Using Logic Gates to Build Smart Contracts with Taproot Wallets: Case of BitVM

Introduction

Bitcoin’s Taproot upgrade, activated in November 2021, significantly enhanced the network’s privacy, efficiency, and scripting capabilities. By enabling more complex and flexible smart contracts, Taproot allows for innovative solutions. One such conceptual framework is BitVM, proposed by Robin Linus in October 2023, which leverages cryptographic techniques to enable more sophisticated smart contracts on Bitcoin.

This article explores how logic gates can conceptually be used to build smart contracts within the limitations of Bitcoin’s scripting language, using Taproot and the ideas presented in BitVM.

Understanding Taproot and Bitcoin Smart Contracts

Taproot Upgrade Overview

Taproot introduces several key features to Bitcoin:

• Schnorr Signatures: More efficient signature scheme that enables signature aggregation.
• MAST (Merkelized Abstract Syntax Trees): Allows for complex scripts to be committed to in a compact Merkle tree, revealing only the executed branch upon spending.
• Enhanced Privacy: Complex scripts appear indistinguishable from simple ones until they are spent.