At the beginning of this year, when I was writing “13 Lines of Code to Help Bitcoin Achieve Smart Contracts? Understanding the OP_CAT Soft Fork“, OP_CAT was still an unfamiliar term to many people. If it weren’t for the Bitcoin NFT project Taproot Wizards using meme culture to launch the Quantum Cat series NFT to promote OP_CAT, few people would have known about this seemingly dry technical concept.

However, just half a year later, OP_CAT has become red-hot, even being seen as the next “Lightning Network”. The recently popular Fractal Bitcoin network is actually the code implementation of OP_CAT in Bitcoin, and its token FB has tripled or quadrupled in just a few days after launch. As a result, multiple OP_CAT-based protocols have emerged in the Bitcoin ecosystem in just one day. For example, CAT20 on the fractal network also focuses on the concept of OP_CAT. During the minting period, it pushed the GAS of the fractal network up to over 5000 at one point. Currently, the off-market price of a CAT is around $5.5, with very few listings available, and early minters have achieved price increases ranging from 5 to 20 times. Meanwhile, Quantum Cat has consistently maintained a price of 0.25 BTC, becoming a blue-chip Bitcoin NFT.

It seems that anything associated with OP_CAT can drive up the price.

It’s not just the community’s “self-hype”; there’s also a lot of discussion about OP_CAT technology among Bitcoin developers. I’ve looked through this year’s Bitcoin Optech newsletters and Bitcoin developer meetings, and OP_CAT frequently appears in discussions, becoming a regular topic.

Currently, the OP_CAT 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 whitepaper author Tadge Dryja, Lightning Labs CTO Olaoluwa Osuntokun (a major developer of the Lightning Network), and Blockstream Research Director Andrew Poelstra, have all shown great support for OP_CAT.

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 scaling and payment speed improvement, the Lightning Network has attracted the attention of many developers since its inception.

In the past two years, as the concept of “Bitcoin ecosystem” has gained momentum, various Bitcoin scaling solutions such as sidechains and virtual machines have emerged like bamboo shoots after a spring rain, attracting many investors. However, in the eyes of those seasoned Bitcoin developers, these solutions are not up to par and can hardly be considered worthy. After all, the Lightning Network is currently viewed as the best “payment channel” in Bitcoin by the public, and is one of the few “posthumous children” of Satoshi Nakamoto and the “legitimate child” of the Bitcoin community in spirit. Related reading: “Seven Years in the Making: The Origins and Challenges of Lightning Network’s Legitimacy“.

However, the situation has changed dramatically in the past year. Several developers have announced their withdrawal from Lightning Network-related work, and voices negating the Lightning Network have been rising, especially criticisms from some senior developers. Fiatjaf, the founder of Nostr, even bluntly stated: “The Lightning Network has been deceiving Bitcoin users of their time, energy, and money for 6 years.”

Against this backdrop, some developers are looking for the next “Lightning Network”. And OP_CAT is considered by many Bitcoin developers to be Bitcoin’s next major breakthrough after the Lightning Network. Since OP_CAT is highly technical, before discussing what OP_CAT is and what it can do, let’s first get to know those Bitcoin developers who favor OP_CAT.

Bitcoin Developers Supporting OP_CAT

Lightning Network Whitepaper Author

Tadge Dryja is one of the authors of the Lightning Network whitepaper. In 2015, Tadge Dryja, along with another Lightning Network whitepaper author Joseph Poon, founded Lightning Labs under the leadership of Elizabeth Stark. They stood alongside BlockStream, another Bitcoin Lightning Network company. The main difference between the two 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. As a result, just a year after Lightning Labs was founded, Tadge Dryja chose to leave and join the Digital Currency Initiative (DCI) at MIT to continue his research on the Lightning Network. At MIT DCI, he participated in multiple research projects, mainly focusing 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. At Lightspark, he continues to address scalability issues in Bitcoin and blockchain, leveraging his expertise as a co-inventor of the Lightning Network.

Due to his profound knowledge of Bitcoin smart contracts and scalability technologies, Tadge Dryja also early on recognized the potential of OP_CAT. He has been consistently supporting the testing of OP_CAT on Bitcoin test networks and encouraging developers to attempt 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 a distinguished Bitcoin developer who has made significant contributions to the research and development of the Lightning Network. It can be said that the early team of Lightning Labs was in no way inferior to Blockstream.

Speaking of Olaoluwa Osuntokun, we must mention the “gentlemen’s competition” between him and Tadge Dryja. Interestingly, a major reason for Tadge Dryja’s departure from Lightning Labs was Olaoluwa. When Tadge Dryja was working at Lightning Labs, he developed the first version of the protocol called LIT, which was not compatible with Blockstream’s BOLT. However, Olaoluwa developed a compatible version, which gradually gained more recognition and favor from developers, achieving a late-comer advantage and, to some extent, accelerating Dryja’s departure.

However, history is always full of drama. Today, these two former “rivals” from Lightning Labs are now jointly supporting OP_CAT.

Blockstream Research Director

There has long been a rumor in the community that Blockstream is the “decision-maker” behind Bitcoin. This rumor is not unfounded. In 2014, Adam Back, known as the “father of PoW,” gathered several renowned early Bitcoin developers including Matt Corallo, Greg Maxwell, and Pieter Wuille to establish Blockstream. The company later took a clear stance in supporting and promoting the Lightning Network during the Bitcoin scaling wars, contributing to the Lightning Network’s current prominent position.

