Thunderbolt's main advantages lie in 'security' and 'theoretical completeness'. It is one of the few that can achieve:
· The protocol design can be proven to be secure
· Malicious users cannot profit unilaterally under any circumstances
But its disadvantages are also very apparent:
· Complex deployment: To use Thunderbolt, you currently have to run the full protocol stack, making it difficult for ordinary wallet users to get started.
· Main chain compatibility: The script language of the Bitcoin main chain is too simplistic, and Thunderbolt must implement its functions through clever workarounds, increasing the difficulty of implementation.
· Ecosystem support is still lacking: Unlike BOLT, which already has a large number of wallets and node support, Thunderbolt is currently in the 'early research stage'
V. The Potential Impact of Thunderbolt: A Catalyst for BTCFi?
Source: Self-made
So is Thunderbolt the optimal solution for BTCFi? Let's throw out a bold opinion:
Thunderbolt is theoretically the optimal solution for BTCFi at present, but in practice, it is still in the 'Alpha stage'. In other words, it is like the 'Ethereum 2.0 white paper' of the Bitcoin world—full of foresight but not yet into the 'engineering system level' of implementation. Based on current observations, I believe there may be three potential development paths for Thunderbolt:
1. Integrated through Rollup: Serving as a DeFi engine on the Bitcoin side
The Bitcoin main chain itself lacks sufficient scalability, and Thunderbolt may ultimately become an off-chain module on some Bitcoin L2 (e.g., BitVM, Nomic, BOB). This is similar to integrating Thunderbolt as a general contract execution layer in a Rollup.
For example:
· BOB can integrate Thunderbolt channel layers to achieve native BTC transactions
· RGB ecosystem may also introduce Thunderbolt state management logic
· BitVM itself supports more complex logic, Thunderbolt will become one of the contract standards
· Serving systems like Babylon, Bitlayer, etc.
2. Forming an independent standard ecosystem, running parallel to the main chain
The biggest possibility for Thunderbolt is to develop its own network ecosystem, node operation system, aggregators, etc., much like the Lightning Network, and may even form Thunderbolt-LSP operators. Meanwhile, Nubit, in collaboration with miners from the Satoshi era, promotes protocol-level soft fork upgrades and introduces two major features: UTXO Bundling and OP_CAT, which can directly support BTC protocol-type assets (BRC20, Runes, Ordinals), creating a vast space for imagination. Perhaps in the future, it may have:
· Thunderbolt Wallet (similar to Phoenix)
· Thunderbolt Node (Light Node Running Channel)
· Thunderbolt DEX (Off-chain Order Matching)
· Thunderbolt AMM (Liquidity Pool)
3. Could be replaced by simpler solutions
Of course, if a system emerges in the future that can achieve similar functionalities without state channels, formal languages, or off-chain protocol collaboration, then Thunderbolt might just be a transitional product, akin to:
· If BitVM achieves a more efficient contract execution environment
· Cross-chain ZK technology allows BTC assets to be deployed completely trustworthily on other chains
· A certain native Bitcoin protocol will unify payment + lending + contracts into a single model
Finally, from an ecosystem perspective, the greatest significance of Thunderbolt is not that it can run payments, but that it enables Bitcoin assets to have off-chain contract composability for the first time. This sounds abstract, but the 'composability' seen in the explosion of Ethereum's DeFi highlights how critical this is. The explosion of Ethereum is attributed to the complete ecosystem of Solidity + Hardhat + Ethers.js + Metamask.
The biggest highlight of Thunderbolt is the introduction of two major features: UTXO Bundling and OP_CAT. OP_CAT introduces native programmability to Bitcoin's network, while UTXO Bundling bundles multiple small transactions together to process them, compressing the size of transaction data and increasing on-chain throughput, similar in logic to Ethereum's Rollup. It seems that unifying all Bitcoin ecosystem protocols and accommodating various assets and BitMM implementations is no longer just a pipe dream, but Thunderbolt still appears to be at a stage where it has 'written a strong mathematical paper', and there may still be a considerable distance before it is usable by developers.
This article is from a submission and does not represent BlockBeats' views.