Why Starknet can scale both Ethereum and Bitcoin

Author: Eli Ben-Sasson, co-founder of StarkWare; Translation: Golden Finance xiaozou

STARKs have finally reached their next challenge. Now, STARKs will demonstrate their scaling advantages on the most egalitarian currency ever - Bitcoin. Once OP_CAT is adopted on Bitcoin, deploying STARK validators in Bitcoin scripts will become a reality. This opens a channel for secure self-custodial transfers between Bitcoin and Starknet, creating a L2 that scales both Ethereum and Bitcoin.

Cryptocurrency can purify the digital and financial world. It can bring integrity to money, rebalance power in our society, take power back from big tech companies and give it back to sovereign individuals. It is a tool to empower humanity and grassroots communities. In short, it is a source of beauty. Therefore, we need a vision that can demonstrate this and is about everyone. In order to realize this vision, I left my quiet academic career.

This vision would not be complete without expanding the launch chain of this fantastic project. We are expanding Bitcoin and unleashing the power of the blockchain to change the world. StarkWare is supporting this initiative with concrete steps and has launched a $1 million fund to support new research that will reveal the pros and cons of adopting OP_CAT on Bitcoin.

We have had a very fruitful strategic partnership with Weikeng Chen of L2 Iterative Ventures (L2IV) through the ZeroSync Foundation, which ultimately led to the creation of the Bitcoin Wildlife Sanctuary. We have leveraged their team’s hands-on approach to engineering and research to expand the boundaries of our open-source work to deploy OP_CAT-based contracts and STARK validators in Bitcoin Script. We would also like to thank BitVM and the ZeroSync Foundation for exposing so many people to the capabilities of Bitcoin. We have also been greatly influenced by Carter Feldman, founder of QED, who has shown us a new perspective and open-minded thinking on the potential of Taproot.

Now, let’s get back to basics and explain why what we’re doing is meaningful.

1, 2008: The moment of rupture

Let’s go back to 2008, when global finance had just collapsed. In response, Satoshi Nakamoto published the revolutionary Bitcoin white paper. In this moment of rupture, Satoshi Nakamoto showed us how to do things differently. As a public, we can demand and enforce higher standards of integrity and transparency in the financial sector. Instead of relying on the bastions of traditional banks, Satoshi Nakamoto introduced an inclusive protocol that invited everyone to join. The protocol distributes value fairly and transparently to contributors through Bitcoin mining and fees. The more widely distributed the contributors, the better and more secure Bitcoin will become.

Bitcoin gives us more than just a ledger - it gives us the belief in change. It gives us faith at the very moment when the banks are screwing everything up - when the banks are busy repossessing homes for default and hoping that none of us realize that even home is not "as safe as home" despite all the mortgage lenders' "believe us" gestures.

The impact of Bitcoin, if fully realized, could be far more far-reaching than what we are seeing today. It can and should be used en masse as a global reserve currency. It can form the basis of a global "trust web" that supports all the social functions our free society requires: money, property management, and social interaction.

The Bitcoin whitepaper envisions a network that is actually used for payments, accessible to everyone, big or small, rich or poor, powerful or weak. Today, 1.5 billion people around the world don't even have a bank account. Bitcoin payments are not just an option for these people, but are actually their first medium of contact with financial infrastructure. Today, the capacity offered by Bitcoin is too small, and the available capacity is too expensive for these 1.5 billion people. I hope to develop a technology that allows everyone to use Bitcoin and participate in the free society that Bitcoin sustains.

2、Important but overlooked issues

Some people see StarkWare as the Ethereum maxis. Although we are aligned with Ethereum's values ​​and committed to Ethereum's success, we are first and foremost a STARK maxis. Starknet is deployed on Ethereum as an L2, and connecting Starknet to Bitcoin is also a natural extension of its functional features. This is consistent with our vision since the founding of StarkWare, that STARKs are public goods that are used to scale all truly decentralized blockchain projects. Of course, Ethereum is also an incarnation of the same ambitious mission described above, but it has taken a different path and has different pros and cons. This is good because, overall, it increases the likelihood that we will successfully build a protocol that can resist national power. The core values ​​of Ethereum are why we chose it as the settlement layer for Starknet in the first place, and these values ​​still exist. We firmly believe in Ethereum and are committed to its long-term success. Bringing ZK-STARKs to Bitcoin will not deviate from our path, but just take a detour. To date, StarkWare has deployed all of its systems on Ethereum. But STARK extensions to blockchains are an idea that was proposed at the Bitcoin conference in the spring of 2013.

At the conference, I took the stage to talk about my initial research on a type of cryptographic proof that would later be called STARKs, and many in the audience responded that this type of cryptographic research was exactly what blockchain needed. In other words, I had already been deeply interested in Bitcoin two years before Ethereum came out.

So StarkWare has been closely involved with Bitcoin from the beginning, and we have been observing the Bitcoin network with admiration. Taproot, and perhaps OP_CAT, expand the possibilities of Bitcoin in a way that I can now safely discuss publicly.

We have also supported groundbreaking Bitcoin projects such as ZeroSync, which is the first to integrate ZK proofs with Bitcoin to enhance privacy and scalability. StarkWare also commissioned a report from researcher John Light called "Validity Rollup on the Bitcoin Network," which re-evaluated the possibility of integrating existing validity rollups with Bitcoin, concluding that it could be an ideal match. Our next generation circle-stark prover-verifier—Stwo—targets the M31 finite domain. This domain works well with Bitcoin Script, which makes us well suited to provide the next generation of Bitcoin scaling.

