The creators of the Bitcoin sidechain have released the new ‘unlicensed’ version BitVM2.

The creators of the Bitcoin scaling solution Bitcoin Virtual Machine (BitVM) have launched the second iteration of the blockchain, named “BitVM2”, and the BitVM Bridge now offers “major improvements” to the main system.

In an August 15th post to X, BitVM founder Alexey Zamyatin shared an overview of a new white paper introducing BitVM2 and a new framework for how BitVM Bridge works.

Robin Linus, project leader of ZeroSync and creator of BitVM, unveiled BitVM in early October to bring off-chain smart contracts to the Bitcoin network without the need for a soft fork.

One of the main improvements of the new version will now be “permissionless”, meaning anyone can challenge suspicious transactions, only three transactions are needed to complete a challenge.

The previous version of BitVM required up to 70 transactions to complete a challenge, and only a small number of specific entities could submit challenge requests.

What does BitVM do?

Overall, the main focus of BitVM2 is to enable encapsulation – a separate network built on top of Bitcoin – that can process transactions more efficiently but with the same security as the original Bitcoin network.

The BitVM Bridge allows users to transfer and withdraw bitcoins to and from the wallet with short lock-up times and minimal upfront capital requirements.

The paper was led by ZeroZync project leader Robin Linus and co-authors Zamyatin, Lucas Aumair, Andrea Pelosi, Zeta Avricciotti and Matteo Maffei.

BitVM published a white paper on October 9 entitled “BitVM: Compute Anything on Bitcoin” – Enabling Turing-complete Bitcoin Contracts Without Changing Bitcoin's Consensus Rules.

Related: Bitcoin needs DeFi, consumer apps for mass adoption — L2 devs

The paper's release sparked a wave of development on the Bitcoin network, with Bitcoin-based layer-2 networks and coils emerging in the wake.

The developers of the BitVM project have repeatedly stated that BitVM is intended to scale the Bitcoin network rather than start decentralized finance (DeFi) applications on top of Bitcoin like Ethereum.

Anonymous BitVM developer Supertestnet told Cointelegraph in October 2023 that BitVM's overall goal is to increase Bitcoin's scalability above all else.

“The real killer app is streamlining Bitcoin. [Robin Linus isn’t] Big fan of smart contracts. He is not a big fan of increasing Bitcoin's transparency. Bitcoin is very interested in making it able to handle millions of transactions per second.

He says he doesn't want BitVM to be flooded with EVM-like tokens, as it could attract bad actors to Bitcoin, and says building a decentralized exchange on top of Bitcoin is “the last step.”

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