ETH vs BTC: Can ZK-rollups succeed on BTC?
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ETH vs BTC: Can ZK-rollups succeed on BTC?
ZK-rollups have gained attention on Ethereum, but can this technology also be applied to Bitcoin?
Navigating Web3 tides with focused insightsWritten by: Russian Defi
Compiled by: TechFlow
Bitcoin and Ethereum store user data (or "state") in very different ways, and the way smart contracts interact with this data also differs significantly. This is because Bitcoin uses the UTXO model, while Ethereum uses an account-based model.
Moreover, the mechanisms protecting L1 rollups deployed on each network also differ greatly.
Rollups on the Lightning Network
Rollups are gradually gaining popularity on the Ethereum network.
If rollups were adopted on Bitcoin, we would have a payment network more likely to succeed than today’s Lightning Network.
Comparing the two can be difficult because they serve different purposes.
To gain a clearer understanding, it may help to think in terms of liquidity and number of users. Thousands of Lightning nodes are currently active on the network. Some of these are custodial, meaning they have customers using their services. However, it's hard to determine the total number of users, making it difficult to know how many transactions are being conducted via the Lightning Network at any given time.
In certain cases, rollups might be a more viable option than others. For example, if you want to make offline payments without requiring incoming liquidity or channel constraints. However, if you need high-throughput, low-cost transactions—such as micropayments or nanopayments—then state channels like the Lightning Network are likely the better choice.
P2P or B2B payments might be best suited for rollups, as they offer users a smoother experience. It also depends on what type of payment we're discussing—certain kinds of payments may be better served by rollups specifically designed for them.
The Potential of Rollups
Multisignature schemes secure rollups instead of relying on the native consensus mechanism used at Layer 1.
Rollups have a single block producer rather than multiple producers, which means users may need to wait 24 or 48 hours to withdraw their funds.
While tools for managing the Lightning Network and improving user experience are still under development, rollups could potentially solve many of these issues. Rollups can enhance trustworthiness, security, and uptime. Even so, underlying blockchains still face challenges—we continue to encounter bugs. Nevertheless, we may be getting closer to developing a system that will work well for everyone in the future.
Use cases show that rollups currently outperform the Lightning Network or other Layer 2 protocols available on Bitcoin today.
What can you do with ZK rollups that you can't do on Bitcoin Layer 1?
Various applications can be built on ZK rollups.
For instance, having a killer application is beneficial for any blockchain ecosystem, and one way to achieve this is by starting with stablecoins. If you can develop a widely accepted stablecoin payment rail, introducing your own token later becomes much easier.
Suppose the Lightning Network becomes the preferred method for transferring stablecoins—in that case, Bitcoin would gain an advantage over Ethereum.
However, if rollups become the primary solution for moving stablecoins on Ethereum, then moving ETH cautiously would also become easier.
Sending stablecoins through the Lightning Network requires some effort. The workaround involves repeatedly swapping stablecoins for bitcoin and back again to complete a payment, which naturally incurs transaction fees. This highlights a key issue with using the Lightning Network. ZK rollups on Bitcoin could play a crucial role here, as they enable token transfers, offering significant benefits to users.
What does it take to bring ZK Rollups to Bitcoin?
The good news is that even if new OP codes are required, it wouldn’t necessitate a hard fork.
Old nodes don’t need to update their software to stay compatible with the network and consensus; they can still send and receive tokens with nodes that have upgraded and are using the new OP codes.
Bitcoin has successfully executed this kind of soft fork before, so there’s no reason to worry too much now.
What’s next?
Before we finalize exactly what needs to change to implement ZK rollups on Bitcoin, numerous experiments must be conducted.
Adopting a soft fork could bring many benefits. For example, using a soft fork for validity rollups would unlock additional potential use cases and allow the network to repurpose OP codes for different functions.
Developers are already working hard on testnets, and various researchers will conduct multiple experiments to ensure everything runs smoothly and maximizes user benefit.
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