What exactly is blockchain integration, and how does it differ from a blockchain bridge? Here are the top 5 ways Bitcoin integration will supercharge ICP crypto.
What is Bitcoin integration?
You may have heard about the DFINITY Foundation's plan to integrate the ICP blockchain with Bitcoin. But what exactly is blockchain integration, and how does it differ from a blockchain bridge?
In the context of the Internet Computer (ICP), Bitcoin integration involves using Chain Key cryptography to assign each canister its own Bitcoin public key, thus directly integrating the Internet Computer blockchain with the Bitcoin network. In other words, smart contracts on the Internet Computer will be able to hold, send and receive their own Bitcoin. In contrast, a blockchain bridge is a separate, third-party protocol that connects two blockchains to enable interactions between them. Think of a bridge as a translation service mixed with a currency exchange center.
Is ICP Crypto part of the bridgeless future?
Blockchain bridges, for all of their advantages when it comes to interoperability across Web3, present significant security risks. For example, just last week, Binance confirmed it was hit by a $100 million USD blockchain bridge hack. In fact, blockchain bridge hackers have stolen an estimated $1.4 billion USD to date during this year alone. There is also the problem of transaction fees and other related financial and lag-time inconveniences. That's why the future of DeFi will probably be bridgeless and favor direct integration solutions. ICP will doubtless have an important role to play in this bridgeless future.
Top 5 Ways Bitcoin Integration will Supercharge ICP Crypto
- Bitcoin integration will bolster investor confidence - Bitcoin integration was originally scheduled for the end of 2021 Q1. While it is not unusual for blockchain roadmaps to encounter significant delays due to unforeseen technical challenges, the public rollout of Bitcoin integration will dispel doubts about ICP's amazing potential. When the Internet Computer follows through on its highly anticipated promise to bring smart contracts to Bitcoin, investors will know the Internet Computer will make good on its other promises too.
- Bitcoin needs interoperability with smart contracts to thrive - Bitcoin sold itself as digital gold and a safeguard against inflation. Neither has come to pass yet. To make a comeback, Bitcoin will need to overcome transaction processing challenges and incorporate the new features and innovations of more modern blockchains. ICP will provide that, enabling Bitcoin transactions at Web speed. At present, the Bitcoin blockchain can only process 7 transactions per second. In contrast, ICP can process 11,500 transactions per second. That's nearly 1,643 times as many transactions!
- ICP will be positioned to become the nexus of Web3 - ICP's Internet Computer is the highly anticipated backbone of Web3. Just like today's Internet, tomorrow's decentralized, user-owned and user-governed global network will need currency to facilitate the exchange of services and ideas. While ICP is valuable in its own right, it holds the potential to become the primary medium through which Bitcoin gets traded. Think of it like an ATM service stretched across the globe, allowing Web3 users to quickly and reliably access Bitcoin.
- Bitcoin integration is an important test case for other blockchain integrations - it's no secret that the DFINITY Foundation has its eyes set on Ethereum integration next. As integrations are added, DeFi will increasingly gravitate toward operating on the Internet Computer. Indeed, projects like Infinity Swap are already leading the charge.
- Bitcoin integration will incentivize the next generation of financial tool development - One of the greatest selling points of ICP is that developers can create software on it that can interact with existing Internet infrastructure. Bitcoin integration will allow for the inclusion of cryptocurrency transactions in application development from start to finish. Imagine the possibilities of coupling beam approaches to income with Bitcoin payments to compensate workers in real time rather than at the end of a week or a month!
Want to learn more about Bitcoin integration? Head over to the DFINITY Foundation's YouTube channel and dive in!
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