Discussing Bitcoin Rollups: The Best Scaling Solution?

Author | Callum@Web3CN.Pro

Bitcoin, as the earliest and most popular blockchain, has hundreds of thousands of transactions every day. However, at the beginning of Bitcoin's design, security was prioritized within its decentralized framework, which led to ignoring the issue of scalability and led people to regard Bitcoin as only a digital asset and a means of value storage.

Although the security and decentralization of Bitcoin have always been its advantages, its limited transaction speed and transaction scale have affected the development of Bitcoin ecology. In recent years, various solutions have emerged to solve this problem and allow builders to exploit the entire Bitcoin ecosystem. Scaling solutions are now the focus not only of other blockchain networks, but of Bitcoin as well.

In the article Exploring the BTC Layer 2 Track and Opportunities, we talked about why Bitcoin needs to expand, and introduced related Bitcoin Layer 2 solutions, such as: Lightning Network, side chains, etc.

In this article, we will focus on another solution for Bitcoin expansion: Rollups. Compared to the Lightning Network and sidechains, Rollups have the potential to improve Bitcoin's scalability, privacy, and programmability without sacrificing Bitcoin's core value and functionality as a peer-to-peer electronic cash system.

The Necessity of Bitcoin Rollup

Rollups are often associated with the Ethereum network. After transitioning to proof-of-stake in September 2022, the Ethereum blockchain becomes more centralized. Additionally, many Rollups actually rely on a centralized orderer of transactions on L2. Decentralization can indeed bring higher security, especially in Bitcoin, but with the development of Bitcoin, the contradiction between decentralization and the scale of computing power has become more and more prominent. The source of this contradiction is It lies in the increase in the number of users and the amount of calculation when verifying blocks, and the key to alleviating this contradiction is to improve the scalability of the blockchain.

The lightning network we talked about before uses technologies such as multi-signature and Hash time lock to store data under the chain and combine multiple transactions into one transaction processing, which can realize fast and cheap payment; the side chain is to create a separate Chain, without affecting the Bitcoin main chain, locks Bitcoin from the main chain, and then realizes the processing of a large number of transactions in the side chain, which can greatly improve the transaction speed without affecting the security of the Bitcoin main chain. Rollup is to upgrade the technical architecture or technical system of the Bitcoin network, and it will optimize data on the chain.

Rollup acts as a scaling solution for layer 1 blockchain networks. They move the transaction off-chain, where it is processed (usually at layer 2), and multiple transactions are bundled into a batch and sent back to the layer 1 chain. The smart contract then verifies the batch of transactions and updates the state of the blockchain.

This chart visually demonstrates the Bitcoin Rollup layering. In this example, there are two L2 Rollups: one dedicated to data availability and another dedicated to high-security payments and contracts. In addition to the L2 Data Availability Rollup, there are three L3 Rollups, each dedicated to a different use case: private p2p payments, financial contracts, and in-game asset ownership and transfer. Since L3 Rollups rely on L2 full nodes for data availability, they can be considered less secure than L2 Rollups that rely on Bitcoin L1 full nodes for data availability security.

Rollups are becoming more and more popular because they increase transaction throughput while reducing transaction costs. That's because Rollup means that blockchains don't need to process thousands of transactions individually, they technically only need to process one transaction. This is especially useful for dApps, which require frequent and fast transactions to function effectively. This is why Rollup is considered a viable scaling solution for blockchains like Bitcoin.

Currently, the types of Bitcoin Rollup mainly include ZK Rollup and Sovereign Rollup.

Application of ZK Rollup on Bitcoin

ZK Rollup

ZK Rollup uses cryptographic "proofs of validity" to ensure that new Rollup blocks follow the rules of the Rollup protocol. Every time a Rollup block producer creates a valid Rollup block, the block producer submits a state update transaction to the parent chain. Rollup state update transactions contain data about each state transition in the Rollup block, apply the new Rollup state root after the state transition in the block, and prove data availability and validity proof that the new Rollup state root is a valid update confirmed to the parent chain The last valid Rollup state root, only the state update transaction with a valid proof can successfully advance the Rollup state after confirmation.

ZK Rollup packages the transaction data into the main network, and at the same time submits a validity certificate to prove that these transactions are valid. When receiving these transactions, it will directly verify these validity certificates. If there is no problem with the certificate, it means These transactions are valid, and users do not need to wait any longer when withdrawing assets.

In ZK Rollup, the user reproduces and verifies all state changes based on the packaged data, but ZK Rollup publishes less data, and only needs to publish the minimum data required to reconstruct the account balance and the latest state, so that ZK Rollup can Processing more transactions at the same time, less computing and storage resources included on the main chain also reduces congestion on the chain, and the speed is also reduced because there is no backlog of transaction data, resulting in faster and cheaper transaction costs on the chain.

