Bitcoin remains the most popular and sought-after cryptocurrency in the world. Of course, the asset’s position comes primarily from its incumbency power. Bitcoin was the first cryptocurrency to ever be launched, meaning that more people had come to know it than anything else.
Today, cryptocurrency prices are determined by something else - functionality. If a coin or its project is useful enough, more people will eventually use it. Over time, its price will see gains.
DFINITY’s Bold Mission
Functionality remains an important trait for any coin that is looking to become a big deal. However, many market participants have always believed that Bitcoin was above all of that. The coin’s position in the market is solidified, and nothing will change that.
Well, some companies are looking to bring a change to that. One such company is DFINITY - the blockchain development company that is behind the Internet Computer (ICP) coin. Last month, the company announced that it will be looking to bring smart contract functionalities to the Bitcoin network.
DFINITY explained that it is looking to use its chain key cryptography to integrate with the Bitcoin network. This will pave the way for developing smart contracts on the network, many of which will have native Bitcoin addresses directly on Internet Computer.
Dominic Wiliams, the founder and chief scientist at DFINITY, pointed out that Internet Computer smart contracts will gain access to one of Bitcoin’s primary benefits - its high liquidity. Transactions will be quick and seamless, with more people using Bitcoin than any other cryptocurrency. At the same time, Bitcoin will get new smart contract functionalities.
A Freer, More Functional Bitcoin
There won't be any need for bridges and other adjustments to the Bitcoin network with this integration. Developers will be able to use the Bitcoin network as they please, with decentralized applications (dApps) being built and running transactions that are settled in the world’s leading digital assets.
Smart contracts on Internet Computer will especially feature Bitcoin addresses, allowing developers to access transactions on the asset’s blockchain. This move should also improve transaction finality on Internet Computer to just a few seconds.
The allure of this move is definitely obvious. Bitcoin has always been the most valuable cryptocurrency, but its blockchain has suffered from the lack of smart contract functionalities. This means that people can’t build on the blockchain and develop dApps.
To an extent, this lack of smart contracts on Bitcoin’s blockchain is why many other assets have become so prominent. The problem has also left Bitcoin unable to fulfill its potential. If DFINITY can actually be successful, the company could unlock the final thing that allows Bitcoin to be so useful.
Blockchains have been shown to benefit significantly from smart contract functionality. Cardano’s blockchain integrated smart contracts last month, and developers have rushed to build on the chain. According to data, there are over 10,000 smart contract scripts in the Cardano blockchain’s timelock.
Cardano’s price has since been on the rise, and it is expected to jump even further once these smart contracts leave their timelock and become mainstream. If DFINITY succeeds, Bitcoin could be in line for gains such as these as well.
Square Building DeFi on Bitcoin
Interestingly, DFINITY isn’t the only company working to improve the Bitcoin blockchain’s functionality. In July, Jack Dorsey announced that Square - his payment processing business - will be looking to build decentralized finance (DeFi) services that use the Bitcoin blockchain.
As Dorsey explained, Square's new division will build an open developer platform that aims to make it easier to create decentralized and permissionless financial services. The company will focus on Bitcoin, although it is unclear if it will be building on other networks.
Square’s new division will be led by Mike Brock, a software engineer who was part of integrating Bitcoin features for the company’s Cash App back in 2018. Brock has extensive experience building open-source projects, and he will be instrumental in developing this new system.
“On a personal note, I just want to say that I am super excited to return to the world of open source. I cut my professional teeth in open source at @RedHat and excited to prove to the world (again) that great businesses can be built atop of free and open software,” Brock said.
Companies like these are doing impressive work as they hope to make Bitcoin more than just the most valuable cryptocurrency. We all know that Bitcoin offers payment processing, but what if the coin could do much more? DFINITY and Square could be knocking on the door to that answer.