Scaling the Unscalable

How Starknet Could Redefine Bitcoin's Future

Feb 04, 2025

Bitcoin's scalability saga is nothing short of legendary. From the moment Satoshi Nakamoto launched Bitcoin in 2009 with a modest 1 MB block size, the digital currency has been locked in a perennial battle to scale. But scaling Bitcoin is no easy feat; it's been a tale of ambition, controversy, and failure.

The block size limit, set to prevent network congestion, was meant to ensure Bitcoin remained a decentralized, secure peer-to-peer currency. Yet, as the network grew, so did the transaction demand. In the early days, Bitcoin could handle just three transactions per second. As its popularity skyrocketed, so did the urgency for a solution. Over the years, developers, miners, and users have clashed in fierce debates, each proposing their own vision for scaling—some revolutionary, others dead on arrival.

The attempts to break through the scalability bottleneck became a battle of egos, ideologies, and technical visions. But no solution seemed to satisfy the elusive goal: to scale Bitcoin without compromising decentralization or security. A decade and a half later, the debate rages on. And now, the question looms larger than ever: Can a new contender finally conquer the unscalable beast?

The Scalability War: Bitcoin’s Epic Struggles

Bitcoin's journey toward scalability has been a saga of ambition, innovation, and contention. From the early days of the 1 MB block size limit, the community has been embroiled in a series of high-stakes battles, each promising to unlock Bitcoin's full potential, yet none achieving the elusive goal of seamless scalability.

The Rise of Layer 2 Solutions: Liquid and the Lightning Network

In the quest to alleviate congestion and enhance transaction speeds, Layer 2 solutions emerged as the knights in shining armor. The Lightning Network, introduced in 2015, proposed a revolutionary approach by creating off-chain payment channels. This innovation aimed to facilitate instant, low-cost transactions, making Bitcoin more practical for everyday use. However, despite its promise, the Lightning Network has grappled with challenges such as liquidity issues, network centralization concerns, and the complexity of routing payments across a vast network of channels. These hurdles have hindered its widespread adoption and effectiveness.

Parallel to this, the Liquid Network, a sidechain developed by Blockstream, sought to offer faster transaction times and enhanced privacy features. By enabling the issuance of digital assets and confidential transactions, Liquid aimed to provide a more scalable solution for Bitcoin's ecosystem. Yet, it has faced its own set of challenges, including limited adoption and the complexities inherent in bridging assets between the main Bitcoin chain and the sidechain.

Taproot: Enhancing Privacy and Flexibility

In 2021, the Taproot upgrade was activated, introducing Schnorr signatures to Bitcoin's protocol. This enhancement promised improved privacy, reduced transaction sizes, and greater flexibility in smart contract execution. While Taproot has bolstered Bitcoin's capabilities, it has not directly addressed the scalability issue, leaving the network's transaction throughput largely unchanged.

Ordinals and the NFT Craze

The introduction of Ordinals brought a new dimension to Bitcoin by enabling the inscription of arbitrary data, including NFTs, directly onto the blockchain. This innovation sparked a surge in on-chain activity, leading to increased transaction fees and network congestion. While Ordinals have added a layer of functionality, they have also highlighted Bitcoin's scalability limitations, as the network struggled to accommodate the additional data without compromising performance.

The Unyielding Scalability Dilemma

Despite these innovative attempts, Bitcoin's scalability challenges persist. Layer 2 solutions like the Lightning Network and sidechains such as Liquid have made strides but have not achieved universal adoption or resolved fundamental issues like liquidity and centralization. Upgrades like Taproot have enhanced privacy and flexibility but have not significantly increased transaction throughput. The Ordinals phenomenon, while adding new use cases, has exacerbated congestion and highlighted the network's limitations. Each solution, though promising, has encountered obstacles that have prevented it from being the definitive answer to Bitcoin's scalability conundrum. Enter, Starknet! scratch that, they have been here all this while, way back from 2013, researching and building towards scaling Bitcoin. Keep going and you will see!

Rough timeline of attempts at scaling Bitcoin

Slow are Sturdy Wins the Race?

You might be amazed to know that the history of Starknet attempt at scaling Bitcoin goes back to the early days of Bitcoin. They have been here all along during the “Great forking Wars” and all Bitcoin cultural divides. Observing, researching and building in “silence”!

