Why you should pay attention to Bitcoin's OP_CAT? The biggest narrative after the Lightning Network

Author: Jaleel Jia Liu, BlockBeats

Earlier this year, when I was writing "Can 13 Lines of Code Help Bitcoin Achieve Smart Contracts? Understanding the OPCAT Soft Fork," OPCAT was still an unfamiliar term for many. If it weren't for the Bitcoin NFT project Taproot Wizards promoting the quantum cat series NFTs through meme culture, few people might have known about this seemingly dull technical concept.

But just six months later, OPCAT has become extremely popular, even being regarded as the next "Lightning Network." The recently popular fractal network Fractal Bitcoin is, in fact, the code implementation of OPCAT in Bitcoin, with the token FB increasing three to four times within days of its launch. Consequently, multiple OPCAT-based protocols emerged in the Bitcoin ecosystem in just one day, such as CAT20 on the fractal network, which also emphasizes the OPCAT concept. During the minting days, the GAS on the fractal network surged to over 5000, and currently, a CAT is priced around $5.5 off-market, with very few orders available, allowing early minters to achieve price increases ranging from 5 to 20 times. The quantum cats have also maintained a price of 0.25 BTC, becoming a blue-chip in Bitcoin NFTs.

It seems that anything associated with OP_CAT can drive up prices.

Not only is it a "self-entertainment" within the community, but the discussion around OPCAT among Bitcoin developers is also quite extensive. I reviewed this year's Bitcoin Optech newsletters and Bitcoin developer meetings, where OPCAT frequently appeared in discussions, becoming a regular topic.

Currently, the OPCAT Bitcoin BIP draft jointly released by Bitcoin Core developers Ethan Heilman and Armin Sabouri has been officially named BIP347. Many heavyweight figures in the Bitcoin field, such as Lightning Network white paper author Tadge Dryja, Lightning Labs CTO Olaoluwa Osuntokun, and Blockstream research director Andrew Poelstra, have shown great support for OPCAT.

Why Do Lightning Network Developers Favor OP_CAT?

To understand this phenomenon, we need to start with the Lightning Network. In 2011, Satoshi Nakamoto mentioned the prototype of the Lightning Network in an email. As a key solution for Bitcoin scalability and payment speed enhancement, the Lightning Network has attracted significant attention from developers since its inception.

In the past two years, the concept of the "Bitcoin ecosystem" has gained momentum, with various Bitcoin scaling solutions like sidechains and virtual machines emerging like mushrooms after rain, attracting many investors. However, in the eyes of seasoned Bitcoin developers, these solutions were not up to par and hard to take seriously. After all, the Lightning Network is currently seen as the most excellent "payment channel" in Bitcoin, and it is one of the few "legacies" left by Satoshi, embodying the community's spirit of "orthodoxy."

However, the situation has dramatically changed over the past year. Several developers have announced their withdrawal from Lightning Network-related work, and voices denying the Lightning Network have been rising, especially from some veteran developers. Fiatjaf, the founder of Nostr, bluntly stated: "The Lightning Network has been deceiving Bitcoin users for their time, energy, and money for six years."

In this context, some developers are searching for the next "Lightning Network." Many Bitcoin developers believe that OPCAT will be the next significant breakthrough for Bitcoin after the Lightning Network. Due to the technical nature of OPCAT, before discussing what OPCAT is and what it can do, let's first get to know the Bitcoin developers who favor OPCAT.

Bitcoin Developers Supporting OP_CAT

Lightning Network White Paper Author

Tadge Dryja is one of the authors of the Lightning Network white paper. In 2015, Tadge Dryja and another author of the Lightning Network white paper, Joseph Poon, founded Lightning Labs under the leadership of Elizabeth Stark. The main difference between Lightning Labs and another Bitcoin Lightning Network company, Blockstream, is that Lightning Labs uses the Go programming language, while Blockstream uses C.

However, at the end of 2016, Tadge Dryja had disagreements and arguments with the Lightning Labs team, leading him to leave just a year after Lightning Labs was established. He then joined the Digital Currency Initiative (DCI) at MIT to continue his research on the Lightning Network. At MIT DCI, he participated in multiple research projects, focusing mainly on the scalability and interoperability of cryptocurrencies and smart contracts. This included the development of the Utreexo project, a new Bitcoin scalability technology aimed at making Bitcoin nodes smaller and faster. In 2022, Tadge Dryja joined Lightspark as a senior research scientist, continuing to address scalability issues in Bitcoin and blockchain, leveraging his expertise as a co-inventor of the Lightning Network.

