Why Internet Computer’s Approach to Bitcoin Integration Could Redefine Web3

24 May 2024

Welcome to our "Innovators in Web3" series, where we delve into the minds shaping the future of blockchain technology. Today, we're honored to have Aisling Connolly, a prominent figure in cryptography and privacy research, discuss her pivotal role in integrating Internet Computer with Bitcoin. Aisling's deep expertise not only advances the field but also sets the stage for transformative changes across the Web3 landscape. Join us as we uncover how her groundbreaking work is driving innovation and securing a more interconnected digital world.

Ishan Pandey: Hi Aisling. It's wonderful to have you here for our "Innovators in Web3" series. To start, could you share how your background in cryptography and privacy research has shaped the development strategies for Internet Computer's integration with Bitcoin?

Aisling Connolly: My background and research interests have always been inspired by the cryptographers on the DFINITY team and generally, among such a group, the strategy is always to focus on strong cryptographic security and high-quality engineering. This can clearly be seen in our Bitcoin integration. Natively running Bitcoin adapters on ICP nodes removes some of the trust assumptions that come with traditional Bitcoin bridges. Our threshold signing capabilities also have stronger practical guarantees that are not always found in other implementations.

Ishan Pandey: Internet Computer is being termed as a "Bitcoin layer-zero." Can you explain this concept for our audience and how it positions ICP in the broader blockchain ecosystem?

Aisling Connolly: If you think about ICP from a high level, it consists of a network of nodes running in independent data centers which allow developers to build highly scalable applications. Moreover, ICP is built by one of the strongest cryptographic teams in the world, and hence has an unparalleled suite of cryptographic tools in addition to its web2 integrations. These features together serve as an ideal basis on which to build smart contracts and applications that interact with Bitcoin and Web3 more generally.

Ishan Pandey: The introduction of Threshold-Schnorr signatures is a significant technical update. Could you discuss the advantages this brings to the Internet Computer Protocol, particularly in terms of security and efficiency compared to the existing ECDSA scheme?

Aisling Connolly: Schnorr is a simpler scheme than ECDSA, so it’s easier to reason about its security. Hence, researchers and developers are less likely to make mistakes in implementations and analysis. The key benefits it brings, however, are in efficiency and the features it unlocks for bitcoin.

Ishan Pandey: With the upcoming Bitcoin halving and the launch of the Runes protocol, how do you see the role of ICP evolving in the creation of Bitcoin-centric DeFi and NFT applications?

Aisling Connolly: There are two key ways we see ICP being used in the creation of Bitcoin-centric DeFi and NFT.

On the one hand, developers are using the ICP network as a basis to build DeFi and NFT applications without needing to build their own network from scratch and without the need for bridges or oracles.

On the other hand, we’ve seen people using the ICP ecosystem to allow trading of assets (both in DeFi and NFT) with very fast finality and negligible fees.

Ishan Pandey: Aisling, considering the broad scope of applications from DeFi to NFTs on the Bitcoin blockchain, what future developments can we expect from DFINITY to enhance these capabilities?

Aisling Connolly: Right now, we are working on the threshold Schnorr integration which will allow smart contracts to interact with newer Defi and NFT aspects of Bitcoin directly. When complete, this will be the third pillar of our Bitcoin APIs (Bitcoin core functions, threshold-ECDSA signatures, and threshold-Schnorr signatures.) Beyond this, we’re looking closely at the developer tooling for Bitcoin devs and aim to create the best developer experience in the industry.

Ishan Pandey: With ICP's 3rd anniversary approaching and the unveiling of the new "AI Roadmap" and "Chain Fusion Roadmap," can you share what these roadmaps mean for ICP's future? How will they shape the development and the overall impact of the Internet Computer Protocol in the coming years?

Aisling Connolly: AI is becoming more integral to daily life, yet it faces a significant trust issue due to users' lack of insight into data usage and response generation. The opaque nature of AI models makes trust-building challenging. The AI Roadmap outlines a path that will bring trust and security to AI models. I am particularly interested in how AI can influence DeFI. Similar to traditional finance AI can be used AML services, fees or rates calculation, and market analysis in the DeFi space.

Chain Fusion is a major priority for us this year. ICP enables direct interoperability with all major blockchains, including Bitcoin, Ethereum, other EVMs (and soon Solana), without relying on any trusted intermediary. Chain Fusion will open up a host of new use cases and access to liquidity for projects leveraging Chain Fusion.

Ishan Pandey: Looking towards the future post-halving, how do you anticipate the Bitcoin ecosystem will change, and what role will the Internet Computer play in this new landscape?

Aisling Connolly: From the conversations and discussions among some of the leading Bitcoin developers, there are a lot of super interesting projects set to launch in the coming months. Serious researchers are starting to enter the conversation, and we see the development of a host of new meta-protocols that take Bitcoin beyond the use cases of ordinals and runes.

We’re seeing already that many developers are choosing the ICP network and suite of cryptographic tools to build their L2s, protocols, and other applications. This means they can get to market much faster as they don’t have to bootstrap a network from scratch, and they can inherit security and other advanced features of ICP.

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Vested Interest Disclosure: This author is an independent contributor publishing via our business blogging program. HackerNoon has reviewed the report for quality, but the claims herein belong to the author. #DYOR.