BitVM is a computational model that enables Turing-complete smart contracts on Bitcoin without changing its consensus rules. It uses a validation mechanism , where participants engage in interactive challenges and responses.

In #BTCFi (Bitcoin-based DeFi), BitVM can play a crucial role by enabling complex smart contracts, supporting applications like lending, borrowing, decentralized exchanges, and other financial services. This could significantly expand Bitcoin’s ecosystem and use cases in finance.

A prover claims a specific function produces certain outputs from given inputs. If the claim is false, the verifier can present a concise fraud proof to penalize the prover. This mechanism allows Bitcoin to support advanced smart contracts without modifying its core protocol.

#Gnubit #Nubit