Understanding BTCDomain: A Domain Project on Bitcoin

Author: Satoshi

Recently, Ordinals have attracted attention in the crypto world. After OKX announced that its on-chain wallet began supporting Ordinals, Binance quickly followed up with the tweet "Ordinals, made simple." With Web3 giants joining in, the "Summer of Ordinals" may be upon us.

Among the many Ordinals-based PFP projects, BTCDomain is a rare Ordinals domain name project. In short, BTCDomain offers a user experience similar to ENS while remaining entirely based on Bitcoin. If Bitcoin remains a more consensus-driven and secure blockchain than Ethereum for a considerable time in the future, does BTCDomain have the potential to compete with Ethereum's domain name leader ENS?

What are Ordinals and Inscription

To better understand Ordinals, we need to introduce the concept of inscription, which is similar to NFTs, permanently storing all data on Bitcoin's first layer. To illustrate what inscription is, we can use the .btc inscription as an example. By querying any domain name on the BTCDomain official website, such as satoshi.btc, and clicking the hyperlink of the inscription ID associated with the domain name, you can directly jump to the Ordinals browser.

Since the satoshi.btc domain name itself is an Ordinals inscription, you can view its detailed information in the Ordinal Explorer, while also obtaining the genesis transaction hash (4d8c…fc63) on this page.

By pasting the hash of the genesis transaction into a Bitcoin explorer and viewing the raw data in JSON format, you can copy the second part of the "witness" (20eb…d68), which is a hexadecimal hex text. Pasting it into a hex-to-string tool will allow you to interpret the information engraved by BTCDomain on the Bitcoin mainnet.

It can be seen that the content engraved on the Bitcoin mainnet for the satoshi.btc domain name includes important information such as "name," "first_owner," and "expireDate."

This small experiment proves that all metadata of BTCDomain is inscribed on the Bitcoin chain. As long as Bitcoin exists, Bitcoin domain names can always be searched and used. Ordinals provide us with a secure and reliable domain name storage solution.

Secondary Market Trading: PSBT

The trading of domain NFTs is also an important part of the domain ecosystem. As mentioned earlier, users' domain names are associated with Satoshis through serial numbers. When a user sends Satoshi to someone else, the associated inscription is also transferred. This operation makes domain trading simpler.

In addition, "Partially Signed Bitcoin Transactions" (PSBT) is a useful feature of Bitcoin. This feature allows users to trade selected Satoshis with anyone who has a specific amount of BTC. By utilizing PSBT, they can trade domain names on trading platforms that support Ordinals technology, such as MagicEden. The trading experience is comparable to Ethereum, but all transaction records and security are ultimately guaranteed by Bitcoin.

Is BTCDomain Domain Name Safe?

As a domain name system, BTCDomain is now fully resolvable. Users can now freely use domain names to receive and send inscriptions and Bitcoin on the btcdomains.io official website. Additionally, BTCDomain has built a simple and user-friendly domain registration and management system. Some third-party applications are also integrating this new domain resolution feature.

Addressing security issues has always been key to domain name systems, as malicious domain resolution can lead to significant BTC losses. Ordinals indeed help to permanently store data in Bitcoin. However, the Bitcoin mainnet cannot run smart contracts. To achieve a fully trustless domain resolution state, users need to set up their own Bitcoin full node and Ordinals database. This requires users to have a considerable understanding of technology and about 7 days of preparation time. For ordinary users, this is completely unacceptable.

In this case, does it mean that there must be a trade-off between user-friendliness and security? Some may also wonder how BTCDomain achieves usability on the Bitcoin blockchain without smart contracts. Does this compromise the fundamental trustless characteristics of the blockchain? Is BTCDomain an untrustworthy domain system?

The answer is very clear. Even without smart contracts, BTCDomain has found a path to trustlessness—combining ZK with Ordinals.

ZK: A Solution for Trustworthy Computing on Bitcoin

Zero-Knowledge Proofs, also known as ZKP, is a very hot concept in the current crypto ecosystem. In short, ZK technology creates a trustworthy computing environment. It allows programs to not only generate output but also produce a ZK proof. Anyone can verify the ZK proof to ensure that the actual executed program has not been tampered with and remains consistent with the open-source version.

Although generating ZK proofs requires high computational power, almost every electronic device can handle the computational resources needed to verify ZK proofs, such as smartphones or personal computers. ZK algorithms effectively prevent data servers from executing unauthorized operations. You can find more detailed information about ZK in the documentation of BTCDomains.

Detailed Explanation of ZKVM Technology under the STARK Route

Combining the capabilities of ZK with Ordinals makes Bitcoin a usable data chain, thus creating a system similar to smart contracts, which is entirely native to Bitcoin. With ZK technology, users can confirm the security of the system through mathematical proofs.

Therefore, ZK allows ordinary users to obtain trustless domain resolution results without having to set up a Bitcoin full node. In this way, Ordinals can be accepted by a broader user base while maintaining trustlessness.

Domain Names: The First Step Towards Smart Bitcoin

We have verified that BTCDomain can implement domain name functionality on Bitcoin. However, domain names should not be the only application on Bitcoin. There are still many engineering issues that need to be resolved, and many problems may slow down the process of making Bitcoin smarter.

However, BTCDomain has already instilled confidence in developers that the existence of Bitcoin-native trustless apps is possible. In the future, we may also see projects like Uniswap, Aave, and MakerDAO on Bitcoin. Of course, domain names are the first step towards smart Bitcoin and a symbol of the future smart Bitcoin chain.