Foreword

The explosion of Bitcoin's inscription directly ignited the inscription on the popular EVM chain, but the author believes that the inscription in the EVM ecosystem is only the overflow effect brought by Bitcoin's inscription, and truly valuable assets will appear in the Bitcoin ecosystem.

Bitcoin's well-known smart contract layer RGB has launched its first inscription asset: $RGBS. It is the first tradable inscription asset on RGB, issued by the BitRGB platform, and users can trade it on the BitRGB platform. The most valuable assets are always at the forefront of the race, and $RGBS on BitRGB is undoubtedly worth paying attention to and researching.

RGB Protocol Background

Given that RGBS is the first inscription asset issued on BitRGB, a platform for asset issuance based on RGB, it is necessary to mention the RGB protocol. The official definition of the RGB protocol is the smart contract layer of Bitcoin. As the most promising and highly sought-after Bitcoin smart contract solution in the Bitcoin ecosystem, RGB was launched by the LNP/BP technical team with a geek spirit, and its founder is Maxim Orlovsky. RGB has received support from institutions such as Bitfinex and Fulgur Ventures.

BitRGB is based on the RGB architecture, which fully inherits the high performance and scalability of the RGB protocol. $RGBS, as the first inscription asset on RGB, will carry the huge traffic endowed by it. $RGBS has the opportunity to become the mainstream Bitcoin ecological asset following BRC20 inscription assets, leading the direction of new Bitcoin asset narrative.

According to official news from BitRGB, $RGBS early casting is open to whitelist users, and community members who join the official DC and complete the Zealy task will have the opportunity to obtain whitelist qualifications.

BitRGB Solution

BitRGB emerged in the above context, positioning itself as an asset management platform based on the open-source RGB protocol. Its aim is to address the scalability and limited application scenarios faced by BRC20. By introducing assets in the more scalable RGB20 format, BitRGB expands the application scenarios of assets and becomes the next growth driver for the development of the Bitcoin ecosystem.

1) Core Features

BitRGB inherits the powerful features of the RGB open source protocol. RGB is an open source protocol focused on Bitcoin smart contracts, proposing core concepts such as one-time sealing, client verification, privacy-protected blinded UTXOs & Bulletproof. Based on these concepts, BitRGB aims to become the first Bitcoin asset management platform in the Bitcoin ecosystem that is both scalable, programmable, and privacy-protected.

One-time sealing:

BitRGB inherits the concept of one-time sealing from the RGB protocol, ensuring that an asset or data is only used or locked once. Since a Bitcoin UTXO can only be spent once, a Bitcoin UTXO can be seen as a one-time seal. The specific workflow is as follows: 1) The asset issuer creates a new asset in the client, generates a one-time seal and a transaction commitment, at this time the asset belongs to a Bitcoin UTXO, that is, this UTXO owns the ownership of the new asset; 2) The issuer anchors the new asset to the Bitcoin network by embedding the transaction commitment into the Bitcoin UTXO; 3) The asset receiver verifies the validity of the asset through the verification of the transaction commitment and one-time sealing; 4) After the transaction is verified as valid, the asset is transferred, the old one-time seal is destroyed, a new one-time seal is generated, and the transaction commitment and transaction data are anchored in the Bitcoin network.

Client verification:

Unlike Bitcoin, which requires every node to verify all transactions through global consensus, global consensus means that nodes need to continuously download and verify all transaction information in blocks and memory pools, leading to privacy leaks and high transaction costs. BitRGB uses client-side verification to ensure the validity of transactions, requiring only bilateral consensus between the asset sender and receiver, meaning that transaction content data is only transmitted between the sender and receiver of the transaction, while the content is stored off-chain, and the data commitment is on-chain. Users verify the blockchain data when receiving it to ensure its validity.

Privacy Protection: Blinding UTXOs & Bulletproof

In order to allow the asset recipient to obtain additional privacy attributes from the sender, BitRGB uses blinded UTXOs as the only output points. This means that the asset recipient can achieve privacy protection by providing blinded UTXOs to the sender. The format of blinded UTXOs is concatenated by UTXO and a random blinding secret hash.

In addition, in order to hide the specific amount of each transaction conversion and prevent it from appearing in the transaction history of assets, RGB uses the zero-knowledge mechanism Bulletproof developed by Blockstream. With Bulletproof, users can obtain privacy from the future asset owner when verifying transactions. Although they will be able to see all UTXOs that previously owned the assets, they will not be able to accurately view how much was transferred in each state transition, thus achieving privacy protection of asset status.

2) The Impossible Triangle of Breaking Through Bitcoin's Scalability

The outbreak of Ordinals has also given birth to a lot of asset issuance protocols. The Bitcoin ecosystem is not lacking in asset issuance protocols, but what is lacking is the implementation of smart contracts and scalability. Bitcoin's scalability is facing an impossible triangle: decentralization, scalability, and Turing completeness cannot be achieved simultaneously.

As the leader of the Ordinal ecosystem, BRC20 has brought a lot of traffic to the Bitcoin ecosystem, but it does not have Turing completeness and cannot realize the application scenarios of smart contracts. In addition, BRC20 heavily relies on centralized indexing to parse data, which poses significant centralization risks.

Bitcoin sidechains/layer 2 solutions like Stacks can support the implementation of smart contracts, and their EVM compatibility allows for convenient migration of Ethereum applications. However, they commonly face centralization issues.

bitRGB inherits the characteristics of the RGB protocol, which can effectively break through the impossible triangle of Bitcoin expansion, while meeting the requirements of Turing completeness, decentralization, and scalability.

3) Diversified Smart Contract Scenarios

BitRGB's initial positioning is a Bitcoin asset management platform, with core functions including the issuance and trading of Bitcoin assets, among other scenarios. However, it is not limited to this, and BitRGB will continuously introduce smart contract scenarios in iterative upgrades to meet the diverse needs of users.

Currently, the Bitcoin ecosystem asset issuance protocol is rampant, with a variety of asset types, but there is a serious lack of application scenarios based on assets. The development of the entire ecosystem relies on the user FOMO sentiment brought by wealth creation benefits, and is not sustainable in the long term. In the future era of multi-asset Bitcoin, the second wave of explosive growth in the Bitcoin ecosystem will require diversified application scenarios. The realization of diversified application scenarios depends on the support of smart contracts. Ordinals do not have the property of Turing completeness, so they cannot break through this bottleneck limitation.

BitGB has implemented the native support for smart contract scenarios, providing potential empowerment scenarios for its assets; BitGB is also a very promising stablecoin issuance platform. With stablecoins as the foundation for ecological development, BitGB will promote the development of high-frequency payments, Defi, lending, NFT, and other fields, expanding the diversified application scenarios of the Bitcoin ecosystem.

4) Potential Challenges of BitRGB

BitRGB has pointed out an efficient and feasible path to break through the impossible triangle of Bitcoin expansion, but there are still some challenges in the process of striving towards this direction:

1. The development of the ecosystem is still in its very early stages.

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