3The Future I Hope to See

My dream is to see Bitcoin reach the scale it needs to reach, constantly serving everyone. This includes opening participation to everyone, with no financial barriers to entry. I believe that as long as Satoshi's insistence on decentralization and security is firmly adhered to, this dream will surely come true.

The Internet started out as a niche playground for nerdy engineers and academics. It took years to scale it and finally turn it into the infrastructure of our lives. Blockchain is a tool that can democratize the Internet and rebalance power by distributing trust and integrity to large communities of sovereign individuals, rather than entrusting it to a few large companies. But to truly seize power and return it to the masses, it will take scale.

I also believe that the opportunity of Bitcoin scaling should be seized to advance a value that is important to many in the Bitcoin community: privacy. The cryptographic technology that enables Bitcoin to scale also provides the raw materials for enhanced privacy features. In time, you will own everything: your keys, your coins, your confidentiality.

4 How to achieve this future?

We, StarkWare, are taking three concrete steps to scale Bitcoin today:

Step 1: We will propose a new design pattern for Starknet, a unified space that simultaneously settles on Ethereum and Bitcoin by making Starknet a self-hosted decentralized L2, a single layer that settles on both chains at the same time. Our team will guide or sponsor all work required to achieve this goal. Details of the architecture under investigation will be announced in the coming weeks.

Measure 2: StarkWare has launched a $1 million fund to support Bitcoin researchers and developers studying OP_CAT and its impact. These grants will be awarded to individuals and projects that sincerely support or oppose the upgrade, as well as provide proof of concept for the use of OP_CAT. Details about the fund will be announced next week.

Measure 3: Finally, we believe that the OP_CAT Bitcoin soft fork is the safest path for Bitcoin expansion, especially to support STARK verification and rollup. Therefore, we announce public support for OP_CAT. OP_CAT makes trustless rollup possible on Bitcoin by enabling recursive contracts that can manage and update state autonomously, thereby greatly increasing transaction throughput without overloading the Bitcoin network.

5, what potential does Bitcoin expansion unlock?

By scaling Bitcoin, we will be able to process transactions for millions of users in a second, instead of the current ~13 transactions per second. Some of the scaling use cases we envision for Bitcoin include:

· Scaling both Bitcoin and Ethereum: Today’s blockchain is fragmented. You can choose Bitcoin, the “digital gold” that stores value but has little other use, Ethereum, which aims to be the “world’s computer”, or other smaller chains. Starknet will consolidate the fragmentation by offering a choice on the two largest chains (dApps can choose one or both). Starknet will scale both chains simultaneously without interfering with the independent governance of either chain.

· Privacy: STARKs — the cryptographic proofs that will be used in the scaling process — already have a lot of unrealized privacy potential baked into them. The potential for privacy is a natural fit for the Bitcoin community. The “zero knowledge” aspect of the technology is well understood but still needs to be translated into practical solutions. Integrating a private L2 into the Bitcoin ecosystem, leveraging technologies like Zcash, MimbleWimble, or Noir, could significantly enhance transaction privacy.

· Financial Services for the Marginalized: For us, Bitcoin’s mission has always been, in part, to empower the underprivileged. Around 1.5 billion people worldwide lack access to traditional banking services, a debilitating barrier to bottom-up financial mobility. Other attempts to scale Bitcoin have yet to provide a solution for mass adoption. Through new scaling methods and the addition of more tools, Bitcoin has the potential to provide an inclusive global financial system for the world’s unbanked.

· Financial Innovation for Bitcoin: Today, Bitcoin enables digital cash payments, but the modern market requires more: better self-custody options, including programmable vaults, risk management and hedging tools, reputation, lending, derivatives, futures contracts, and more. All of this requires more functionality that cannot and should not be built directly on Bitcoin. Making Starknet Bitcoin’s L2 has the best of both worlds: tremendous financial innovation backed by the security of Bitcoin as digital gold.

· Improved user experience: Bitcoin’s original self-custodial security also makes it non-trivial to operate securely, especially for regular users. A modern L2 will provide users with secure and simple self-custodial interactions for most of their daily needs, while relying on the security of Bitcoin’s strong and reliable L1 for long-term value storage.

6, Why OP_CAT, STARKs, and Starknet?

(1) Why OP_CAT?

STARKs require verification of a hash chain, and not much else. Their main verification loop consists of simple algebraic operations (addition and multiplication modulo a small prime number) and verifying that the entry pre-committed via the Merkle tree was opened correctly. OP_CAT specifically supports creating and opening entries in Merkle trees in Bitcoin Script, as the core operations supporting Merkle tree creation and verification require concatenating two values ​​and then hashing them (OP_CAT enables concatenation). While other contract-supported opcodes may be more powerful, OP_CAT is the only one currently being discussed to support Merkle tree verification.

(2) Why STARKs?

In short, STARKs offer the greatest scale, are the most proven and secure, have no "toxic garbage" from a trusted setup process, have no exotic cryptographic primitives, and even have post-quantum security. The new STARK prover-verifier, named Stwo, uses small numbers that fit on the Bitcoin network for efficiency.

(3) Why Starknet?

Starknet on Ethereum already has a vibrant developer community and a programming language that puts all the scaling power at your fingertips. For any developer who knows Rust, Cairo, Starknet's native (and open source) language, will seem more familiar. There is no obvious high-level language emerging in the Bitcoin community today for building the world of on-chain activity. I hope Cairo can fill this gap and become one of Bitcoin's native languages.