The Bitcoin Foundation supports all of the innovative efforts happening on and around Bitcoin.
The New World of Bitcoin
Bitcoin is a digital asset and a payment system invented by Satoshi Nakamoto. Transactions are verified by network nodes through cryptography and recorded in a public dispersed ledger called a blockchain. Bitcoin was first released as open-source software in 2009.
Bitcoin is unique in that there are a finite number of them: 21 million. This makes it a deflationary currency, meaning that its value is expected to increase over time. Bitcoin is also decentralized, meaning that it is not subject to government or financial institution control.
These features have made Bitcoin popular with investors and those who are looking for an alternative to traditional currencies. However, Bitcoin development continues to evolve with a global community of developers building new capabilities on or around Bitcoin.
As Bitcoin continues to evolve, it is poised to have a significant impact on the global economy... it could completely revolutionize finance. On this page we provide spotlights on Bitcoin developments in the following categories:
2023 Innovation Spotlight - On Bitcoin
Bitcoin Ordinals are a new implementation similar to colored coins that allows users to "inscribe" digital content on the Bitcoin blockchain. They are similar to NFTs, but they are more secure and immutable. They can be used to represent anything of value, such as text, art, music, videos, or even real estate. However, they are also controversial because they use a lot more blockspace than usual Bitcoin transactions. The Bitcoin community is working to address the issue of abuse of block space, but there is no one-size-fits-all solution.
2022 Innovation Spotlight - Sidechains
Libre is a Sidechain for Bitcoin and Ordinals that is designed to be more scalable and efficient than the Bitcoin mainchain. Libre uses ultra-fast wrapped Bitcoin and trustless smart contracts to bring fast, decentralized trading to the over 17,000 new BRC-20 ordinals, and 50,000 .sats names that have been deployed in 2023. Libre also has a faster block time of 0.5 seconds, which makes it more suitable for micropayments.
2019 Innovation Spotlight - Proposals
BIP 300 "Softfork Activation Process"
BIP 300, also known as the "Softfork Activation Process," is a Bitcoin Improvement Proposal that outlines a standardized method for implementing softfork upgrades in the Bitcoin protocol. Softforks are backward-compatible changes that introduce new features or enhancements to the network without requiring all participants to upgrade their software. BIP 300 provides a clear and structured process for the deployment of softforks, ensuring consensus among the Bitcoin community and minimizing the risk of network disruptions or chain splits. It defines a signaling mechanism using version bits, where miners and nodes can signal their readiness for the softfork activation. BIP 300 also introduces a grace period and a lock-in period, during which a supermajority of miners must signal support for the upgrade before it is activated. This proposal promotes transparency, inclusivity, and the overall stability of the Bitcoin network during the implementation of important protocol changes. BIP 300 unlocks new possibilities for drivechains and sidechains for scaling Bitcoin.
2018 Innovation Spotlight - Proposals
Taproot is a Bitcoin protocol upgrade that improves privacy, scalability, and smart contract functionality. It does this by introducing a new signature scheme called "Schnorr signatures", which are more efficient than the current ECDSA signature scheme. Schnorr allows for the creation of complex multi-signature transactions that are smaller and more private than current multi-signature transactions. Taproot also introduces a new scripting language called Tapscript, which allows for more complex smart contracts while maintaining privacy. Overall, Taproot is expected to improve the efficiency and privacy of the Bitcoin network, while also enabling more complex smart contracts.
The Taproot upgrade was enabled in 2022.
2015 Innovation Spotlight - Layer 2
The Lightning Network is a second-layer payment protocol that operates on top of a blockchain, such as Bitcoin. Its purpose is to enable fast and cheap transactions by allowing users to create payment channels between themselves. These channels can be used to send multiple transactions without having to broadcast them to the blockchain, which reduces transaction fees and increases transaction speed. The Lightning Network also has the potential to increase the scalability of blockchain networks by reducing the number of transactions that need to be processed on-chain. However, the Lightning Network is not without its limitations. For example, it requires users to lock up funds in payment channels, which can be inconvenient for some users. Additionally, the Lightning Network is still in the early stages of development, and there are concerns about its security and usability.
2014 - Innovation Spotlight - Sidechains
Sidechains are interoperable with Bitcoin. They have the potential to enable a wide range of use cases, such as the creation of new digital assets, the implementation of smart contracts, and the development of new decentralized applications. Sidechains can benefit the Bitcoin ecosystem by allowing developers to experiment with new features and functionality without risking the security of the main Bitcoin blockchain. Additionally, sidechains can help to increase the scalability of the Bitcoin network by reducing the number of transactions that need to be processed on-chain. However, there are also concerns about the security and decentralization of sidechains, and it is important to carefully consider these issues when developing and using sidechains.
RSK is a Bitcoin sidechain that enables smart contracts to be executed on the Bitcoin network. It is a stateful smart contract platform secured by the Bitcoin miners, and is currently the most secure proof-of-work based smart contract network. RSK provides a highly secure mechanism to transfer bitcoins from Bitcoin and back, and implements a merged mining protocol that provides Bitcoin miners with additional fees without adding significant overhead.
Liquid is a Bitcoin sidechain that is designed to improve the scalability and privacy of Bitcoin. It is a federated sidechain that uses a trusted set of nodes to maintain the consensus. Liquid provides a number of features that are not available on the Bitcoin mainchain, including confidential transactions and atomic swaps.
2013 Innovation Spotlight - On Bitcoin
Bitcoin OmniLayer, originally known as Mastercoin, was launced in 2014 as a powerful protocol built on top of the Bitcoin blockchain that enables the creation and management of digital assets. It provides a framework for developers to issue, trade, and manage tokens that are backed by Bitcoin's secure and decentralized infrastructure. The OmniLayer protocol adds an additional layer of functionality to Bitcoin, expanding its use cases beyond a mere digital currency. With Omni, users can create and trade various types of assets, such as custom tokens, digital currencies, and even smart properties, all while leveraging the security and immutability of the Bitcoin network. This innovative protocol has paved the way for a diverse range of applications, including decentralized exchanges, crowdfunding platforms, and tokenized asset management systems, making it an essential component of the expanding blockchain ecosystem.