A Detailed Explanation of the High-Performance Bitcoin Sidechain MVC

Introduction

Following the spring of the Bitcoin ecosystem initiated by Ordinals, various Bitcoin ecosystem protocols and applications, such as BRC-20, Atomicals, Rune, and others directly relying on the Bitcoin network, have begun to flourish. However, due to the limitations of the Bitcoin network’s characteristics, it is challenging to support the development and adoption of large-scale applications. Bitcoin network transaction fees have exceeded 500 sats/vB at times, with the cost of minting popular inscriptions with high total quantities reaching millions of dollars.

On the other hand, with the Bitcoin halving approaching, the enthusiasm and demand for the development of the Bitcoin ecosystem are increasingly high, and the market urgently needs an effective and practical scaling solution to maintain the ecosystem’s development and operation needs. Through transaction fees, this would support and promote the long-term operation of the Bitcoin network. Imagine a network that can inherit the security and features of the Bitcoin network and support high-concurrency user demands, where assets can seamlessly migrate. Developers would be able to create applications for the masses, making large-scale applications of Bitcoin and its ecosystem no longer a distant dream. It might even spread worldwide with the help of spot ETFs.

Bitcoin Scaling Solutions

To date, the exploration of Bitcoin scaling solutions has never ceased, especially at the end of 2023, with a significant number of BTC Layer 2 solutions emerging. Each scaling solution adopts different technologies and can be categorized into the following three types:

1. Bitcoin Homomorphic Solutions;

2. EVM Solutions, establishing cross-chain solutions for Bitcoin network assets;

3. Other non-Bitcoin homomorphic, non-EVM solutions, such as the Lightning Network, Stacks, etc.

MVC (MicrovisionChain) is one of the few scaling solutions that have achieved Bitcoin homomorphism, including aspects like the UTXO model, consensus algorithms, and 1:1 token quantity, allowing seamless migration for Bitcoin network users, developers, and miners. Specifically, compared to other scaling solutions, Bitcoin homomorphic scaling has the following prominent advantages:

• Highly compatible assets and ecosystem: For sidechains, based on their underlying design, specific assets can natively circulate among various sidechains and Layer 2s. MVC not only supports the transfer of Bitcoin but also includes a series of assets like BRC-20. The ecosystem’s compatibility feature eliminates the need for tedious redevelopment work, allowing for rapid migration and opening to users, achieving fast user growth in a short period;

• Seamless migration user experience: Users use the same set of private keys to manage assets in both the Bitcoin network and its scaling network, can reuse the same set of management tools, and the infrastructure also has high adaptability. Users do not need to change their habits when migrating between the Bitcoin mainnet and scaling solutions;

• Scalable mining power security: Adopting a Bitcoin homomorphic solution means it also uses Bitcoin’s SHA 256 mining algorithm. The numerous miners in the Bitcoin network can migrate to the new network, potentially becoming security protectors for the sidechain/Layer

High-Performance BTC Sidechain MVC

Returning to the topic of scaling solutions, let’s start with a few questions to understand the basic requirements and goals of scaling—why does the Bitcoin network need to scale? What improvements are needed? What must be ensured while scaling?

Why scale? Because the Bitcoin network has high transaction fees, long transaction confirmation times, and lacks Turing completeness (no smart contracts);

What improvements are needed? Lower fees, faster transactions, and the introduction of new asset issuance methods/smart contracts;

What must be ensured? The security and decentralization of the network.

In short, the best scaling solution would be one that lowers barriers to entry and offers the potential for mass adoption, all while maintaining the network’s decentralization. Without decentralization, relying on a few high-performance nodes would be a step back to the centralization typical of Web2; without performance, it wouldn’t meet the general public’s needs.

MVC addresses these issues with its innovative mechanism:

Security

MVC is a BTC sidechain based on the UTXO model and PoW consensus. In addition to having network and technical characteristics similar to Bitcoin, such as security and high decentralization, it also features high performance and low fees. Testnet data shows that MVC’s TPS exceeds 10,000, capable of supporting massive user adoption.

