Every year at the Cardano Summit there are multiple announcements and unveilings. This year, the “Big One” arrived near the end of day two, on the Summit Main Stage in a session titled: “Cardano & Bitcoin: an interconnected and inclusive ecosystem.”

On the stage

Vladimir Shapovalov, reporter at @CoinTelegraph moderated the session. Edan Yago from BitcoinOS @btc_os made the big announcement itself. Also on stage to offer their perspective were Andrej Majcen from @BitcoinSuisseAG, Fisher Yu @babylonlabs_io, Marvin Bertin @GoMaestroOrg, and Raul Antonio Rosa Padilla @FluidTokens.

Tension in the Crypto Space

Mr. Yago from BitcoinOS stepped away from the panel at the beginning of the session to explain why we were all here. He set the stage by reminding us of some bits of Bitcoin’s past, the details of which were new to me. Bitcoin v0 had two functions: 1) BTC Coin, and 2) a DApp called “Poker Lobby.” In the next version of Bitcoin, Poker Lobby was removed, leaving the chain with one single function: BTC Coin. That has been the state of affairs ever since.

Bitcoin is incredibly popular, and famously secure, but all you can do with it is hold it or spend it. Other things that money is good at, like investing and lending, are not natively available to BTC users.

The ability to do more with a blockchain requires the functionality that we call “Smart Contracts” – software programs that allow all of these more flexible financial tools, and endless new use cases. Smart contracts were introduced by Ethereum – that’s the primary reason that Ether is the big #2 in the space, because it was the first to do this. But smart contracts on Ethereum are still kind of messy – security soft spots, limited bandwidth, and high transaction costs limit its ultimate usefulness.

Smart contracts on Cardano are really secure, transaction costs are really low, and the ability to scale is really good. The huge rallying cry that I heard throughout the summit is that what Cardano must find now is Mass Adoption.

Yago also wanted to make a point of some things that Cardano and Bitcoin have always had in common. Both use a UTXO accounting system (Unlike Ethereum and many others) and they both have a famously long-term view of things. In a crypto world that is known for pump & dumps, bubble & burst, get rich & rug types of events, Bitcoin and Cardano stand out for their more buttoned-up attitude. In these ecosystems, getting rich is still allowed, but it’s going to be because something of lasting and important value is happening.

To put it very succinctly: Bitcoin has huge numbers of users and massive amounts of money in it – but limited functionality. Cardano has excellent functionality and scalability, but has not achieved mass adoption and capitalization.

The Announcement

Using BitcoinOS, Zero Knowledge Proofs can be verified on Bitcoin, using the Cardano Network. Cardano can now be the Smart Contract Platform for Bitcoin. Bitcoin users can participate in DeFi and Dapps without ever needing to leave their home base – even the processing fees can be paid in BTC.

You can read the announcement on the BitcoinOS blog here.

The Reactions

Let’s step away from the Summit Mainstage for a moment and talk about the reactions that blew up on social media. Cardano founder Charles Hoskinson has steadily pointed toward interoperability as a pillar of Cardano since day 1 so this is a great day for him. His X posts now feature a number of jubilant memes celebrating the announcement, along with this more level-headed note:

“Remember that @BTC_OS isn’t a bridge. It’s a brain. And that brain is going to let Bitcoin flow into the crypto world, and they finally get to ditch their boring lives and enjoy DeFi, GameFi, and the magic of Smart Contracts. First stop, Cardano

Lots of Cardano folks have been reposting the BOS announcement, and the vibes are very cheerful and optimistic.

On the flipside, what really matters is whether Bitcoin people will want to use the new tools that are created. Early reactions are tepid - the name of the game in Bitcoin has been hunker down and hodl for many years now, so it may take time to discover which new utilities get traction. One bitcoiner on X commented:

“i like my #bitcoin boring. sitting in my wallet. doing nothing.”

Panel Discussion

Why Cardano?

Ethereum’s account-based system is not well made for verifying zkproofs – it is computationally expensive. Cardano’s eUTXO system offers a big advantage in this way

There are already Bitcoin L2 solutions out there. How can Cardano compete?

Many of these are EVM[Ethereum]-based, which likely is not the best architecture for a Bitcoin Layer-2 system. Cardano’s eUTXO architecture is better – state channels, ZKProofs are easier, solutions can be overall more lightweight, because their structures are similar or complementary.

“Bitcoin has incredible liquidity, and Cardano has great expressiveness.”

What is going to happen?

“We don’t actually know what will happen: The thing we are doing is building the bridge so that people can build.” It’s relevant to note that people are using current Bitcoin Layer-2s, to the tune of billions. But experience shows that these solutions all seem to be missing something. Cardano is a much better fit “from a pedigree standpoint”, and it offers the security of a Layer-1 system. This tool also offers Cardano users the ability to interact with the Bitcoin network without “leaving” Cardano.