What is the narrative surrounding BitcoinOS and Cardano? Is it a DeFi layer for Bitcoin, is it a bridge, or is it just another layer 2 saturating the crypto space? Join us today as we discuss topics that include:
- What is BitcoinOS?
- How does this work on Cardano?
- Why Cardano?
- Which chains will be first?
- What makes BitcoinOS different?
Don't forget to check out the informative video on our homepage, curated by Cardano with Paul highlighting BitcoinOS, starring Edan Yago, CEO and Co-Founder of BitcoinOS. If you missed this weekly video rotation, below is the YouTube hyperlink.
https://www.youtube.com/watch?v=ZSdDW5hQbJk&t=98s
>>> What is BitcoinOS?
Let's start with operating systems, what are they and how are they used? An operating system (OS) is a software program that manages a computer's hardware resources, controlling how information flows between the processor and other devices... common operating systems include Microsoft Windows, Mac OS, and Android.
So what is BitcoinOS, or Bitcoin Operating System? With BitcoinOS, we now have the ability to take thousands of transactions and compile them into a Zero Knowledge (ZK) proof writing them on Bitcoin, which allows Bitcoin to then execute transactions on the basis of that computation (mathematical calculation). BitcoinOS essentially turns Bitcoin into a programmable ledger where any computation can be utilized on Bitcoin. There are several areas that stand to benefit from this, including Privacy, RWA's on Bitcoin, Memecoins on Bitcoin, Bitcoin backed stablecoins, etc. If it can recieve data from blockchains, it can execute transactions on Bitcoin, on the basis of smart contracts that are written on Cardano. So what does all of this mean? Well, the big idea here is that BitcoinOS is promoting unification within the crypto space, and interoperability between chains. Interoperability isn't just a crypto term by the way, this term is commonly used in software & technology. Interoperability is important because it allows systems to seamlessly communicate and share data within eachother which is significantly important for industries like Healthcare, Telecommunications, Finance, Software/Hardware, IOT, etc.
Let's discuss an example and say that you have a lending platform on Cardano, someone comes in with Bitcoin and sends it to Cardano blockchain, once this happens a smart contract on Bitcoin locks these funds and shoots the proof over to Cardano, it puts your Bitcoin into a smart contract which will allow you to borrow against it. Once the loan is paid in full, the smart contract will automatically unlock your funds being used as collateral.
On the topic of lending/borrowing, has anyone else ever tried lending platforms on Cardano? If not, scroll over to our dApps tab>Lending and Borrowing, here you will find all of the reliable lending and borrowing applications that have successfully been built on the Cardano blockchain. Am I the only one that's discovered this infinite access to money glitch? Zero credit checks, and you recieve the loan in a matter of minutes. That's right, minutes. (Candidly, the degen in me borrowed $1,500 worth of DJED, and threw it all back into Cardano during its most recent dip - this process, which I was unfamiliar with took me only 20 minutes from start to finish.) Compare this to the existing and archaic process behind receiving a loan from the bank which can take several days to even weeks in some cases. How frustrating is it that the people who typically need loans the most, oftentimes don't have access to them due to poor credit? You can thank our monopolistic banking system that runs the world for this - I digress, we'll save that for another blog post, back to BitcoinOS and Cardano...
Below is a hyperlink to a free 6-minute tutorial curated specifically for you by the Liqwid Finance team, it's very clear and concise, we highly recommend that you take a look if you will be participating in any lending & borrowing on the Cardano blockchain. Enjoy!
https://www.youtube.com/watch?v=Zs9eKlxpyvQ
>>> How does BitcoinOS work on Cardano?
There are several, more sophisticated ways in which it can be used, but lending and borrowing is the simplest explanation for this exercise, and will likely become the most common way to drive adoption for BitcoinOS. Here's how it works, Bitcoin funds get locked up on Bitcoin with no new token issued, the stablecoin that is borrowed is then issued programmatically based on instructions that it receives from Cardano, on Bitcoin. This means that all of the transactional activity and UX/UI lies on Bitcoin, while the "brain" itself lives on Cardano.
>>> Why Cardano?
Yago mentions that BitcoinOS emerged from the culmination of various projects. One of which was a project called Sovereign, that in some ways pioneered Bitcoin DeFi projects at scale with a large community supporting it and to this day continues to innovate. As they were building this out, over 100+ projects sprung up out of nowhere with an interest in becoming Bitcoin layer 2's that could verify ZK proofs on Bitcoin. He also goes on to mention that Cardano has been in the crypto space for a number of years, aligns with the long term vision of Bitcoin, it's eUTxO based, it's the largest eUTxO smart contract platform in the world, and has a ton of developers with a deep understanding of eUTxO model and Bitcoin.
>>> Which chains will be utilizing this?
According to Yago, the founder of BitcoinOS while it's not yet ready for production it is ready for testing and integration and they have have been connecting with several teams on the Cardano side that include the likes of Emergo, Fluid Tokens, Maestro, etc.
>>> What makes BitcoinOS different?
Bitcoin has proven itself extremely valuable to large scale, traditional financial institutions but is held back by the notion that DeFi is often associated with gambling and is simply speculative. By continuing to build and innovate on Bitcoin we can escape this bubble that we're stuck in as it relates to DeFi only doing speculative casino-like things, and actually offer programmable financial services with real world value to assets built on Bitcoin (including BTC). Yago mentions that blockchains are struggling to find narratives alongside Bitcoin, whereas Cardano has matured and is well positioned, actively making strides towards seamlessly integrating into Bitcoin and providing users with tools and services that benefit the entire ecosystem.