Bitcoin Scaling Redefines What Users Trust

Users trust the mathematical security of Bitcoin, not a new set of validators. This is the model of Lightning Network and rollup-like systems such as BitVM.\n- Key Benefit: Inherits Bitcoin's ~$1.4T base-layer security.\n- Key Benefit: Enables ~1M TPS potential with finality in minutes, not days.\n- Key Constraint: Complex to implement; often requires watchtowers or fraud proofs.

Users trust a bonded set of entities (e.g., Liquid Network, Stacks) secured by slashing or a multi-sig federation.\n- Key Benefit: Enables rich programmability and ~2s finality impossible on L1.\n- Key Benefit: Facilitates $2B+ in wrapped assets and DeFi.\n- Key Constraint: Introduces a new, smaller trust set separate from Bitcoin miners.

Users trust their own node and a social layer to resolve disputes, as pioneered by RGB and Taro. Assets live off-chain, ownership is proven on-chain.\n- Key Benefit: Unprecedented scalability and privacy; data is not stored on-chain.\n- Key Benefit: Censorship-resistant issuance and transfer.\n- Key Constraint: Relies on user operation and data availability solutions.

Users must trust channel counterparties and routing nodes with their funds and liquidity. Centralization pressure creates systemic risk.

• Reliance on large, centralized hubs like exchanges for reliable routing.
• Capital inefficiency with funds locked in channels, creating a ~$200M liquidity market.
• Watchtower dependency introduces new trust assumptions for channel security.

Users trade Bitcoin's decentralized consensus for a federation's multisig. This reintroduces custodial and censorship risks.

• Trust in a fixed set of entities (e.g., 15-functionaries) to secure $100M+ in bridged assets.
• Regulatory attack surface concentrated on the federation.
• Interoperability bottleneck dependent on the federation's honesty for all cross-chain messages.

The dominant scaling method abandons Bitcoin's security entirely. Users trust a centralized custodian (BitGo) and a centralized issuer (merchant).

• Counterparty risk with a single entity holding the ~$10B Bitcoin reserve.
• Smart contract risk on Ethereum L1 for the wrapped token.
• Regulatory kill switch exists via the centralized custodian and DAO multisig.

Proposes a miner-voted sidechain secured by Bitcoin's hash power. Trust is minimized but not eliminated, shifting to the miner majority.

• Trust in Bitcoin miners to act honestly as a decentralized federation.
• Slow, deliberate withdrawals (e.g., 1-3 months) act as a security checkpoint.
• Political risk of contentious soft forks and miner cartel behavior.

Shifts trust to cryptographic proofs and off-chain validation. Users only need to verify the consensus rules, not the state.

• Trustless execution via Bitcoin as a data availability and dispute layer.
• High user burden to validate entire state history or run a challenger.
• Nascent tooling creates a steep usability cliff, pushing users towards trusted watchtowers.

Attempts to port the Ethereum scaling playbook. Trust is placed in the rollup's proof system (ZK or Fraud Proof) and its data posting to Bitcoin.

• Trust in cryptographic proofs (ZK) or a small challenger set (Optimistic).
• Critical dependency on Bitcoin for data availability, limited by ~4MB blocks.
• Sequencer centralization risk in early stages, mirroring early Optimism and Arbitrum.

Direct L1 use forces users to trust the base chain's ~10 min finality and $5+ fees. This makes DeFi, gaming, and social apps economically impossible. The security is overkill for most interactions.

• Trust Assumption: Absolute, but slow and expensive.
• User Burden: Manages native asset security directly.

Execute on a separate chain, settle proofs to Bitcoin. Users now trust the rollup's fraud/validity proof system and its data availability posting to L1.

• Trust Shift: From Bitcoin miners to rollup sequencer/prover network.
• Key Benefit: ~2s latency, <$0.01 fees, while inheriting L1 censorship resistance.

Moving assets between L1 and L2 introduces bridge risk, the dominant failure point in crypto. Users must trust a multisig, light client, or oracle set, creating a new centralization vector.

• Trust Assumption: Third-party bridge operators' honesty and liveness.
• User Burden: Evaluates bridge security, a complex and opaque task.

Use Bitcoin script to enforce atomic swaps or state transitions without a trusted custodian. Trust is minimized to the cryptographic assumptions of Bitcoin itself.

• Trust Shift: From a third-party bridge to Bitcoin's consensus and script.
• Key Benefit: Self-custody is maintained end-to-end; no new trusted entities.

Most scaling solutions (sidechains, optimistic rollups) post data to a separate chain (e.g., Celestia, Avail). Users must now trust that chain's validator set and its liveness, fracturing security.

• Trust Assumption: Security of a separate, often newer, proof-of-stake network.
• User Burden: Understands multiple consensus models and slashing conditions.

Leverage Bitcoin blockspace for data commitment. Users' final trust is solely in Bitcoin's immutable ledger and decentralized miner set. This is the maximalist scaling endpoint.

• Trust Shift: Consolidates all trust back to Bitcoin's base layer.
• Key Benefit: Unified security model; no external DA committee or validator risk.