In terms of network security, MVC uses the same SHA-256 algorithm as Bitcoin, capable of attracting a large mining community. Currently, MVC has achieved milestone growth in its hash rate. According to MiningPoolStats data, MVC’s hash rate is ranked 12th among all SHA-256 algorithm networks, higher than BSV and eCash (XEC), and following BCH, reaching 81% of BCH’s hash rate—up from 20% six months ago. With its substantial hash rate, the network’s decentralization and security are well protected, which is a fundamental requirement for scaling.

Innovative Mechanisms and Their Performance

MVC introduced the concept of BVM (Bitcoin Virtual Machine), expanding the functionality of the Bitcoin network to include smart contracts on top of the UTXO model +PoW consensus. This aims to build a smart contract system within the Bitcoin ecosystem that rivals the Ethereum network, bringing functional expansions to Bitcoin network users and creating possibilities for attracting new users. This vision and philosophy are realized through a series of innovative underlying mechanisms designed by MVC, including performance-enhancing MetaTXID, the smart contract framework MetaContract, and the DID solution MetaID. MVC implements smart contract functionalities and network scalability through these innovative mechanisms.

Performance Enhancement and Smart Contract Foundation - MetaTxID: MetaTxID represents an innovative transaction identification number generation method, marking a core difference from other UTXO public chains. By using MetaTxID, it’s possible to fully retain the parallel capabilities of the UTXO model. Through data validation trimming, it reduces the amount of data required for contract verification, achieves lightweight data provenance, and provides feasibility for pure UTXO model Layer 1 contracts.

High-Performance Smart Contract Framework - MetaContract: This is a high-performance, low-cost smart contract framework based on the UTXO model. It offers the following advantages over the mainstream global state-based contract models:

• Scalability: Different UTXO contracts can be executed and verified in parallel within MVC nodes, effectively utilizing the multi-core advantages of modern computers, significantly increasing the execution speed of contracts, and thereby improving the network’s TPS.

• Low Latency: MVC features zero confirmation characteristics, where contract execution results are returned immediately after transactions reach the miner’s node memory without waiting for confirmation.

• Security: Due to the chain-like dependency of UTXO contracts, it has anti-MEV and reentrancy prevention security features.

On-chain Distributed Identity Protocol - MetaID: Aims to facilitate data interoperability among different cross-chain applications. By adopting the distributed ID protocol, the complexity and barriers to developing Web3 applications on MVC are significantly reduced, making the massive explosion of Web3 applications possible.

With the combined effects of these innovative mechanisms, MVC’s high-performance network allows developers to fully leverage their creativity without being limited by performance, and features easy testing and maintenance, high memory utilization, and simplified code. For users, while enjoying network security, they can participate in the ecosystem at a very low cost, using seamless and efficient Web3 applications.

Token System

MVC’s native token, SPACE, has a total supply of 21 million, with no presale or IDO. SPACE serves as both the network’s gas and governance token. 35% of the tokens are distributed through PoW mining, 10% are linearly unlocked over 10 years for ecosystem builders, and the remaining 55% are distributed through PoB (Proof of Build) via community DAO votes. The distribution chart is as follows.

MVC’s move aims to create a positive economic cycle through two aspects: ecological incentives and sustainable miner income. By issuing tokens in the form of PoB, it not only promotes the influx of technical and marketing talents into the ecosystem and its construction but also serves as a potential reserve for ecological development incentives. A typical example of ecological token incentives is Arbitrum, which introduced a large number of high-quality projects through multiple rounds of STIP (Short-Term Incentive Plan), attracted users with incentives, retained them with project development, and ultimately completed the ecological loop. With TVL, the number of projects, and project activity all ranking at the top of Layer 2, MVC, which has reserved a large amount of funds for ecological development, is also expected to quickly build and drive its ecosystem in the same way.

