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The Dfinity Foundation, the organization behind the Internet Computer blockchain, said on Tuesday that it is preparing to launch Bitcoin smart contracts and decentralized financing (DeFi) apps on its network.
Dfinity is All Set To Launch Bitcoin Smart Contracts On The Internet Computer
In a statement accompanying the launch, Dfinity creator Dominic Williams stated, “Internet Computer smart contracts will get access to Bitcoin liquidity, and Bitcoin will acquire powerful new smart contract capabilities without the need for insecure and burdensome trusted bridge services.”
Smart Contracts Will Allow Bitcoin To Be Used For Lending, Yield Farming, Derivatives, And Other DeFi Apps
A Bitcoin DeFi ecosystem is a big industrial endeavor. It would imply that the world's most popular cryptocurrency, like the current market leader, Ethereum to be used for lending, yield farming, derivatives, liquidity pools, and other purposes.
The Internet Computer, which was unveiled in May after being in development since 2016, is intended to serve as an alternative to today's cloud-based infrastructure for the global web.
Its lofty goal is to turn the Internet into a massive global computer capable of competing in the $370 billion cloud computing market by enabling safe, decentralized versions of popular apps like LinkedIn, TikTok, and WhatsApp.
Smart contracts and interoperability with the rest of the web, as well as various blockchain networks, will be critical to achieving this objective since they will allow diverse pieces of software to communicate with one another effortlessly.
“The Internet Computer is powered by innovative ‘chain key cryptography,' which allows it to sign transactions for other blockchains such as Bitcoin,” Williams explained.
Dfinity says that the Internet Computer has processed over 200,000,000 blocks since its inception just four months ago, considerably more than any other blockchain.
Using Bitcoin To Bridge The Gap
However, Dfinity is not the only project attempting to incorporate Bitcoin. To date, the most prevalent means of doing so have been bridging technologies.
Portal, a DeFi project is also attempting to create a DeFi ecosystem for Bitcoin. On Tuesday, it announced an $8.5 million financing round, with Coinbase Ventures and ArringtonXRP Capital participating.
“We're thrilled to see Portal's Bitcoin-native solution to multichain transfers go live and give an alternate bridging mechanism to the rising number of active on-chain users,” said Michael Arrington, creator of ArringtonXRP and TechCrunch.
Bitcoin is set for its first significant update in several years in November. The modifications, dubbed Taproot, will make it easier to launch smart contracts on the network.
Bitcoin supporter and Twitter and Square co-founder Jack Dorsey is eager to capitalize. In July, he revealed that Square is developing TBD, a DeFi platform that would include Bitcoin.
However, all of the activity has piqued the interest of authorities. They have expressed worries about project security and accountability, and appear to be increasing their vigilance in the heavily debated DeFi area.