“What our systems do is verification, not computation … more powerful smart contracting in the world of Bitcoin will absolutely be a thing, I don't doubt.”
- Greg Maxwell, 2016
“Simple things should be simple, complex things should be possible.”
- Alan Kay
Alpen Labs originated from a deep reflection of our fondness for the internet. The internet stands as a testament to the potential for collective innovation in public networks that are permissionless, programmable, and composable through open protocols. During this reflection, we asked ourselves: how can we further expand the internet’s utility to the billions of users that it now connects?
Our search for answers brought us to the intersection of two ongoing revolutions: in money, through bitcoin, and in computing, through zero-knowledge proofs. At this intersection, we’re building scaling solutions to expand the utility and accessibility of freedom money for the internet.
Sovereign Money on a Decentralized Settlement System
Building on the groundwork laid by internet protocols to facilitate digital transmission of information, Satoshi Nakamoto launched the bitcoin protocol to facilitate digital transmission of value. This peer-to-peer protocol introduced the first ever money that could be owned as digital property and transacted securely.
Bitcoin has immense utility for the internet-connected world. As a currency that's immune to intervention and can be directly owned by individuals, bitcoin is free from many of the risks and pitfalls we associate with today's monetary systems, such as: unlimited printing of money, debanking, "too big to fail" institutions, and monetary surveillance states. The overpowering need of any community to share a common medium of exchange has repeatedly been abused by bureaucracies to strip that medium of its autonomy and security. However, autonomy and security are inherent in bitcoin's design — in both bitcoin, the money, and the protocol.
However, while bitcoin's autonomy and security become more apparent to the world every day, we see, even more clearly, the fundamental obstacles that are preventing people from joining bitcoin's monetary revolution: privacy, programmability, and scalability.
Without privacy, we inadvertently create a modern surveillance system. Without programmability, we hinder the creation of bitcoin-based financial systems and push users to platforms with trust assumptions that are far from ideal. Without scalability, we deprive people of self-custody and participation. We've now seen this firsthand with the tremendous rise of transaction fees in the bitcoin network, which has effectively prohibited new users from joining the network and many existing users from using the small amounts of bitcoin they own. Any fee over $0.1 per transaction effectively excludes most of the world from participating.
However, adding complexity and scale to bitcoin in the way other blockchains have chosen gravely risks depriving bitcoin of exactly what makes it so special: simplicity, neutrality, and immutability.
Private, Verifiable Computing with ZKPs
In 2022, while researching zero-knowledge cryptography (ZK), we reached a conclusion of great significance to bitcoin: ZK presents an unparalleled path for securely adding privacy, programmability, and scalability to bitcoin while preserving its sanctity. Occurring in parallel with bitcoin's monetary revolution is a technological revolution in computing driven by rapid advancements in zero-knowledge proofs (ZKPs). With ZKPs, we've entered an era of private, verifiable computation, where computers can instantly verify the integrity of each other’s state without compromising privacy or re-running computation.
For example, with ZKPs, a decentralized payments app (a global, open alternative to Venmo, Alipay and the like) can operate outside of a blockchain while cheaply proving to that blockchain that it has only performed valid transactions. Additionally, it doesn’t need to reveal the contents of those transactions for verification. In this model, blockchains extend to become verifiers of proofs in addition to verifiers of transactions.
The implications of such a technology are significant for bitcoin. ZK allows blockchains to specialize in verification. Today, we expect blockchains to simultaneously solve for execution as well (e.g. support Turing complete smart contracts). By removing the myriad complexities of execution from the "base layer," we allow blockchains to ossify as minimalistic, censorship-resistant, and highly decentralized structures providing cryptoeconomic trust. With its minimalist design, bitcoin will excel at extending its cryptoeconomic trust to secure applications that enable privacy, programmability, and scalability.
Cambrian Explosion of Bitcoin-Based Financial Systems
At the intersection of these two revolutions, there is potential to build a much more resilient, free, and prosperous world. Resilience comes from cryptographic guarantees. Freedom comes from sovereignty over your wealth. Prosperity comes from resilient mechanisms of coordination among free individuals. At this intersection, the bitcoin experiment has the potential to become the default value system of the world.
To provide the infrastructure to connect bitcoin, ZK and the outside world, our development focus has been on native scaling solutions for the past year. Native scaling models such as rollups differ significantly from earlier sidechain-based models which add the trust assumptions of another entire blockchain. Our first step towards this goal will be a ZK-enabled rollup ecosystem on bitcoin that settles natively through the bitcoin network and provides secure access to BTC.
In the long term, we believe that a confluence of ZK, native scaling solutions, and innovations on the base layer can bring forth private, scalable and programmable bitcoin-based payments and financial systems that are built directly on bitcoin. A few illustrative examples of these systems are:
- Flexible and easy to use wallets and vaults
- BTC-collateralized stablecoins
- Overcollateralized borrowing on BTC
- Hashrate futures for miners
- Applications that provide transparent and trust-minimized yield on BTC
Such applications on our rollup ecosystem would settle directly through bitcoin with their integrity verified using ZKPs. Additionally, builders would be able to create auxiliary systems (verifiable credentials, fiat stablecoins, etc.) that will be vital in expanding bitcoin’s adoption and interoperability with the world’s existing systems. The above confluence will make bitcoin a major force in expanding financial access and individual agency globally.
This is a grand vision for bitcoin and our entire space. To accomplish this, we've come together as a team of highly capable cryptographers, engineers, and entrepreneurs. However, we alone are not enough to fulfill this grand vision. So please consider this our invitation to you and the entire community: from builders & breakers to advocates & skeptics, engage with us at alpenlabs.io. To reach where we're going, we will need many more to lay tracks alongside us. ZK + Bitcoin.
