While Bitcoin is still used primarily for transactional purposes, its infrastructure allows for many other uses that are often overlooked.
This phenomenon took the bitcoin community by surprise: Since January 21, over 200,000 NFTs have been natively written on its blockchain, the result of the launch of Ordinals Projects, a developer-initiated community project. In the past, protocols like Counterparty certainly allowed the creation of non-fungible tokens, but they were issued on a parallel network. Here, sequence numbers are files written to the Bitcoin blockchain during a transaction and are therefore associated with one satoshi (the smallest unit of bitcoin).
The project is not without division: these transactions fill the blocks of the chain and therefore can overload it. For some techies, like developer Luke Dash Jr., it’s even an attack. Others, like Dan Held, in contrast, view this effervescence with benevolence, believing that any use of Bitcoin is acceptable as long as they pay transaction fees to miners.
“Bitcoin is very conservative”
Since its inception, the core business of Bitcoin has indeed been the decentralized and secure medium of transactions defined by its core layer, or layer-1. This is a functional base and, in fact, is updated with care. “From a supply-side perspective, we don’t need anything more efficient: Bitcoin works, it does its job, and it does it well,” Charles Guillemet, Ledger’s CTO in the city and personally passionate about Bitcoin, tells us. On the other hand, Bitcoin is very conservative, adding code is very difficult to understand and frustrating at times.”
Bitcoin logo in pixel art. © Dall-E
Bitcoin updates follow a process similar to scientific research: Bitcoin Improvement Proposals (BIPs) are published by community members and peer reviewed. More often than not, in order to accept this offer, 95% of the miners must embed a link to this code, and users must update their nodes.
An adherent of a trustworthy system so as not to compromise the value circulating on the chain, the bitcoin community has been historically cautious, if not skeptical about these proposals. Until today, this conservatism has worked for her, given her dominant position in the market. The latest development to date is Taproot, an update activated in November 2021 that aims to make it easier to create smart contracts and ultimately improve transaction privacy.
Bitcoin for data binding
But despite this apparent simplicity, many companies did not wait for the ordinals to start using Bitcoin for other purposes. According to Gilles Cadignan, Woleet, founded in 2016 by Frenchmen Gilles Cadignan and Vincent Barat, is one of them and claims to be a “digital trust company on the Bitcoin blockchain.” Woleet first offered its customers proof of time or “proof of data integrity over time”: the company relies on Merkle trees, a cryptographic technique published “at regular intervals, four times a day on the blockchain.” A particularly interesting solution for “intellectual property claims as evidence of primacy, as it allows the existence of data to be verified without exposing it.”
During its development, Woleet has since added an electronic document signature “like Docusign or Yousign, with the difference that there is no need to access these documents, and for some clients this is very important.” They are present in France, the rest of Europe, Asia or South America and are called Danone, Acciona, Sakara, Weproov and also Chanel because of their stores that collect consent to share personal data from customers. Woleet’s decision convinced the group to switch from their previous provider to Woleet, which allows it to “collect those hundreds of thousands of signatures without sharing data with third parties” and without potential network vulnerabilities on centralized servers. “Bitcoin has no problems,” adds Gilles Cadignan. “Our customers really needed a different technology, and they just replaced it with another technology that was more efficient, cheaper, and faster.”
Smart contracts for treasury or inheritance
In Portugal, two other French people are working on bitcoin apps, Kevin Loec and Antoine Poinsot, co-founders of Wizardsardine, a company that develops a business-to-business bitcoin asset management app, Revault. Listed in 2020, the company relies on the little-known smart contract capabilities offered by Bitcoin: indeed, while programmable blockchains like Ethereum have gained momentum thanks to the promise of Turing-complete smart contracts, the concept of a smart contract was pioneered by Nick. Szabo, a cryptographer close to Bitcoin and the inventor of the multi-signature contract, which allows two or more users to sign a transaction and thus use the same wallet. “We are working on advanced scenarios that allow us to have different conditions for spending: temporary blocking (payment on a fixed date, editor’s note), number of signers, different rights depending on users,” explains Kevin Loek, whose clients are primarily private individuals or small and medium enterprises are interested in this type of use.
In addition to Revault, Wizardsardine recently announced Liana, a bitcoin-only wallet that, if the private key is lost, allows the user to obtain a new one, subject to certain conditions. A very valuable feature, especially for inheritance issues. “The interest in this solution is huge, we announced it in December, and we are inundated with requests. Very large bitcoin companies are interested in it,” says Kevin Loek.