On the other hand, in the traditional mining output model, block rewards serve as a reward for the early miners’ investment, subsidizing miners when early users are insufficient and decreasing over time. In the MVC miner economic model, a significant part of the income for later miners will consist of transaction fees. MVC aims to support a massive number of Web3 applications and users. With the aforementioned ecological construction system, as applications mature and the user base grows, the transaction fee portion of each block will surpass block rewards within a few years, becoming the main source of income for miners. The composition of miner income gradually transitions, effectively maintaining and healthily turning into a positive cycle from early to later stages.

CoinGecko data shows that SPACE currently has a market cap of only $73 million, which is still undervalued compared to the billions in valuation for various emerging ungrounded BTC Layer 2 projects. In contrast to other mined coins that are produced and sold immediately, MVC, through ecological construction, can control and slow down selling pressure and further encourage token recirculation within the ecosystem, achieving a positive cycle.

Comprehensive Ecological System

The MVC ecosystem is already showing scale, with over twenty protocols in place, such as DEX MVCSwap, domain service MetaName, SocialFi project Show 3, and stablecoin project Space Dollar, among others. The protocol coverage is extensive, and the ecosystem is fully functional.

The MVC’s key incubation project, orders.exchange, which is the first order book style DEX on the BTC ecosystem, has also announced its upcoming launch on MVC, becoming a bridge between the Bitcoin network and the MVC network. In the MVC roadmap, many significant plans set to land in the first quarter for the MVC ecosystem were disclosed. These include a cross-chain asset bridge, which will utilize the aforementioned seamless asset transfer feature. Additionally, two Bitcoin network-compatible wallets are soon to be integrated into the MVC network, along with a series of performance enhancements. Once these plans are implemented, a smooth channel for ecosystem circulation will be opened, driving a new round of user growth and propelling MVC towards a path of asset and ecosystem prosperity.

The goal is vast and ambitious—MVC’s ultimate expansion plan, “100MVC.”

As previously mentioned, the MVC network is characterized by high performance, low cost, support for parallel operations, and high compatibility. MVC aims to further leverage these features to become the ultimate solution for Bitcoin’s scalability. The first step involves MVC nodes undergoing an upgrade between March and April this year to open up a seamless cross-chain asset channel. The MVC monolithic network itself has already solved scalability issues, achieving a tested TPS of over 10,000, with transaction fees lower than $0.001, enabling it to accommodate a high volume of users.

Following this, MVC plans to implement a rapid replication feature for the MVC network, known as “100 MVC.” Once deployed, developers will be able to set up a replicated version of MVC within half an hour, maintaining the core premise of unchanged UTXO structure and underlying functionalities. They can adjust parameters as needed to ensure future compatibility with MVC and BTC. Similar to AltLayer’s Rollup-as-a-Service, “100 MVC” allows developers to quickly build networks based on scenario needs, bypass foundational work, and focus on transactions themselves, further enhancing the scalability and practicality of the Bitcoin network.

Finally, leveraging its capability for parallel operations and high compatibility, MVC aims to create a unified global scalable ecosystem for Bitcoin. Having 100 MVCs would be akin to having 100 homomorphic UTXO networks of Bitcoin. MVC will update to support these 100 MVCs and various third-party Bitcoin architectures including Layer 2, sidechains, and ecosystems, achieving an exponential increase in carrying capacity. Ultimately, MVC aspires to be the ultimate solution for Bitcoin network scalability.

Conclusion

With the Bitcoin halving imminent, the influx of funds from Bitcoin spot ETFs continues unabated, heralding another explosive growth period for the Bitcoin ecosystem. Compared to projects that have yet to materialize despite their hype, MVC, which has been deeply involved in the Bitcoin network for many years, has already established its ecosystem. By endowing the Bitcoin ecosystem with smart contract functionality, it will leverage its security and high performance to pioneer an unprecedented path for Bitcoin, leading to a new era of widespread adoption.

Disclaimer:

1. This article is reposted from techflow, originally titled “A Detailed Explanation of the High-Performance Bitcoin Sidechain MVC.” The copyright belongs to the original author, techflow. If there are any objections to this repost, please contact the Gate Learn team, and the team will process it as quickly as possible according to relevant procedures.

2. The views and opinions expressed in this article represent only those of the author and do not constitute any investment advice.

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