Due to his profound expertise in Bitcoin smart contracts and scalability technology, Tadge Dryja recognized the potential of OPCAT early on and has consistently supported testing OPCAT on the Bitcoin test network, encouraging developers to "break" OP_CAT to discover its potential issues.

Lightning Labs CTO

Olaoluwa Osuntokun (Roasbeef) is another co-founder and CTO of Lightning Labs, as well as an outstanding Bitcoin developer who has made significant contributions to the development of the Lightning Network. It can be said that the early team of Lightning Labs is on par with Blockstream.

When mentioning Olaoluwa Osuntokun, one cannot overlook the "gentlemanly rivalry" between him and Tadge Dryja. Interestingly, a significant reason for Tadge Dryja's departure from Lightning Labs was Olaoluwa. When Tadge Dryja was working at Lightning Labs, the first version of the protocol he developed was named LIT, which was incompatible with the BOLT developed by Blockstream. However, Olaoluwa's version was compatible, gradually gaining more recognition and favor from developers, effectively pushing Dryja out.

However, history is always dramatic. Now, these two "rivals" from Lightning Labs are currently supporting OP_CAT together.

Blockstream Research Director

There seems to be a rumor that Blockstream is the "decision-maker" behind Bitcoin. This rumor is not unfounded. In 2014, Adam Back, the "father of PoW," gathered several well-known early Bitcoin developers, including Matt Corallo, Greg Maxwell, and Pieter Wuille, to establish Blockstream. Subsequently, during the Bitcoin scaling wars, Blockstream clearly supported and promoted the Lightning Network, leading to its current status.

Currently, in discussions about OPCAT, Blockstream's research director Andrew Poelstra is also an unavoidable figure. Andrew Poelstra is the research director at Blockstream and a seasoned Bitcoin cryptographic script developer, whose influence in the industry is undeniable. He discussed OPCAT in an article titled "CAT and Schnorr Tricks I" written on January 30, 2021, pointing out that combining OP_CAT with CHECKSIGFROMSTACK can provide a clever method for transaction introspection.

Although Blockstream has not created a separate blockchain for OPCAT, they have supported OPCAT testing through Bitcoin Inquisition (a test network for evaluating new Bitcoin features). This is akin to building a safe "training ground" for OP_CAT, allowing researchers to observe its performance under real-world conditions.

Andrew Poelstra has also compared OPCAT with other proposals like OPCTV, pointing out that OPCAT offers broader flexibility, while OPCTV focuses more narrowly on non-recursive smart contracts.

Authors of the BIP 347 Proposal

In promoting OPCAT, Bitcoin developers Ethan Heilman and Armin Sabouri have made significant contributions, co-authoring and advancing the OPCAT proposal, which has been officially designated as BIP 347. This proposal aims to redefine the opcode OPSUCCESS126 through a soft fork to re-enable OPCAT.

Armin Sabouri has previously focused on improvements to Bitcoin scripts and consensus layers. He believes that while OP_CAT may not be the final solution, it provides possibilities for implementing various new features and is an important step in improving Bitcoin scripts.

Ethan Heilman is also someone who influenced Andrew Poelstra's thinking. It was during a private conversation in the fall of 2019 that he changed Poelstra's initial stance against what he termed Bitcoin smart contract functionality. Ethan Heilman pointed out that despite concerns about so-called Bitcoin smart contract functionality, these "harmful" smart contracts could already be achieved through CHECKMULTISIG. To prove this, Ethan Heilman challenged people on social media to propose feasible "dark" smart contracts, but no one has succeeded to date.

StarkWare

StarkWare is a company focused on developing blockchain scalability technologies, particularly skilled in using zero-knowledge proofs (ZKPs) to enhance transaction privacy and efficiency. The company aims to offload complex computations from the main chain (such as Ethereum) to secondary networks without sacrificing security and decentralization. In this way, StarkWare addresses the scalability issues of blockchains while maintaining transaction transparency and verifiability.

StarkWare's activities promoting OPCAT stem from its interest in Bitcoin network scalability and smart contract functionality. OPCAT is a Bitcoin opcode that allows for the execution of more complex transactions and contracts on the Bitcoin network through data concatenation. By enabling OP_CAT, StarkWare aims to achieve Ethereum-like smart contract capabilities on Bitcoin, thereby expanding Bitcoin's use cases and enhancing its functionality.

In July 2022, StarkWare launched a $1 million research fund specifically for studying the pros and cons of enabling OPCAT on Bitcoin. This fund aims to support researchers and developers with innovative ideas on how to safely and effectively implement OPCAT on Bitcoin.

