BitVM

BitVM is a proposed framework that lets two parties commit to the outcome of an arbitrary, complex computation off-chain, with a dispute-resolution process that uses Bitcoin's existing, unchanged scripting capabilities to let either party challenge a dishonest claimed result, resolving the dispute through a Bitcoin transaction if the two parties disagree. This resembles the fraud-proof (see Kaavon's "Fraud Proof" glossary definition) challenge model used by optimistic rollups (see Kaavon's "Optimistic Rollup" glossary definition) on other chains, but is specifically designed to work within Bitcoin's existing, deliberately limited scripting language without requiring any new opcodes or protocol changes.

BitVM's main practical use case explored so far is enabling more trust-minimized two-way pegs (see Kaavon's "Two-Way Peg" glossary definition) between Bitcoin and other chains, aiming to reduce reliance on a federated peg's (see Kaavon's "Federated Peg" glossary definition) trusted signer group. The approach involves significant complexity and overhead in practice — current BitVM-based designs require substantial off-chain computation and coordination to set up the dispute mechanism — and remains an active area of ongoing research and development rather than a widely deployed production system.