ICP Revolutionizes Bitcoin Integration with Threshold-Schnorr Signatures

Zurich — The Internet Computer Protocol (ICP) has unveiled a game-changing advancement in blockchain technology with the integration of threshold-Schnorr signatures and on-chain Bitcoin block headers, marking a significant milestone known as Deuterium. This update is set to empower developers to unlock unprecedented Bitcoin-native use cases and drive innovation within the ecosystem.

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Bitcoin is evolving beyond its digital gold status, becoming a cornerstone of a decentralized economy. Recent figures highlight this shift: Runes and BRC20 tokens now outpace regular BTC transactions by threefold. With over 68 million Ordinals inscriptions and $459 million in fees, coupled with 15 million Runes transactions, the Bitcoin network is witnessing a surge in activity and engagement.

However, the Bitcoin network’s lack of native smart contract support has long hampered developers. The Deuterium milestone addresses this gap with two pivotal features:

1. Threshold-Schnorr Signing: ICP smart contracts can now directly execute Schnorr signatures, enabling functionalities such as etching Runes, inscribing Ordinals, transacting BRC-20 tokens on Bitcoin L1, and signing Taproot transactions.

2. On-Chain Bitcoin Block Headers: Previously, ICP supported only Bitcoin’s UTXO set. The Deuterium milestone expands this to include complete Bitcoin block headers, which is becoming crucial as new meta protocols increasingly interact with block headers.

Lomesh Dutta, VP of Growth at the DFINITY Foundation, highlighted the significance of this advancement:
"The integration of tSchnorr signatures allows ICP smart contracts to natively handle Bitcoin transactions. This breakthrough paves the way for a plethora of new applications, from DeFi lending markets to decentralized indexers. We’re already seeing an impressive increase in developer engagement, which we believe will catalyze rapid development within the Bitcoin ecosystem."

Lomesh Dutta, VP of Growth at the DFINITY Foundation
Here’s how ICP’s ecosystem projects are poised to leverage these advancements:

Omnity Network

Threshold-Schnorr signatures will drive Omnity’s growth, enabling it to manage Bitcoin Taproot assets and connect with other blockchains like Solana and Osmosis by the end of August 2024. The Bitcoin Canister block header data will enhance its ability to verify Bitcoin blocks independently, ensuring trustlessness.

Louis Liu, Founder of Omnity Network, stated, “Our integration of Chain Key, ECDSA, and Bitcoin RPC canisters has set the stage for the Deuterium milestone. With the new capabilities, including threshold Schnorr signing and Bitcoin Canister block headers, we’re strengthening our infrastructure and supporting BRC20.”

Bioniq

Bioniq, with its user base of over 50,000, will employ threshold-Schnorr signatures for efficient cross-chain asset transfers. As the first Layer-2 solution for Bitcoin Ordinals, Bioniq aims to streamline the trading and minting of Bitcoin-based digital art and collectibles.

Bioniq CEO Bob Bodily remarked, “ICP’s Bitcoin integration has been exceptional. With the Deuterium milestone, we’re excited about the threshold Schnorr signing subnet and block headers, which enhance our capabilities and user experience.”

Helix Markets

Threshold-Schnorr signatures will enable Helix to facilitate seamless trading of ICP tokens and other assets without bridging. This update also positions Helix to integrate with major crypto ecosystems, tapping into significant trading volumes and expanding its reach.

Gorazd Ocvirk, Co-Founder of Helix Markets, enthused, “The Threshold Schnorr module has unlocked effortless cross-chain interactions for us. Our canisters can now handle Bitcoin and Solana assets as seamlessly as any other, simplifying our operations and enhancing security.”

The ICP ecosystem’s successful integration of these features demonstrates the potential for secure, direct interaction with Bitcoin’s liquidity and user base. Developers looking to build Bitcoin applications can explore open bounties and join the DFINITY developer forum for further insights.

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About the Internet Computer

The Internet Computer Protocol (ICP) is a decentralized cloud 3.0 network that enables the development and operation of services directly on a public blockchain with exceptional scalability. ICP’s protocol ensures tamper-proof, low-cost, and energy-efficient operations, setting a new standard for decentralized networks in Web3.