Here’s a quick and rough timeline about what they have been cooking.

2013 – The Seed of an Idea

STARK Research Inception
At a Bitcoin conference in 2013, StarkWare co-founder Eli Ben‑Sasson introduced early research on what would later evolve into STARKs (Scalable Transparent ARguments of Knowledge). This groundbreaking cryptographic approach was conceived as a way to verify complex computations efficiently without compromising security.

2021 – Laying the Groundwork on Bitcoin

Taproot Upgrade Completion:
Bitcoin’s Taproot upgrade was implemented in 2021, expanding the network’s scripting capabilities and laying the foundation for more advanced features such as OP_CAT. This upgrade was a crucial prerequisite for future innovations in Bitcoin smart contracts and layer‑2 scalability solutions. Starknet will later declare a huge support to OP_CAT, which is essential to their approach to scaling Bitcoin.

June 2024 – Articulating a Unified Vision

“Scaling Bitcoin for Mass Use: A Realistic Vision” Published:
StarkWare published a detailed blog post outlining its vision to scale Bitcoin using STARK proofs. Key proposals include:
- Unified Starknet Layer: Designing Starknet to settle simultaneously on both Bitcoin and Ethereum, thereby unifying the scaling efforts of the two largest ecosystems.
- OP_CAT Advocacy: Publicly supporting and researching the OP_CAT Bitcoin soft fork—a proposal to reintroduce an opcode that would enable recursive covenants and trustless rollups on Bitcoin.
- Research Funding: Launching a $1 million research fund to support studies and proof‑of‑concepts around OP_CAT and validity rollups on Bitcoin.
- Next‑Gen Prover Development: Commissioning work on the next‑generation STARK prover (later named Stwo) optimized over the finite field M31 for efficient verification within Bitcoin’s scripting constraints.
  Check out the Action Zone/Quick Links section at the bottom to learn more about some of these technologies, in case you want to dive deep.

July 2024 – Early Technical Milestones

First Zero‑Knowledge Proof on Bitcoin:
StarkWare achieved a historic milestone by verifying its first zero‑knowledge (ZK) proof on Bitcoin’s Signet testnet using its new STARK verifier. This proof‑of‑concept demonstrated that STARK‑based scaling techniques could be applied to Bitcoin.
Announcement of “Stwo” – The Next‑Gen Prover:
In its July 2024 roundup, StarkWare revealed that work was underway on Stwo, a new prover that promises to be 100×–1000× more efficient than previous systems. Stwo is expected to go into production in early 2025, which will drastically reduce proof generation costs and latency for Bitcoin scaling applications.

Late 2024 – Building Community and Preparing for Scale

Ongoing OP_CAT Research & Public Advocacy:
StarkWare has been actively funding research and engaging with Bitcoin developers to experiment with OP_CAT on testnets. The aim is to refine the technical details, build practical applications (like trustless bridges and recursive covenants), and drive consensus for its eventual adoption on Bitcoin’s mainnet.

StarkWare and Starknet have been systematically building a framework to scale Bitcoin using STARK‑based zero‑knowledge proofs. Their approach combines deep technical innovation (such as the development of the Stwo prover and leveraging OP_CAT) with extensive research funding. The ultimate goal is to create a unified layer‑2 that scales both Bitcoin and Ethereum simultaneously, paving the way for new financial applications, enhanced privacy, and broader global adoption—all while staying true to the decentralized, self‑custodial spirit of Bitcoin.

As Starknet embarks on this ambitious goal, I can’t help but ponder the following.

Acceptance in the Bitcoin Social Layer:
Will StarkWare’s STARK‑based innovations be embraced by Bitcoin’s tight‑knit, tradition‑steeped community? Can these new protocols find favor within Bitcoin’s cultural and social fabric?
Distributing the focus
Could Starknet’s deepening focus on scaling Bitcoin lead the Ethereum community to feel abandoned, ultimately prompting them to sever ties and oust Starknet from the Ethereum ecosystem? Not Eth-Maxi?

The Endgame of Scalability:
Are these technological advancements the definitive solution to crypto’s enduring scalability challenges, or do they represent just one pivotal step in a longer journey towards a truly scalable, interoperable, and culturally unified blockchain ecosystem?