Original Article Title: "Starting from the Thunderbolt Network, Re-evaluating the Design Logic of the Bitcoin Lightning Network"

Original Article Author: Ac-Core, YBB Capital Researcher

1. Why Can't Bitcoin Buy Coffee?

When mentioning Bitcoin, most people first think of its "decentralized" and "immutable" attributes. However, when you actually try to use it to buy a cup of coffee, you quickly encounter an awkward problem: the transaction confirmation time is longer than waiting for the coffee, and sometimes the fee is even more expensive than the coffee. Assets on Bitcoin have remained "motionless" to this day—mainly relying on HODL, unable to be lent, combined, or interoperable.

Bitcoin's Script structure is extremely conservative, limiting most off-chain interaction scenarios. Its original design was not intended to process tens of thousands of transactions per second. However, the real demand is there—everyone hopes that Bitcoin can be used affordably, even if it's just to buy a game skin, watch a video, or tip someone, without having to wait for ten minutes.

2. Lightning Network: A Double-Edged Sword

Image Source: Cointelegraph

The Bitcoin main chain is like a highway, while the Lightning Network is like a toll express lane built next to it. Its core idea stems from a compromise on the efficiency of on-chain transactions: since on-chain transactions face speed bottlenecks, there is no longer an insistence on recording every transaction on the chain. Instead, it establishes exclusive "payment channels" between users to achieve high-frequency accounting. In the end, only the fund status at the channel's closure is synchronized with the blockchain. This mode is similar to friends taking turns to pay for meals each week—it's not immediate bank transfer after each meal but settling the bill collectively after ten meals. The Lightning Network is essentially a transaction network woven from tens of thousands of such payment channels.

However, this seemingly intricate system has revealed multiple dilemmas in practical applications. First is the high barrier to channel construction, where users need to lock funds in advance to establish a trading channel, meaning that to transact with any party, a dedicated channel connection must be set up in advance. Second is the complex routing challenge. Even if there is an indirect path A-C-B when users A and B lack a direct channel link, if the intermediary channel lacks funds or path nodes are unavailable, the transaction will still fail. Even more serious is the security risk; the system requires users to stay online to prevent the counterparty from submitting outdated transactions during channel closure, posing an unrealistic demand on the operational capabilities of ordinary users' devices.

Despite the Lightning Network having been operational for several years, these structural flaws have made its practical application always difficult to overcome bottlenecks. Public data shows that the current total locked funds in the entire Lightning Network remain at only about $100 million, which is almost marginalized in relation to the trillion-dollar market cap of the Bitcoin system. This has inevitably triggered industry contemplation: Can we build a more complete off-chain payment protocol to break through the current deadlock?

According to Chain Catcher's news on April 15, HSBC Bank revealed in an official press release that Bitcoin Thunderbolt is the most significant technological upgrade for Bitcoin in the past decade. The overall observation of Thunderbolt is more like "Lightning Network 2.0," but it is not just an upgrade; it is more like a reconstruction of the off-chain Bitcoin interaction paradigm.

Three, What Is the Thunderbolt Protocol

Image Source: Nubit | Bitcoin Thunderbolt

Bitcoin Thunderbolt is a soft fork upgrade based on the Bitcoin base layer. It is not a compromise solution relying on a second-layer network or cross-chain bridges, but rather a direct modification at the protocol level of the Bitcoin main chain, fundamentally enhancing Bitcoin's scalability, transaction performance, and programmability.

From a performance perspective, Nubit has achieved a significant optimization of the traditional Bitcoin transaction processing model through UTXO (Unspent Transaction Output) Bundling technology. The traditional Bitcoin network is significantly limited in transaction speed and throughput due to its single UTXO mode. UTXO Bundling allows multiple UTXOs to be aggregated for processing, effectively compressing the transaction data volume. This has increased transaction speed by about 10 times without sacrificing security.

In terms of programmability, Bitcoin Thunderbolt reintroduces and extends the OP_CAT opcode (this opcode originally existed in early versions of Bitcoin but was later removed). OP_CAT allows data concatenation, enabling developers to build more complex script logic, thus directly implementing smart contracts on the Bitcoin main chain. The most immediate benefit of this upgrade is that developers can deploy decentralized applications (dApps) on the native Bitcoin network without relying on sidechains, Rollups, or cross-chain bridges.

