Bitcoin-IPC Whitepaper: Scaling Bitcoin with a Network of Proof-of-Stake Subnets
For Bitcoin users and developers, this provides a scalable, programmable Layer-2 solution that preserves Bitcoin's security and decentralization.
Bitcoin-IPC scales Bitcoin to over 160 tps (up from 7 tps) by enabling permissionless PoS Layer-2 subnets that use Bitcoin L1 for settlement, reducing virtual-byte cost per transaction by up to 23x without modifying Bitcoin L1.
We introduce Bitcoin-IPC, a software stack and protocol that scales Bitcoin towards helping it become the universal Medium of Exchange (MoE) by enabling the permissionless creation of fully programmable Proof-of-Stake (PoS) Layer-2 chains, called subnets, whose stake is denominated in L1 BTC. Bitcoin-IPC subnets rely on Bitcoin L1 for the communication of critical information, settlement, and security. Our design, inspired by SWIFT messaging and embedded within Bitcoin's SegWit mechanism, enables seamless value transfer across L2 subnets, routed through Bitcoin L1. Uniquely, this mechanism reduces the virtual-byte cost per transaction (vB per tx) by up to 23x, compared to transacting natively on Bitcoin L1, effectively increasing monetary transaction throughput from 7 tps to over 160 tps, without requiring any modifications to Bitcoin L1.