Bitlayer’s Bitcoin smart-contract system is being implemented by mining pools behind 31.5% of the network’s hashrate

Bitlayer's Bitcoin smart-contract system is being implemented by mining pools behind 31.5% of the network's hashrate, a development that will help ensure that its system will operate on the Bitcoin blockchain

Major Bitcoin (BTC) mining pools are implementing Bitlayer’s Bitcoin smart-contract system, the company announced on Saturday, May 27.

According to a statement shared with Cointelegraph, Bitlayer’s BitVM implementation will be supported by Antpool, F2Pool, and SpiderPool. Antpool CEO Andy Chow said that the move will help ensure the system can function.

“We are pleased to be supporting Bitlayer in their endeavor to bring smart-contract functionality to the Bitcoin blockchain,” said Chow.

BitVM (Bitcoin Virtual Machine) is a framework that enables complex smart contracts to be deployed on the Bitcoin blockchain without changing the base protocol. The idea was introduced by Robin Linux earlier in 2023, and allows for the complex computation involved in smart contract systems to be verified onchain and executed offchain in a way closely resembling optimistic rollups.

A BitVM implementation

Bitlayer is a BitVM implementation, aiming to allow Bitcoin to flow through decentralized finance (DeFi) systems and layer-2 networks. According to Chow, the implementation might lead to heightened activity in Bitcoin’s network and generate revenue for miners.

“This integration will encourage greater transaction activity on the Bitcoin blockchain, which in turn will benefit miners through increased fees and block rewards,” he added.

Mining pools such as Chow’s Antpool play a critical role in the adoption of BitVM implementations because they directly determine the inclusion and validation of new types of transactions and scripts at the consensus layer.

BitVM requires miners to include custom Taproot-based transactions that encode interactive verification logic. Mining pools must agree to include these non-standard or computationally intensive scripts in blocks, otherwise the protocol would simply not function.

As the largest Bitcoin mining pool, with 17.2% of the network’s hashrate according to Hashrate Index data as of May 26, Antpool’s decision is crucial. Smaller pools such as F2Pool (8.2%) and SpiderPool (6.1%) are also supporting Bitlayer’s system.

This results in a total supporting hashrate of 31.5%.

This is enough to secure transaction inclusion in under one in every three blocks. At present, this is likely enough for testing, prototyping and early-stage applications.

With this percentage of supporting hashrate, developers can build functional systems with the assumption that, despite some latency, BitVM transactions will be processed. So while it is hard to view this hashrate as allowing a fully functional deployment, it is likely enough for the early phases of BitVM development.

A Bitlayer representative said that “should collective hashrate support weaken or policy shifts occur within Bitcoin Core, we have a multi-layered contingency plan.” This plan includes the “expanded mining pool partnerships,” referring to the company’s intention to keep onboarding more mining pools.