On the asset protocol integration front, Nubit advocates and has implemented a unified standard called Goldinals. Goldinals provides an asset issuance framework based on zero-knowledge proof and state commitment. In simple terms, this is a "Bitcoin-native" token standard that does not rely on external trust institutions and does not require complex cross-chain bridges to validate the existence and status of each token on-chain. BitMM, an on-chain automated market maker running on Bitcoin, integrates scattered protocol assets such as BRC-20, Runes, and Ordinals. Nubit has also made a significant breakthrough in trustless transactions. Its BitMM (Bitcoin Message Market) system supports users in trustlessly matching trades and verifying information on the Bitcoin chain.

Contrary to traditional scaling approaches (such as using sidechains, Plasma, Rollup, or bridging wrapped tokens), Nubit takes a path of "main chain native scaling." BitVisa provides a decentralized identity and credential system. Whether it's transaction compression, smart contract support, asset standard integration, or on-chain trade matching—everything runs directly on top of the Bitcoin main chain. Native BTC is used, not cross-chain mapped tokens.

3.1 Core Mechanism Analysis

This section explains the content based on the paper "Stateless and Verifiable Execution Layer for Meta-Protocols on Bitcoin" (see Reference Link 1). In my understanding, similar to Bitcoin Thunderbolt and Bitcoin Lightning, both are proposed scaling solutions to address the slow transaction confirmation on the Bitcoin main chain, with the core goal of improving efficiency and reducing costs. The difference between the two is:

The Lightning Network's design leans more towards "payment channels"—it can only be used for transfer payments, does not support smart contracts or complex logic, and its setup and maintenance threshold is high, which is not conducive to large-scale adoption. Thunderbolt, launched by Nubit, aims to provide an off-chain protocol with programmability, supporting Turing-complete operations, enabling the construction of more complex state assets, liquidity protocols, and financial applications.

Flexible Adjustable Multi-Signature

Imagine splitting a Bitcoin "signature" in half: half in Alice's hands and half in the committee's hands. Every time it is transferred to a new user, Alice and the committee each add a "small secret" to their respective half of the signature—only the receiving new user knows this secret. The recipient can reassemble the two halves into a complete signature based on the secret they know, without Alice and the committee needing to have an online conversation.

Asynchronous Fault-Tolerant Committee Ledger

A "service group" composed of several nodes (such as 4n+1) is responsible for bookkeeping, mutually confirming who the current owner is. Even if a few nodes are faulty, as long as the majority are still online, the ledger can continue to operate normally. These nodes are only responsible for "signing" and "bookkeeping" and cannot casually use funds, ensuring security and decentralization.

Atomic Swap-Based Finality

When it is time to spend this money on-chain, it goes through a three-step "atomic swap":

1. Alice+ Committee spends the original locked output, temporarily giving the money to the committee;

2. The committee locks an equivalent amount in a safe that can only be accessed by "Zenni and the committee" together;

3. Finally, Zenni takes the money from the safe using a two-part signature.

This way, neither Zenni nor the committee can run away, ensuring seamless off-chain restructuring and on-chain redemption.

3.2 Protocol Design and Key Innovations of Thunderbolt

· Non-Interactive, Recursive Signature Delegation

A tweakable threshold Schnorr signature structure has been designed, where traditional payment channels often require several round-trip messages, Thunderbolt only needs to "send a signature with a small secret" each time to get it done, greatly reducing even online demands.

· "New Lock" for Every Transfer

Each hop transfer, Alice and the committee update the signature with a new small secret, rendering the old "lock" completely invalid. This way, anyone from before cannot get the new signature, preventing reuse of the old signature.

· Leaving a Single Trace On-Chain

Only one "locking" is done on-chain at the beginning, and all subsequent changes are completed off-chain, only to later spend this money on-chain. In contrast to the Lightning Network which requires frequent channel opening and closing, Thunderbolt has fewer on-chain operations and better privacy.

· No Money Loss Even in Offline Scenarios

Even if Alice or Zenni is offline, as long as a majority of the committee is online, transfers or redemptions can be completed at any time without worrying about expired time locks or malicious channel closures by the counterparty.

· Truly "Machine-Verifiable" Security

Every critical step in the protocol has been formally verified using Tamarin Prover, meaning these security guarantees are not just theoretical but have been repeatedly checked by automated tools.

