Ivy Enables Bitcoin to Offer Smart Contracts

The Bitcoin blockchain is now a step closer to having its own smart contracts with the arrival of a new piece of software called Ivy. Smart contracts are essentially self-executing pieces of computer code that can be programmed to be activated, only when certain conditions have been met – often by multiple parties. Due to this unique property, smart contracts are an ideal tool for providing escrow services.

bitcoin smart contracts

An escrow service is a financial arrangement, where a third party temporarily holds onto the funds required for two parties to complete a given transaction. The funds are held in a secure escrow account and are released only when all of the terms of the agreement have been met by both parties. Traditionally lawyers and financial institutions played the role of the middlemen in escrow services but the advent of blockchain technology made it possible for this role to be played by a computer.

Until the arrival of Ivy, smart contract technology was most commonly associated with the Ethereum network. Indeed it is this attribute of Ethereum, that caused a significant amount of members of the cryptocurrency community to regard it as having far more potential than Bitcoin. This is also the reason why so many observers are quick to label Bitcoin a “bubble” but not quite as quick to extend the same appellation to Vitali Buterin’s brainchild.

Bitcoin’s utility until recently, was limited strictly to transfer of value and the number one reason for the exponential increase of its value is the intense media hype surrounding it. Ethereum on the other hand, has been at the forefront of development of the application of blockchain technology to smart contracts. Ethereum’s ERC-20 has until now been the gold standard upon which all digital token and smart contract applications have been based.

Developed by cryptographic ledger specialist – Chain.com – Ivy is an open source compiler that can be used to write bitcoin smart contracts into Segwit-compatible addresses. An interesting fact about Ivy, is that it’s not so much a newly developed function of Bitcoin, as it is a piece of software that utilizes pre-existing features of Bitcoin in new ways. This feature has been originally built into Bitcoin by its legendary creator – Satoshi Nakomoto. Curiously, Satoshi made no mention of this functionality in his famous white paper, though the feature was present in the first version of Bitcoin ever released. Although this functionality is believed to have been added by Satoshi as more of an afterthought than a key component, it is considered by many to be further evidence of his genius and farsightedness.

It is these facts that make the arrival of Ivy such an exciting development for Bitcoin. It will finally allow Bitcoin to compete with Ethereum not just for the title of the world’s premiere digital currency, but also smart contract technology provider. This development strikes at the very heart of the argument proposed by the likes of Joseph Stiglitz – that Bitcoin has no intrinsic value.

Ivy is at an early stage in its development, it still requires rigorous testing before it can be deemed safe for a trial in the real world.