Bitcoin News Today: Bitcoin Gets Ethereum's Brain: Smart Contracts Go Native

BRC2.0 Upgrade Embeds Ethereum Virtual Machine Into Bitcoin Ecosystem

Bitcoin’s BRC-20 token standard has completed a major upgrade, bringing Ethereum Virtual Machine (EVM) functionality directly into its core infrastructure. The update, known as BRC2.0, activated at block height 912,690 and introduces smart contract capabilities to the Bitcoin network, enabling developers to build decentralized applications (dApps) and deploy programmable financial tools without relying on external platforms or wrapped tokens [1]. This marks a pivotal shift in Bitcoin's development, expanding its functionality beyond simple asset transfers and into a more robust framework for decentralized finance (DeFi) and application development.

The BRC2.0 upgrade was developed by infrastructure firm Best In Slot, in collaboration with the pseudonymous creator of BRC-20, Domo, and the Layer 1 Foundation. The integration of EVM into the BRC-20 core indexer system enables the protocol to become Turing-complete, meaning it can execute complex computational tasks. By doing so, BRC2.0 allows developers to create dApps on Bitcoin while maintaining compatibility with Ethereum-based development tools, bridging the gap between the two major blockchain ecosystems [1].

The introduction of EVM into BRC-2.0 represents a significant step forward for Bitcoin-native token development. Unlike traditional Bitcoin transactions, which are primarily limited to value transfers, this upgrade allows for the execution of smart contracts directly on the Bitcoin layer. This capability opens the door to a wide range of financial applications, including lending, trading, and automated financial products, all operating within the security and decentralization of the Bitcoin network [2]. Developers can now leverage Ethereum’s well-established smart contract framework while remaining on Bitcoin’s base layer, a move that could attract further innovation to the Bitcoin space.

The BRC2.0 upgrade positions BRC-20 to compete with other Bitcoin token protocols, such as Runes, which lack programmability. By embedding EVM capabilities, BRC2.0 enables a more flexible and functional environment for developers, fostering the potential for a decentralized finance ecosystem on Bitcoin. According to Asher Corson, CIO of Unbroken Chain, a fund in the Ordinals space, BRC2.0 is well-positioned to support a growing DeFi ecosystem on Bitcoin, offering a more structured and scalable platform compared to existing standards [1].

The upgrade does not require the use of bridges or wrapped tokens, which have historically introduced security risks and complexity to cross-chain interactions. Instead, BRC2.0 offers native smart contract support within the Bitcoin ecosystem, ensuring that developers can build and deploy applications without compromising the network’s security. This approach aligns with the broader goal of combining Bitcoin’s strong security with the flexibility and composability of Ethereum-based smart contracts, according to Domo, the creator of BRC-20 [1].

The activation of BRC2.0 follows a period of growing interest in programmable Bitcoin protocols. Since its launch in 2023, BRC-20 has recorded over $3 billion in asset volume, primarily driven by speculative and meme-based tokens. The integration of EVM is expected to shift the focus from speculative trading toward functional applications, attracting a broader range of developers and users to the Bitcoin ecosystem. With the potential for dApps and DeFi tools now available, the protocol is likely to see increased adoption and innovation in the coming months.

Source: [1] BRC2.0 Upgrade Brings EVM and Smart Contracts Directly to Bitcoin (https://coincentral.com/brc2-0-upgrade-brings-evm-and-smart-contracts-directly-to-bitcoin/) [2] Ordinals tied-BRC20 protocol completes upgrade to “BRC2 ... (https://www.cryptopolitan.com/brc20-protocol-completes-upgrade-to-brc2-0/)