vincent0x.eth 🔑

Internet Computer Protocol (ICP): Everything you need to know tl;dr ICP is a Bitcoin sidechain that provides fantastic protocol primitives for building Bitcoin applications. 1. Bitcoin light node running fully onchain (UTXOs, balances, block headers) 2. Threshold signing subnets (ECDSA, Schnorr) to sign Bitcoin and Taproot transactions 3. Bitcoin bridge to leverage BTC on ICP (ckBTC) 4. Fast finality (2 seconds) 5. Affordable onchain smart contract storage ($5/GB/year) 6. WASM-based, so devs can use TypeScript, Python, or Rust for smart contract languages 7. Host websites directly from your smart contract (full stack DAOs) 8. No gas fees or network fees for users 9. Decentralized oracles and indexers 10. Onchain recurring automated processes - Now let’s dive deeper into what all of this means - 0. Bitcoin Sidechain ICP has a separate consensus model and a separate token, making it a Bitcoin sidechain (using the most general form of the definition). So you can compare it to Stacks, Rootstock, Liquid, Fractal Bitcoin, Arch, and honestly up to this point, any of the Bitcoin L2s (since we don’t actually have any true L2s on Bitcoin yet other than the Lightning Network). 1. Bitcoin Light Node Running Fully Onchain ICP has a Bitcoin light node running full onchain. This means you can retrieve the UTXOs held by an address, the balance of an address, or get block headers directly through a smart contract call. This light node has a network of nodes that pull data from multiple trusted Bitcoin full nodes, run the data through a consensus process, and then save the data onchain. This is a more decentralized process of getting Bitcoin data onto a sidechain. 2. Threshold Signing Subnets ICP has an ECDSA signing subnet and a Schnorr signing subnet. This means that smart contracts on ICP can own Bitcoin addresses, sign L1 Bitcoin transactions directly, and can programmatically control Bitcoin in a more decentralized way. These signing subnets can power super-charged DLCs, create bridges for Bitcoin assets (Bitcoin, Ordinals, BRC-20, Runes, TAP, etc), or interact more deeply with Taproot transactions. You can also interact directly with other ECDSA chains as well (ETH, Base, Blast, Arbitrum, Optimism) or will soon be able to interact with EDDSA chains (Solana, Cosmos). This means you can leverage this tech to bridge BRC-20s to ETH, or bridge Runes to Solana, etc. 3. Bitcoin Bridge ckBTC is the wrapped version of Bitcoin on ICP. Users deposit Bitcoin into an ECDSA threshold signing subnet Bitcoin address, then after 6 confirmations ckBTC is minted to the destination account of your choosing. ckBTC has fast finality (2 second transfers) and only costs 10 sats per transfer (the fee is paid directly in ckBTC). We can also use threshold signing for Ordinals bridging, BRC-20 bridging, Runes bridging, or bridging for other meta-protocols. 4. Fast Finality ICP has a subnet model for scalability. This means there are 13 geographically distributed nodes in each subnet (some have more nodes for additional security) and you only do consensus within your subnet. This means you get 2 second finality for smart contracts, but also means you lose global state verification (the tradeoff of the fast subnet model). 5. Affordable Onchain Smart Contract Storage Every smart contract on ICP can store up to 400GB of data. This data is native smart contract data, meaning you can easily and directly access the data straight from your smart contract without calling out to a data provider service like IPFS or Arweave. The cost is $5/GB/year for this smart contract data storage. This means you can store videos, high res images, or 3D models directly onchain. 6. WASM-Based WASM based means developers can build smart contracts in TypeScript, Python, or Rust (also Motoko, which is a proprietary language built for ICP smart contracts, similar to TypeScript). This also means you can pull in existing Rust/TS/Python libraries to build smart contracts on ICP. 7. Host Websites from your Smart Contract ICP smart contracts can natively host frontend websites. This means you can build a fully decentralized full-stack application on ICP (backend smart contracts, assets fully onchain, frontend hosted from your smart contract, backend APIs hosted in your smart contract). This means you could deploy a Bitcoin full node on ICP and then host a decentralized Bitcoin explorer directly from a smart contract (nobody has done this yet, but it is possible right now, and if you want to work on this let me know). 8. No Gas Fees for Users ICP uses a reverse gas model, which just means all transactions are sponsored by default. Developers pay the costs for compute, hosting, and storage, and users don’t have to worry about paying fees. This makes it really easy to build fantastic user experiences because users don’t have to acquire any tokens to pay gas/network fees. This is more practical on ICP because fees are so small, so abstracting them away from the user is the best path for developers. 9. Decentralized Oracles and Indexers ICP smart contracts can make http calls directly from the smart contract. This means that you can build your own oracles. If you want to pull in price feeds, sports data, election results, or floor prices you can do it all in your own custom-built oracle on ICP. You have flexibility to make it as robust and decentralized as you want. In addition to oracles, you can also build decentralized indexers for Bitcoin meta-protocols. I already know of a team running a decentralized Runes indexer on ICP. This means the indexer code is running in a decentralized smart contract. Centralized indexers is one of the top tradeoffs for meta-protocols. You essentially get unlimited compute, but at the cost of doing all of the compute off-chain in a centralized indexer. 10. Onchain Recurring Automated Processes ICP smart contracts have the ability to schedule cron jobs (or recurring processes) directly onchain. This means you can build chain hooks that watch for certain events on Bitcoin, and then respond in some fashion with your smart contract code. So you could watch the Bitcoin blockchain for someone to inscribe a specific Ordinal, and then you could programmatically send them a Runes token for inscribing the Ordinal. This would all happen in a decentralized onchain smart contract. Summary ICP is a general purpose protocol trying to be the decentralized web services blockchain, providing compute, hosting, and storage in a blockchain environment. ICP is a Bitcoin sidechain because you can bridge Bitcoin, Ordinals, Runes, and BRC-20 to ICP, you can sign Bitcoin L1 transactions natively from ICP smart contracts, and you can pull Bitcoin data natively from the onchain Bitcoin light node using smart contract calls. ICP has fantastic Bitcoin integration tech (threshold signing, Bitcoin bridge, Ordinals bridge, Bitcoin light node, oracles, decentralized indexers) that makes it really easy for developers to build Bitcoin applications. Disclosure: I’ve been building on ICP since 2021. I’m CEO of Bioniq, an Ordinals marketplace and launchpad that leverages all of the tech I’ve mentioned above.