Crypto glossary
BitVM
BitVM is a scheme for verifying arbitrary computation on Bitcoin through fraud proofs, without a soft fork, used to design bridges and rollups.
Proposed by developer Robin Linus in October 2023, BitVM works like an optimistic rollup. A prover claims the result of a computation, such as the validity of a rollup state or a zero-knowledge proof, and posts collateral. If anyone spots a false claim, they can challenge it, and a pre-signed sequence of Bitcoin transactions lets the challenger prove the error on-chain using only existing script opcodes, taking the prover's deposit.
The key use is trust-minimised bridges: instead of trusting a multisig to release bitcoin from a layer 2, users rely on at least one honest participant in the setup to block fraudulent withdrawals. Later versions such as BitVM2 made challenges cheaper and open to anyone. Several Bitcoin layer 2 teams are building bridges and rollups on it.
BitVM is complex and still young. Setting up a bridge requires large numbers of pre-signed transactions, operators must front liquidity for withdrawals, and disputes are expensive on-chain. Security depends on assumptions about honest operators and timely challenges. Many in the Bitcoin community see it as a workaround until covenants or other opcodes make such designs simpler.
Example
A rollup operator claims a batch of withdrawals is valid; a watcher finds an error, starts the BitVM challenge game on Bitcoin and, after a few rounds of transactions, claims the operator's slashed bond.