Bitcoin <> Internet Computer: The Integration That Will Give Superpowers To Bitcoin

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Bitcoin <> Internet Computer: The Integration That Will Give Superpowers To Bitcoin
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Imagine you could transfer Bitcoin for low fees at web speed and maximum security. You might not think it's possible, however, you will soon be able to do it and the Internet Computer will make it happen thanks to its revolutionary Chain Key Cryptography.

The Internet Computer will integrate with Bitcoin directly without the need for a bridge.

Although this is monumental news, that’s not all! The Internet Computer will also enable Bitcoin to have smart contracts!

How The Internet Computer Makes Bitcoin Better

Bitcoin is a cryptocurrency that hardly needs any introduction. It is the first decentralized cryptocurrency created by Satoshi Nakamoto (name used by the pseudonymous person or people who developed Bitcoin) in 2008.

Released as open-source software since 2009, its technology has been a revolutionary idea because it serves as an alternative peer-to-peer payment system and allows its users to regain control by performing transactions without the need of a trusted third party.

Bitcoin transactions are verified by a network of nodes. A public distributed ledger, called “blockchain” is shared among all users and records information about every single transaction. Node owners, called miners, receive fees per transaction in the form of new bitcoins.

Blockchain technology has many use cases: social media, data storage, etc. The applications that use this wonderful technology have the advantage of being decentralized. In other words, no third-party control.

Due to technical weaknesses in the Bitcoin software, nowadays it plays the role of digital gold and new projects are emerging that will increase the immense potential of blockchain technology. The main technical flaws are summarized below:


Bitcoin typically takes roughly 30-60 minutes to finalize transactions. The issue with most blockchain technology is that it’s very slow. Ethereum, launched in 2015, using an updated form of Proof-of-Work to speed things up, but it is still far from achieving the web speed that’s needed to deliver compelling online user experiences.

The Internet Computer solves this problem. It is the world’s first blockchain that runs at web speed.


Since its launch, Bitcoin’s scalability has been an issue within its community because it can't scale well enough to be used as a global currency. The reason is that the network is limited in how many blocks of transaction records can be processed in a given time frame because of the size limitations imposed by Bitcoin itself. New blocks are produced around every 10 minutes, and they’re limited to 1 megabyte in size. As a result, the Bitcoin network has never managed to process more than eight transactions per second.

The Internet Computer Blockchain also resolves this problem without loss of security:

At the moment of writing this article, the block rate is 20.2 blocks per second and rising. Check the current rate for yourself on or

· High Transaction Fees:

Bitcoin and Ethereum fees are paid to miners to cover the computational costs of confirming secure transactions. The size of the fee depends on the size of the transaction in bytes and on supply and demand because these blockchains have limited capacity.

Bitcoin and Ethereum fee transactions reached historical highs ($62.77 and $69.92 respectively), coinciding with the market rally that took place in the first half of 2021. Layer 2 solutions attempt to address high transactions fees but they are far from perfect.

Unlike other blockchains, Internet Computer subnets do not use a Proof of Work or Proof of Stake consensus mechanism to process transactions. Node providers earn rewards by providing computational capacity. Furthermore, the Internet Computer has a fixed transaction fee of 0.0001 ICP (less than 1 cent USD). It doesn't depend on the size of the transaction or the current supply and demand.

The good news is that the virtues of the Internet Computer can be extrapolated to other blockchains, such as Bitcoin and Ethereum when integrated.

Bitcoin as a store of value

Despite high volatility throughout its history, Bitcoin is the most popular and highly valued digital asset due to the status of being the first decentralized cryptocurrency ever created.

Currently, despite the great advances that have been made in blockchain technology, Bitcoin has been relegated to a store of value due to its outdated software and other disadvantages that I mentioned in the previous section.

Nonetheless, it has the perfect properties to be considered as a great store of value:

  • Its supply is limited and finite. For this reason, only 21 million bitcoins will be produced by 2050.
  • Its fungibility allows the exchange of goods in multiple locations and markets.
  • No need for third parties.
  • Maximum security and easily storable (cold and hot wallets).

Each token has its own supply but these properties extend to other blockchain networks which are used for something other than as a store of value.

How ICP will integrate Bitcoin

Dominic Williams, the Dfinity founder, published that the Internet Computer is working to integrate its decentralized blockchain network with Bitcoin. In fact, he announced that it is one of the major new Internet Computer blockchain advances coming.

Bitcoin integration on the Internet Computer is made possible by Chain Key Cryptography (a set of cryptographic protocols that orchestrate IC nodes) and Canisters (an evolution of smart contracts).