Additionally, StarkWare has demonstrated the potential of using OPCAT for zero-knowledge proofs in Bitcoin's testing environment, particularly on Signet. These efforts showcase how OPCAT can enable more complex operations on the Bitcoin network, such as applications of zero-knowledge proofs, which are key components of smart contract functionality. Recently, StarkWare also partnered with sCrypt to explore the design of a PoC (proof of concept) bridge based on OPCAT and ZK magic, indicating that StarkWare may soon launch an OPCAT-related protocol.

Others

A few other developers are not as well-known, so we'll mention them together.

Salvatore Ingala has been deeply researching Bitcoin payment pools and smart contracts. He proposed using OPCAT to optimize the payment pool exit process, believing it could significantly reduce on-chain data and operational costs. Ingala views OPCAT as a potential plugin for other Bitcoin scaling strategies, such as Arc and Coinpools, and even future Bitcoin Optimistic rollups, to improve efficiency and security.

Anthony Towns is one of the main developers of Bitcoin Inquisition, a tool similar to a test network but more flexible, used to test Bitcoin protocol changes that have not yet been widely accepted. Towns has pushed for the activation of OPCAT on the Inquisition platform, providing a safe "testing ground" for OPCAT. Although Towns recognizes the importance of OP_CAT in testing new features and exploring Bitcoin script capabilities, he remains cautious about adding too much programmability to Bitcoin, fearing it may increase the risk of Bitcoin being censored or controlled.

Robin Linus is the creator of BitVM, who believes that the reintroduction of OPCAT provides a powerful tool for Bitcoin, particularly supporting projects like BitVM that make it simpler and more efficient to verify arbitrary computations on Bitcoin. With the execution of OPCAT, the Bitcoin ecosystem can create more general and expressive smart contracts, fostering a more functional and practical blockchain environment.

Why Are Lightning Network Developers So Interested?

The developers of the Lightning Network have shown such strong interest in OPCAT; what is the underlying reason? To understand this, we need to first grasp the essence of OPCAT.

What is OP_CAT?

OP_CAT is an opcode in Bitcoin scripts used to concatenate two data segments from the stack into a larger element. Although its function seems simple, it can provide more smart contract capabilities to the Bitcoin network, allowing developers to create and handle more complex data and transaction logic.

OPCAT is not a brand-new opcode; it existed in early versions of Bitcoin but was disabled in later versions due to concerns about security and complexity. However, as Bitcoin continues to evolve, more and more developers believe it is time to re-enable OPCAT. For more details, see: "Can 13 Lines of Code Help Bitcoin Achieve Smart Contracts? Understanding the OP_CAT Soft Fork."

But why does this seemingly simple operation spark such significant discussion among Bitcoin developers? One key reason is that it can significantly enhance the smart contract capabilities of the Bitcoin network, allowing developers to implement features that are currently complex or even impossible to achieve in the existing Bitcoin scripts.

The Application Potential of OP_CAT in Payments

OPCAT demonstrates enormous application potential in payment systems, especially in off-chain protocols and payment channel networks. Its re-enablement will greatly improve the operational efficiency of these systems and reduce the burden of on-chain transactions. The main functions realized after OPCAT include:

Multisig Optimization: In multisig scenarios, OPCAT can help users merge multiple signatures into a single data block, reducing the number of signatures that need to be submitted. This not only saves on-chain space but also reduces transaction fees. Multisig is crucial for payment security and shared account management in Bitcoin, especially in applications like the Lightning Network, where OPCAT can make this process more efficient.

State Contracts: OPCAT can also be used for state contracts. This type of contract is a form of smart contract that can maintain state across multiple transactions. Through OPCAT, developers can concatenate state information from different transactions, enabling more complex contract logic on Bitcoin. For example, certain complex payment protocols or distributed applications (like lotteries, gambling, or other complex financial products) require maintaining some state across multiple on-chain transactions, all of which can be achieved through OP_CAT.

Scalability of Payment Channel Networks: Another important application scenario for OPCAT is in payment channel networks similar to the Lightning Network. In payment channel networks, users typically conduct numerous microtransactions off-chain, with only the final settlement going on-chain. The concatenation function of OPCAT can allow for more effective management and verification of intermediate transactions within payment channels. By concatenating different payment requests, users can perform more complex payment operations without increasing the on-chain burden. This way, the throughput and efficiency of payment channels can be significantly improved.

With the advancement of the BIP347 proposal and more developers and researchers joining the exploration of OPCAT, we have reason to believe that this previously shelved opcode will bring new vitality to the Bitcoin network. Just as the Lightning Network transitioned from concept to mainstream, the re-enablement of OPCAT may also become the next key milestone in Bitcoin scalability and payment innovation.