ZK Rollup's Extension Improvements to Bitcoin

ZK Rollup improves throughput. As more and more transactions on the Bitcoin network need to be proven valid at each Rollup layer, the difficulty of creating the necessary proof of validity increases. ZK Rollup's solution to the computation required to create these proofs is to parallelize them using recursive proof composition. Recursion is essentially "proving the validity of a proof", so many computers can prove the validity of different transactions, and then these proofs can eventually be combined into a single proof, allowing multiple computers to scale horizontally at the same time, thus helping to prove a transaction effectiveness. Both SNARK and STARK proofs can implement trustless recursive proof combinations.

In terms of application, this recursive proof will allow the ZK Rollup account model to compress the second-tier transactions, improve scalability by increasing the number of transactions, and the extra transaction capacity brought can be used to support more Lightning Network transactions, which can be increased to self-host The number of users who join and use the Lightning Network in a way that also expands the Lightning Network.

Sovereign Rollups on Bitcoin

Sovereign rollups

Sovereign Rollups are different from the current Rollup design. In the past, both OP Rollup and ZK Rollup needed to use smart contracts to confirm the execution of Rollups, but Sovereign Rollups do not require smart contracts or a settlement layer, hence the name "Sovereign" .

Observing OP and ZK Rollup, they tend to use L1 as data availability layer and consensus layer. However, Sovereign Rollup only uses layer 1 for data availability, ensuring they have a more direct connection to the base layer. A Sovereign Rollup differs from a common Rollup in that it has a fork selection rule that allows it to fork independently of its base layer. Instead, a normal Rollup will delegate its fork choice to its settlement layer, as it needs to ensure the correctness of the Rollup.

At its core, Sovereign Rollup is a blockchain that publishes its transactions to the data availability layer for consensus and data availability. The Data Availability Layer does not ensure that Sovereign Rollup transactions are correct. It just sorts the transactions and checks if they are available. Previous OP and ZK Rollups relied on Ethereum smart contracts to check that their transactions were correct, usually through fraud or proof of validity. In Sovereign Rollup, the node determines whether the transaction is correct. Its node will download all transactions and check whether they are valid. If the transaction is invalid, the transaction will be rejected.

Sovereign Rollup Scaling Improvements to Bitcoin

Sovereign Rollup is currently the most popular solution in Bitcoin Rollup. The main difference between it and ZK Rollup is that Sovereign Rollup is independent of the main network. ZK Rollup uses the main network as the data availability layer and settlement layer. The relevant data will not only be stored on the main network, but the transaction will also be verified by the smart contract on the main network, while Sovereign Rollup only uses one layer of the blockchain as the data availability layer , but does not use a layer to perform settlement. Therefore, for Bitcoin with limited computing power on the main network, this solution will be more friendly than ZK Rollup.

In this solution, using Rollup's modular framework, developers can insert a custom execution layer and data availability layer, Sovereign Rollup manages its own execution and settlement, while transferring consensus and data availability to the Bitcoin layer 1 main network . This solution does not require smart contracts or use the settlement layer for Rollup verification. The second layer is not affected by the attack on the main network of the first layer, and has its own consensus, which is more scalable.

In terms of application, Sovereign Rollup is more like a kind of RaaS in the future, using the data availability of Bitcoin, developers can create Rollup with any execution environment, inheriting the data availability guarantee and security guarantee of Bitcoin. For example, Rollkit, the modular Rollup framework product of the modular blockchain Celestia, can run EVM on Bitcoin as Rollkit Sovereign Rollup by integrating the Bitcoin Sovereign Rollup data availability layer, expanding the application of Rollup and helping Bitcoin open Broader ecological market.

Summarize

In the ZK Rollup scheme, its security strongly depends on its relationship with its main chain. Various applications on ZK Rollups will be able to inherit the decentralization and security of the Bitcoin network and improve the scalability of the Bitcoin network economic model question. This relationship solves for Rollup two key features that other "off-chain" protocols lack: inherited double-spending security and secure two-way bridging. While the benefits it can bring to Bitcoin include increased transaction throughput, better transaction privacy, and greater flexibility, these advantages are not without cost or risk, as it also entails Bitcoin software updates and consensus changes. risks of.

In the Sovereign Rollup scheme, it has its own consensus, can run independently of a layer of blockchain, can define its own transaction verification and settlement rules, and has higher autonomy. But it is this independence that also loses a layer of blockchain security to a certain extent, and due to the separate consensus mechanism, implementing Sovereign Rollup upgrades may be complicated. The current development of Sovereign Rollup is still in the early stage. With the research and deepening of this field, how the future technology will develop to build its security also deserves our follow-up attention.

The development around Rollup proves that Bitcoin can be the underlying chain for more operations than ever before. In general, whether it is on Bitcoin or any other L1, Rollup changes the way we perceive on-chain transaction data, proof verification, and on-chain transactions involving large amounts of data, driving how we store, read and utilize on-chain The latest developments in the discussion of data, which in turn provides another dimension to the Bitcoin scalability discussion, especially as developers try to create a complete ecological economy on the Bitcoin blockchain. Rollups are still in their infancy, however, their potential impact is promising.

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