Additionally, the Internet Computer has the architecture to make it possible. Its nodes, which are run by independent parties in independent data centers around the world, have a minimum standard of technical specifications for each machine to ensure a minimum level of computational efficiency.

IC nodes will interact themselves with Bitcoin nodes and collect blocks

The networks will directly integrate , without bridges (opposite to what DeFi chains do). Finalized blocks will be included in Internet Computer blocks. The nodes only accept valid finalized blocks that aggregate sufficient work and are buried by sufficient additional work/confirms.

Chain Key Cryptography will enable the Internet Computer to generate Bitcoin transactions. This set of cryptographic protocols will maintain, virtually, an infinite number of Bitcoin ECDSA keys.

Internet Computer smart contracts will send, receive and hold real bitcoin directly, not wrapped bitcoin. They have their own Bitcoin address and they can send bitcoin using a function call Bitcoin.send(...). When a smart contract sends bitcoin, the Internet Computer constructs the required Tx (Transaction). The protocol enlists multiple independent nodes to sign using a "threshold" ECDSA scheme. The Tx is passed directly to a Bitcoin node.

While the Internet Computer relies heavily upon BLS threshold cryptography (named after Dan Boneh, Ben Lynn, who works at the DFINITY Foundation, and Hovav Shacham) , the IC will introduce support for a threshold variant of ECDSA — the very cryptography scheme that secures Bitcoin and Ethereum balances and smart contracts. In essence, this will enable smart contracts on the Internet Computer to create Bitcoin and Ethereum transactions pertaining to public keys on those chains, without holding corresponding private keys (which will not even exist, and instead take the form of private key shares securely distributed across independent nodes).

When IC nodes scan the Bitcoin chain they look for UTXOs (unspent transaction outputs) that belong to smart contracts and mathematics allows the mapping to be done. Smart contracts can query their balance, and are notified about arriving bitcoin. Even though the nodes hosting the Internet Computer blockchain come & go, they can always sign Tx for smart contracts. It is possible through techniques such as NIDKG and "key resharing".

A revolutionary transformation is coming to Bitcoin

Bitcoin, Ethereum, and the Internet Computer networks will add value to each other. Other blockchains did not correctly identify that the issue that needed a solution was the World Computer problem, and took the route of attempting to create a better Ethereum (while doing "wrapped this and that"). ICP got the problem diagnosis right and focused on the real global problem. In fact, efforts are already underway to integrate Ethereum with the Internet Computer. Now the Trinity (Bitcoin, Ethereum, and ICP) is finally coming together.

"Cryptographic systems drawn from the Internet Computer’s underlying Chain Key cryptography will now be repurposed to enable its smart contracts to create Ethereum transactions. In the other direction, efforts are being made to mirror the entire Ethereum blockchain within Internet Computer smart contracts, which together will enable bi-directional calling between Ethereum and Internet Computer smart contracts, without slow expensive hubs or bridges. Ethereum dapps might use the Internet Computer to securely serve web experiences to users rather than relying on trusted cloud services such as Amazon Web Services, for example. What is clear is that the Internet Computer will now help make blockchain more interesting and valuable than ever before."

In the following post, Dominic Williams explains how easy it will be to complete a Bitcoin transaction via the Internet Computer:

The Internet Computer is a faster and more efficient blockchain with infinite capacity that servers interactive websites for full decentralization. It is the only blockchain that can host unlimited smart contracts.

Next stop, Ethereum Integration

The Internet Computer is providing solutions to the scaling challenges experienced by Ethereum while maintaining decentralization and security.

Dominic Williams, who was very close to the Ethereum project in 2014 and 2015, announced integration with the Ethereum ecosystem. The Internet Computer and Ethereum will be integrated to utilize novel Chain Key cryptography and the integrated smart contracts.

Ethereum smart contracts will directly call Internet Computer smart contracts, and vice versa. If those smart contracts can interoperate directly, it is possible to create secure decentralized loops, which are end-to-end blockchains. Furthermore, the entire system can be made autonomous, and placed under the control of governance tokens, such that the operators of DeFi websites do not become legal "owners" of such open services.

The integration will also provide a route for Ethereum dapps to solve their usability challenges through the application of Internet Identity.

Listen to the following podcast in which Arthur Falls interviews Dominic Williams on his Internet Computer Weekly show.

This interview is also available in video format.

For further details, see “Internet Computer <> Ethereum Integration Explained”.

Connect with the author: Twitter

  • Disclaimer: The views and opinions expressed on this website are solely those of the original author and other contributors. These views and opinions do not necessarily represent those of the Dfiinty Community staff and/or any/all contributors to this site.*


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