Four, How is Thunderbolt Different from Existing Lightning Network Solutions?

Let's take a look at the comparison between Thunderbolt and existing solutions (such as the BOLT protocol, Breez SDK, Phoenix) to see exactly what improvements it has made.

Difference Between Thunderbolt and Existing Lightning Network Solutions:

As we can see, the main advantages of Thunderbolt lie in its "security" and "theoretical completeness." It is one of the few that can:

· Have a protocol design that can be proven secure

· Prevent malicious users from unfairly benefiting in any state

However, its disadvantages are also evident:

· Complex Deployment: To use Thunderbolt, you currently need to run the full protocol stack, making it challenging for regular wallet users to get started

· Main Chain Compatibility: Bitcoin's main chain script language is too basic, so Thunderbolt must use clever workarounds to achieve functionality, increasing implementation difficulty

· Lack of Ecosystem Support: Unlike BOLT, which already has a large number of wallet and node support, Thunderbolt is currently in the "early research stage"

5. The Potential Impact of Thunderbolt: The Catalyst for BTCFi?

Image Source: Self-made

So, is Thunderbolt the optimal solution for BTCFi? Let's put forward a bold viewpoint:

Thunderbolt is theoretically the best solution for BTCFi at present, but in practice, it is still in the "Alpha stage." In other words, it is like the "Ethereum 2.0 Whitepaper" of the Bitcoin world, full of foresight but has not yet entered the engineering system-level implementation. Based on the current observations, I believe Thunderbolt's potential development path could take three directions:

1. Integration into Rollups: Serving as Bitcoin's DeFi Engine

Due to Bitcoin's insufficient scalability, Thunderbolt may eventually become an off-chain module on a Bitcoin L2 solution (such as BitVM, Nomic, BOB). This is similar to integrating Thunderbolt into Rollups as a generic contract execution layer.

For example:

· BOB can integrate Thunderbolt channel layer to achieve native BTC transactions

· The RGB ecosystem may also introduce Thunderbolt state management logic

· BitVM itself supports more complex logic, and Thunderbolt will become one of the contract standards

· Serve systems such as Babylon, Bitlayer, etc.

2. Form an Independent Standard Ecosystem, Running in Parallel with the Main Chain

The biggest possibility of Thunderbolt is to develop its own network ecosystem, node operation system, aggregator, etc., similar to the Lightning Network, and may even form Thunderbolt-LSP operators. At the same time, as Nubit, in alliance with the protocol layer soft fork upgrade driven by the Satoshi era miners, introduces two key features, UTXO Bundling and OP_CAT, it can directly inherit BTC protocol-like assets (BRC20, Runes, Ordinals), creating a huge space for imagination. Perhaps in the future it may have:

· Thunderbolt Wallet (similar to Phoenix)

· Thunderbolt Node (light node running channels)

· Thunderbolt DEX (off-chain order matching)

· Thunderbolt AMM (liquidity pool)

3. Replaced by Simpler Solutions

Of course, if in the future a system emerges that can achieve similar functions without the need for state channels, formalized languages, or off-chain protocol collaboration, then Thunderbolt may be just a transitional product, much like:

· If BitVM achieves a more efficient smart contract execution environment

· Cross-chain ZK technology allows BTC assets to be deployed on other chains in a completely trustless manner

· Some native Bitcoin protocol unifies payment + lending + contracts

Lastly, looking at it from an ecosystem perspective, the greatest significance of Thunderbolt is not its ability to process payments, but that it has enabled Bitcoin's assets to have off-chain contract composability for the first time. This may sound abstract, but one can see how critical this "composability" is from the DeFi boom on Ethereum. Ethereum's boom benefited from the full ecosystem of Solidity + Hardhat + Ethers.js + Metamask.

The key highlight of Thunderbolt is the introduction of two major features: UTXO Bundling and OP_CAT. OP_CAT brings native programmability to the Bitcoin network, while UTXO Bundling combines multiple small transactions to process them together, reducing the scale of transaction data, increasing on-chain throughput, similar to Ethereum Rollup. It seems to unify all Bitcoin ecosystem protocols and make the implementation of various assets and BitMM more than just talk, but at this stage, Thunderbolt still feels like "writing a very strong mathematical paper," and there may still be a considerable distance before developers can truly utilize it.

This article is a contributed content and does not represent the views of BlockBeats.

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