Technical Deconstruction of CKB Public Chain: Why Can It Speed Up the Legitimacy of BTC Layer 2?

Original author: Haotian, crypto researcher

At first, I was not surprised when I heard that @NervosNetwork was making a desperate attempt to create a BTC layer2. This is because the CKB public chain technology is close to BTC and even ahead of BTC; it can inherit the native UTXO characteristics while also achieving more advanced programmable feature extensions. If it is nearly impossible for the CKB public chain to surpass BTC in narrative, then as a secondary option, its BTC layer2 will definitely be an unbeatable presence. Why? Next, let’s talk about my views on CKB.

The current BTC layer2 market is limited by the verification capability flaws of the BTC mainnet, resulting in a flourishing situation. Indeed, it is precisely because the BTC mainnet's scripting language is inherently simple, coupled with its computational and verification capabilities being almost close to zero, that it has provided ample space and opportunity for the market to flourish. Currently, apart from limited transaction verification and multi-signature capabilities within the UTXO unlocking conditions, the BTC mainnet cannot directly implement any other complex transaction logic that requires verification, such as data validation, state changes, etc. Instead, it can only use BTC as an asset settlement layer and extend a powerful public chain to build local consensus and computable verification capabilities for expansion. As a result, there are no unified standards for the implementation of BTC layer2, and there is no concept of "orthodoxy"; it is even difficult to distinguish between high and low. It can only be differentiated based on the community's perception: in a narrow sense, only the Lightning Network state channels and RGB's Single Seal extension solutions ensure true BTC orthodoxy layer2, as they fully utilize and leverage BTC's limited scripting verification capabilities and do not require or rely on minimal off-chain local consensus.

In a broad sense, as long as the local consensus of the extension chain is recognized and there is a cross-chain bridge solution that ensures the safe migration of assets, theoretically, the current Ethereum EVM chains, Solana's high concurrency performance chains, etc., can all serve as BTC layer2. It is evident that the current BTC layer2 market is clearly polarized; either extremely narrow, like the Lightning Network and RGB, which develop slowly and face many obstacles, or extremely broad, where any performance chain that can achieve secure asset interaction with the BTC mainnet can be called BTC layer2. So, is there no "compromise" solution? There is, and the answer is: @NervosNetwork, which uses the UTXO model as its technical underlying framework and has adapted and upgraded its performance. Specifically:

1) The CKB Network and BTC share the same "UTXO model, mining consensus mechanism," etc., which is different from the account balance model of mainstream public chains like Ethereum. UTXO has certain unique advantages in transaction privacy, flexible transaction construction, and parallel processing to prevent double spending, making it one of Satoshi Nakamoto's greatest inventions. This also explains why after Ethereum, Sui and Aptos adopted similar UTXO models. We can say that Bitcoin's capacity and block generation speed have limitations of the times, but the UTXO model is quite advanced. CKB has inherited the UTXO model and optimized and upgraded it to the Cell model, which retains the transaction purity of Bitcoin's UTXO model while providing the data state of account models like Ethereum.

To put it simply: the Bitcoin UTXO model creates and destroys similarly to coins being continuously minted and destroyed, while the Cell removes the destruction process, aiming to verify and permanently store the state. Each Cell contains two fields: Capacity and Data. Capacity, measured in bytes, is equivalent to the UTXO balance; Data stores all historical transaction states and any form of data. This allows the Cell collection not only to accurately express balances and handle asset transfers but also to include a series of complex states of smart contracts. Overall, the Cell model is a leading transaction model with stronger continuity, better flexibility, and an expanded applicability of the UTXO model. It is also key for CKB to inherit the security of the BTC mainnet while "accelerating" the slow expansion directions of Bitcoin like the Lightning Network and RGB.

2) Taking the recent launch of RGB++ by CKB as an example, under normal circumstances, the BTC ecosystem would face challenges in extending a mature RGB solution. The difficulty lies not in the one-time sealing process of the BTC mainnet but rather in the communication, coordination, and joint maintenance of state among off-chain client verification nodes, especially in a decentralized and dispersed node environment. In other words, while RGB theory seems easy, its practical implementation is hindered by limitations such as basic infrastructure, leading to numerous obstacles.

CKB has recognized this and has allowed all these off-chain client verification nodes to participate in the on-chain public verification process of CKB. This directly accelerates the practical path of UTXO extension clients that RGB aims to achieve. After all, achieving complex P2P node network consensus in an off-chain client environment is challenging and filled with complexity and challenges, such as potential data synchronization delays or inconsistencies, as well as fraud and attack challenges. If this process can be replicated in an on-chain environment, it becomes simpler.

3) RGB++ has been widely discussed recently, and I would like to add another point regarding the Open Transaction data format proposed by CKB, which showcases the advanced characteristics of the CKB chain. In simple terms: Open Transaction allows multiple participants to construct and aggregate different transactions over different times, including three major features: partial construction, allowing modifications, and incremental construction and aggregation. For example, Alice creates an Open Transaction, declaring how many tokens A she wants to exchange for tokens B from Bob. After the transaction is initiated, it remains editable; if Bob agrees to the transaction conditions upon receiving it, he can add his tokens B and supplement the transaction conditions.

At first glance, this may seem abstract; for instance, in cross-chain scenarios, Alice and Bob can autonomously complete asset transactions across different heterogeneous chains, greatly enhancing the cross-chain interoperability of the CKB chain. In complex DeFi transaction scenarios, users participating in DeFi may need to dynamically adjust based on market changes. Through Open Transaction, contract participants can flexibly adjust transaction conditions during the execution process, significantly enriching the complexity handling capability of transactions.

In my view, Open Transaction and UTXO transaction unlocking conditions are similar; they can integrate the construction of complex transaction unlocking conditions, multi-signature participation, and complex application scenarios into one, which is also a value innovation that extends from the BTC main chain's philosophy. Interestingly, @busyforking, a member of the Ethereum core development team, chose to use the BTC UTXO model for his first project. Although Ethereum's smart contract model is now more widely applied, Jan and his Nervos team have stubbornly chosen to extend and upgrade on the BTC UTXO model. This not only expresses respect for Satoshi Nakamoto's minimalist UTXO transaction model but also subtly plants the seeds for it to become a BTC Native layer2.

To summarize: I am very optimistic about CKB's efforts to create a BTC layer2. In the short term, it can indeed accelerate the implementation of the Lightning Network and RGB on UTXO model chains, at least providing meaningful references for the landing expectations of these two orthodox expansion solutions on the BTC mainnet; in the long term, the native characteristics of CKB's chain and the compatibility of its underlying architecture will allow it to go further in this chaotic battle of BTC layer2 without standards.

Note: There are many technical details and highlights about CKB, and I will analyze more content when I have time. I can't help but marvel that BTC layer2 has provided opportunities for some new chains to rise and also offers infinite possibilities for old chains to sprout anew.