Bitcoin began as a peer-to-peer electronic cash system, focusing solely on secure transactions rather than programmability.
Over time, developers have found ways to expand Bitcoin’s functionality while keeping it secure and decentralized.
Through upgrades like Taproot and the emergence of layer-2 systems, Bitcoin now supports programmable contracts, decentralized finance, tokenization, and even NFTs.
This development puts Bitcoin in conversation with platforms like Ethereum, Polygon, and Solana, which were designed for programmable applications from the beginning.
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Smart contracts on Bitcoin
Bitcoin’s scripting language, called Bitcoin Script, is simple and Turing-incomplete by design.
It reduces complexity to avoid vulnerabilities. However, Taproot’s November 2021 upgrade introduced new cryptographic tools – Schnorr and Tapscript signatures – that made advanced spending terms easier and more private.
These changes allow multi-signature, time lock, and conditional payments settings to be expressed in more flexible ways.
Original and layered approaches
Bitcoin’s programmability now works on two levels.
Some contracts are run locally using Taproot and Script, while others are executed on external layers or sidechains that link their state to Bitcoin for settlement.
This dual model keeps Bitcoin secure at the base layer while allowing innovation at the upper layers.
Major platforms and frameworks on Bitcoin
Heaps
Stacks is a layer 2 network that provides smart contracts for Bitcoin.
It uses the language of clarity, designed for predictable and auditable behavior. Nakamoto’s upgrade in 2024 improved the back end and introduced sBTC, a two-way pegged asset that connects Bitcoin to the Stacks ecosystem.
Developers can create DeFi platforms, NFT marketplaces, and Web3 apps with Bitcoin final settlement.
Root (RSK)
Rootstock is an EVM-compatible sidechain launched in 2018.
It allows developers to deploy Ethereum-style smart contracts using Solidity, secured by a hybrid mechanism called PowPeg, which connects to Bitcoin through a two-way peg.
RSK is very popular with DeFi and tokenization platforms that want to leverage Bitcoin’s value base.
Liquid network
Liquid is a sidechain developed by Blockstream, with a focus on fast settlements and privacy.
It employs a consortium of trusted employees and uses secret transactions to hide transaction amounts and asset types.
It’s ideal for exchanges and organizations that require fast transfers with stronger privacy than the Bitcoin mainnet can provide.
Taproot assets and accelerator network
Taproot Assets (formerly Taro) allows assets to be created directly on Bitcoin using Taproot transactions.
These assets can then be transferred over the accelerated network for near-instantaneous, low-cost transactions.
This combination opens up the possibilities of stablecoins, token assets, and cross-border payments powered by Bitcoin.
Ordinal and runic
Ordinals and runes are protocols that allow data to be recorded on individual satoshis. Ordinals enables NFTs and digital collectibles on Bitcoin, while Runes, introduced in 2024, focuses on creating fungible tokens with minimal on-chain complexity.
Together they represent Bitcoin’s growing on-chain creativity.
Secret Log Contracts (DLCs)
DLC allows for conditional Bitcoin payouts based on real-world events.
They use cryptographic oracles that publish signatures corresponding to specific results.
Once the outcome is known, the contract is settled automatically and privately on-chain, enabling use cases such as betting markets, predictions and financial hedging.
Prediction Market Predictbase uses an oracle on the underlying network to settle bets.
RGB protocol
RGB is a client-side verification system for issuing and transferring assets.
Participants keep contract data and proofs, while the Bitcoin blockchain network stores only minimal commitments.
This design enhances privacy and scalability, allowing complex assets to be managed without overloading the network.
What these systems enable
Together, these layers enable a wide range of applications: DeFi on Stacks and RSK, crypto payments on Liquid, prediction markets through DLCs, instant settlement with Lightning, and NFTs or tokens via Ordinals and Runes.
Taproot Assets and RGB extend this to token economies and off-chain verification, all backed by Bitcoin’s unparalleled settlement guarantees.
How does Bitcoin’s approach compare?
Design philosophy
Bitcoin’s design prioritizes stability and security, while networks like Ethereum, Polygon, and Solana focus on flexibility and performance.
While Bitcoin contracts are less expressive, they benefit from a conservative code base and a stronger focus on verifiability.
Table: Comparison of Bitcoin’s blockchain ecosystem with other blockchains
| feature | Bitcoin (Tabrot, Stax, RSK) | Ethereum | ribbed | Solana |
|---|---|---|---|---|
| Consensus type | Proof of work (with layered extensions) | Proof of stake | Proof of Stake (Ethereum’s Layer 2 measurement) | Proof of history + proof of stake |
| Support for smart contracts | originally limited; Extended across side chains and layers | Native and very expressive | EVM compatible; Fast and low cost | Native, high-performance parallel runtime |
| Transaction speed | slow on L1; Fast on Lightning or sidechains | moderate; Expand through groups | Fast and low cost | Very fast, low latency |
| Security model | Highest level of base layer security | Secure but complex implementation | Inherits Ethereum security (for zk solutions) | High performance, slightly less decentralized |
| Scalability | The second layer and the side chains | Groups and roadmap sharing | PoS and zkEVM are highly scalable | Very scalable |
| Decentralization | Very high | High | moderate | moderate |
| Primary use cases | Settlement, DeFi via Stacks/RSK, NFTs via Ordinals | DeFi, NFTs, and general decentralized applications | DeFi, gaming, and metaverse applications | Real-time trading, gaming, and decentralized applications |
Interpretation of comparison
Bitcoin prioritizes decentralization and security over speed or flexibility.
Ethereum offers rich contract functionality but with higher complexity.
Polygon focuses on scalability and low fees, while Solana emphasizes speed and productivity. Each approach serves different priorities for developers and users.
Developer considerations
Security and trust
Bitcoin-based solutions differ in their trust models.
Stacks is based on Bitcoin blocks, Rootstock relies on combined mining and pegging, and Liquid uses federation. RGB and DLCs reduce third-party trust by keeping the state of the nodes private and local.
Tools and languages
Developers familiar with Solidity can use Rootstock.
Those who prefer predictable logic can use Clarity on Stacks.
Liquid supports secret tokenization workflows, while RGB provides maximum privacy and off-chain scalability. Ordinals and Runes are ideal for collectible or token projects that want the original Bitcoin source.
Performance and costs
Bitcoin’s main chain is still slow and sparse by design, but its sidechains and layers compensate with different strengths.
Lightning handles fast microtransactions, Rootstock and Stacks provide smart contract platforms, and Liquid enables fast confidential settlements.
Developers choose their suite based on the desired balance between speed, privacy, and trust.
Final thoughts
Bitcoin’s evolution from a simple payment system to a multi-layer, programmable network is reshaping how developers build secure, decentralized systems.
Each approach—Stacks for smart contracts, Rootstock for EVM compatibility, Liquid for privacy, and Taproot Assets for tokenization—demonstrates that innovation in Bitcoin is thriving, although in a more conservative and typical form than other chains.
For builders and investors who value long-term stability and verifiable settlement above all else, Bitcoin’s expanding ecosystem now provides a mature and secure foundation for the next generation of decentralized applications.