Bitcoin is the OG of crypto. Satoshi Nakamoto launched it in 2009. However, Bitcoin didn’t have a smart contract option. Or did it? In 2010, Nakamoto disabled a function that indirectly allowed for smart contracts. That’s OP_CAT. The times they are a-changin, and we may see a comeback of this piece of script.
So, let’s take a closer look at how this change in the Bitcoin script could work out.
What Is OP-CAT?
Nakamoto created OP_CAT in 2009 when he created Bitcoin. However, in 2010, he disabled it. For example, OP_CAT can bring smart contracts to Bitcoin. This would allow $BTC holders to use it in BTCFi and make their $BTC work for them.
Currently, there’s a DeFi network on Bitcoin, but that’s all happening on layer 2 chains like Stacks or Rootstock. Putting the OP_CAT script back into action would allow for this to happen on the Bitcoin blockchain itself. It allows two pieces of data, like ‘A’ and ‘B’ to merge and become ‘AB’. Thus, making complex operations easier and simpler. This process is also known as concatenation. So, within a stack, you join two data points together and put them on top of the stack.
A stack is a simple data structure. You can visualize this as a stack of cards. It allows for two operations, a ‘push’ and a ‘pop’. So, a push puts an item on top of a stack. On the other hand, a pop removes it from the top. Bitcoin uses such a stack data structure.
Now, the reason Nakamoto disabled OP_CAT is that it took too much memory to execute back in those days. For example, a small 1-byte value could turn into a massive 1-terabyte stack value. This could result in a DoS (denial of service) attack. However, in 2021, we saw the arrival of Taproot. Part of the Taproot upgrade is Tapscript. This script allows for various new transaction types. Tapscript limits all stack elements to 520 bytes. In other words, it resolved the memory issue. The picture below shows the actual OP_CAT script.
Source: X
What Is Taproot?
Taproot is a soft fork upgrade for the Bitcoin blockchain. It dates from November 2021. A soft fork is backwards compatible. This means that a newer software version doesn’t conflict with the older version. This is in contrast to a hard fork. In a hard fork, new rules are not backwards compatible. Thus, a chain splits and starts a new transaction history.
Taproot increases scalability. It also improves efficiency and privacy. Taproot also opened the doors for smart contracts on Bitcoin. Now, with Tapscript, OP_CAT could start to play a role again.
Some things you can do with Taproot are inscriptions. That brings us, for example, to Ordinals. These Ordinals are $SATs (or Satoshi’s, the smallest Bitcoin denomination). Here’s an explanation of what Ordinals are. Currently, there are over 68.8 million Ordinals. Estimations of fees spent on inscriptions are around $403 million USD.
What Can OP_CAT Do?
Before OP_CAT can do anything, we need a BIP or a Bitcoin Improvement Proposal. However, to date there’s only a proposal, dating to October 2023, to reintroduce OP_CAT. The Bitcoin community is rather divided about this upgrade. Changes are coming to Bitcoin, albeit slowly. So, providing there will be such a BIP, it won’t come into effect before 2025 at the earliest.
There are various reasons for this. One is that it is a decentralized protocol. Getting anything done takes lots of effort and time. Another reason is cultural. Bitcoin is doing fine as it is. It’s successful, and many people don’t want to change anything and mess things up.
Many Bitcoiners prefer a minimalist approach. For example, they argue that it’s more important to have other soft forks. For instance, to solve scalability or privacy issues. Instead of adding new functionalities like OP_CAT does. Nonetheless, allowing OP_CAT would add beneficial features to Bitcoin. So, let’s take a look at what these can be.
Enhanced script capabilities
OP_CAT allows developers to build and manipulate larger integers straight within Bitcoin scripts. An integer is a number that you can write without a fractional component. For example, 23, 101, 2048, etc. However, 2.35 isn’t. So, if an app requires complex number operations, OP_CAT makes this easier.
Zero-Knowledge apps
The zk technology seems to be the future for privacy in blockchain. Remember, with zk tech, you can prove something without showing the actual data. However, ZK tech requires devs to build complex data structures. OP_CAT makes creating this easier. It also makes verifying the proof simpler.
BitVM
We all know EVM, the Ethereum Virtual Machine. A VM is like the backbone of decentralized computing. For example, they enable the development of smart contract execution and dApps. Since you couldn’t build smart contracts on Bitcoin, we saw Ethereum come on to the crypto scene. OP_CAT can allow Bitcoin to also have smart contracts. It enables more complex scripts. This could bring BitVM to the scene.
Source: X
Conclusion
Adding the OP_CAT script back into the Bitcoin script would add plenty of advantages. BTCFi would get a strong injection. OP_CAT would open plenty of new BTCFi opportunities. However, new developments in Bitcoin take time. It may not be until 2025 before we see OP_CAT being reactivated. If it happens at all……
Disclaimer
The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment and informational purposes only. Any information or strategies are thoughts and opinions relevant to accepted levels of risk tolerance of the writer/reviewers, and their risk tolerance may be different from yours.
We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments, so please do your due diligence.
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