Currently, in discussions about OP_CAT, Blockstream’s Research Director Andrew Poelstra is an indispensable figure. Andrew Poelstra is not only the Research Director at Blockstream but also an experienced Bitcoin cryptographic script developer with undeniable influence in the industry. As early as January 30, 2021, he wrote an article titled “CAT and Schnorr Tricks I“ discussing OP_CAT, pointing out that combining OP_CAT with CHECKSIGFROMSTACK could provide an ingenious method for transaction introspection.

Although Blockstream hasn’t created a separate blockchain for OP_CAT, they have supported its testing through Bitcoin Inquisition (a test network for evaluating new Bitcoin features). This is like building a safe “training ground” for OP_CAT, allowing researchers to closely observe its performance under real-world conditions.

Andrew Poelstra has also compared OP_CAT with other proposals such as OP_CTV, noting that OP_CAT offers broader flexibility, while OP_CTV more narrowly focuses on non-recursive smart contracts.

Author of BIP 347 Proposal

In the promotion of OP_CAT, Bitcoin developers Ethan Heilman and Armin Sabouri have made significant contributions. They jointly wrote and advanced the OP_CAT proposal, which has been officially designated as BIP 347. This proposal aims to redefine the opcode OP_SUCCESS126 through a soft fork to re-enable OP_CAT.

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

Ethan Heilman has also influenced Andrew Poelstra’s ideas. It was during a private conversation in the fall of 2019 that Heilman changed Poelstra’s original stance against so-called Bitcoin smart contract functionality. Heilman pointed out that despite concerns about potentially harmful smart contracts in Bitcoin, such contracts could already be implemented through CHECKMULTISIG. To prove this point, Ethan Heilman initiated a challenge on social media, encouraging people to propose feasible “dark” smart contracts, but to date, no one has succeeded.

StarkWare

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

StarkWare’s efforts to promote OP_CAT stem from its interest in Bitcoin network scaling and smart contract functionality. OP_CAT is a Bitcoin opcode that allows for more complex transactions and contracts to be executed on the Bitcoin network through data concatenation. By enabling OP_CAT, StarkWare attempts 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 OP_CAT on Bitcoin. This fund aims to support researchers and developers with innovative ideas on how to safely and effectively implement OP_CAT on Bitcoin.

Additionally, StarkWare has demonstrated the potential of using OP_CAT to implement zero-knowledge proofs in Bitcoin’s test environment, particularly on Signet. These efforts showcase how OP_CAT can enable more complex operations on the Bitcoin network, such as the application of zero-knowledge proofs, which are key components of smart contract functionality. Recently, StarkWare has also established a partnership with sCrypt to jointly explore the design of a PoC (Proof of Concept) bridge based on OP_CAT and ZK magic, suggesting that StarkWare might also launch an OP_CAT-related protocol in the near future.

Others

We’ll discuss a few other less famous developers together.

Salvatore Ingala has been deeply researching Bitcoin payment pools and smart contracts. He proposed using OP_CAT to optimize the payment pool exit process, believing it can significantly reduce on-chain data and operational costs. Ingala views OP_CAT as a potential plugin for other Bitcoin expansion 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 for testing Bitcoin protocol changes that have not yet been widely accepted. Towns promoted the activation of OP_CAT on the Inquisition platform, providing a safe “testing ground” for OP_CAT. 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, concerned that it might increase the risk of Bitcoin being censored or controlled.

Robin Linus is the creator of BitVM. He believes that the reintroduction of OP_CAT provides Bitcoin with a powerful tool, especially in supporting projects like BitVM, which make verifying arbitrary computations on Bitcoin simpler and more efficient. With the implementation of OP_CAT, the Bitcoin ecosystem can create more general and expressive smart contracts, fostering a more functional and practical blockchain environment.

Related reading: “To compute anything on Bitcoin, what do veteran developers think about BitVM?》

Why are Lightning Network developers so interested?

Why are Lightning Network developers showing such intense interest in OP_CAT? To understand this, we need to first grasp the essence of OP_CAT.

What is OP_CAT?

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

OP_CAT is not a new opcode; it existed in early versions of Bitcoin but was disabled in later versions due to security and complexity concerns. However, as Bitcoin continues to evolve, more and more developers believe it’s time to re-enable OP_CAT. More content can be found: “13 lines of code help Bitcoin implement smart contracts? Understand the OP_CAT soft fork”

But why does this seemingly simple operation spark such 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 functions that are currently complex or even impossible in Bitcoin script.

OP_CAT’s Potential Applications in Payments

OP_CAT shows enormous potential for application 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 after implementing OP_CAT include:

Multisig Optimization: In multisig scenarios, OP_CAT can help users combine 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 very important for Bitcoin’s payment security and shared account management, especially in applications like the Lightning Network, where OP_CAT can make this process more efficient.

State Contracts: OP_CAT can also be used for state contracts. These are a form of smart contract that can maintain state across multiple transactions. Through OP_CAT, developers can concatenate state information from different transactions, enabling more complex contract logic on Bitcoin. For example, some complex payment protocols or distributed applications (such as lotteries, gambling, or other complex financial products) that need to maintain a certain state between multiple on-chain transactions can be implemented through OP_CAT.

Scalability of Payment Channel Networks: Another important application scenario for OP_CAT is payment channel networks similar to the Lightning Network. In payment channel networks, users typically make a large number of micropayments off-chain, with only the final settlement occurring on-chain. OP_CAT’s concatenation function can enable more effective management and verification of intermediate transactions in 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 OP_CAT, we have reason to believe that this once-shelved opcode will bring new vitality to the Bitcoin network. Just as the Lightning Network went from concept to mainstream, the re-enablement of OP_CAT could become the next crucial milestone for Bitcoin’s scalability and payment innovation.

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