Original title: "Revisiting the Design Logic of Bitcoin Lightning Network from Thunderbolt Lightning Network"

Original author: Ac-Core, YBB Capital Researcher

1. Why can't Bitcoin buy coffee?

When it comes to Bitcoin, what most people think of first are its "decentralized" and "immutable" properties. But when you really want to use it to buy a cup of coffee, you quickly encounter an awkward problem: waiting for transaction confirmation takes longer than waiting for the coffee, and sometimes the transaction fees are even more expensive than the coffee. The assets on Bitcoin are still "as immovable as a mountain" — mainly relying on HODL, and they cannot be loaned, combined, or interoperate.

The script structure of Bitcoin Script is extremely conservative, limiting most off-chain interaction scenarios. Its original design was not intended to handle thousands of payments per second. But the reality is that the demand is there - people just want Bitcoin to be usable, even if it's just to buy a game skin, watch a video, or give a tip, and they don't want to wait ten minutes.

2. Lighting Network: A Double-Edged Sword

Image source: Cointelegraph

The Bitcoin main chain is like a highway, while the Lightning Network is like a toll fast lane built alongside it. Its core concept stems from the compromise on the transaction efficiency of the main chain: since there are speed bottlenecks with on-chain transactions, it no longer insists on recording every transaction on the chain, but instead establishes exclusive "payment channels" between users to achieve high-frequency bookkeeping, ultimately only synchronizing the fund status at the time the channel is closed to the blockchain. This model is similar to the settlement method where friends take turns treating each other weekly—people do not immediately bank transfer after each meal, but rather settle the accounts in one go after accumulating ten expenses. The Lightning Network is essentially a transaction network woven together by tens of thousands of such payment channels.

However, this seemingly ingenious system exposes multiple dilemmas in practical application. First is the high threshold for channel construction, where users must lock funds in advance to establish a trading channel, meaning that to trade with any party, a dedicated channel connection must be set up ahead of time. Secondly, there is the complex routing problem. When user A and B lack a direct connection, even if there is an indirect path A-C-B, if the intermediate channel lacks sufficient funds or the route nodes are unavailable, the transaction will still fail. More severely, there is a security risk. The system requires users to remain online to prevent the counterparty from submitting expired transactions for fraud when the channel is closed, which imposes unrealistic demands on the operational capabilities of ordinary users' devices.

Despite the fact that the Lighting Network has been operational for many years, these structural defects have made it difficult for its actual application to break through the bottleneck. Public data shows that the current total locked funds in the Lighting Network only maintain around 100 million USD, which is nearly marginalized in terms of its ecological status compared to the trillion-level market value of the Bitcoin system. This inevitably raises deep reflections within the industry: Can we build a more complete off-chain payment protocol to break through the existing predicament?

According to Chain Catcher on April 15, HSBC disclosed in an official news release that Bitcoin Thunderbolt is the most significant technological upgrade for Bitcoin in a decade. The overall observation of Thunderbolt resembles "Lighting Network 2.0," but it is not just an upgrade; it is more like a reconstruction of the off-chain Bitcoin interaction paradigm.

3. What is the Thunderbolt Protocol

Source of the image: Nubit | Bitcoin Thunderbolt

Bitcoin Thunderbolt is a soft fork upgrade method based on the Bitcoin base layer. It does not rely on second-layer networks or cross-chain bridge compromises, but directly makes changes at the protocol level of the Bitcoin main chain, fundamentally enhancing Bitcoin's scalability, transaction performance, and programmability.

From a performance perspective, Nubit leverages UTXO (Unspent Transaction Output) Bundling technology to significantly optimize the traditional Bitcoin transaction processing model. The traditional Bitcoin network, which uses a single UTXO model, faces clear limitations in transaction speed and throughput. UTXO Bundling allows multiple UTXOs to be aggregated for processing, effectively compressing the transaction data size, thus increasing transaction speeds by about 10 times without sacrificing security.

In terms of programmability, Bitcoin Thunderbolt reintroduces and expands the OP_CAT opcode (which was originally present in early versions of Bitcoin and later removed). OP_CAT allows for concatenation operations on data, enabling developers to build more complex script logic and directly implement smart contracts on the Bitcoin main chain. The most direct benefit of this upgrade is that developers can deploy decentralized applications (dApps) on the native Bitcoin network without relying on sidechains, Rollups, or cross-chain bridges.

In terms of asset protocol integration, Nubit advocates and implements a unified standard called Goldinals. Goldinals provides an asset issuance framework based on zero-knowledge proofs and state commitments. Simply put, this is a set of "Bitcoin-native" token standards that can verify the existence and status of each token on-chain without relying on external trust institutions or requiring complex cross-chain bridges. BitMM, which operates as an on-chain automated market maker on Bitcoin, integrates fragmented protocol assets such as BRC-20, Runes, and Ordinals. Nubit has also made significant breakthroughs in trustless trading. Its launched BitMM (Bitcoin Message Market) system supports users in conducting trustless trade matching and information verification on the Bitcoin chain.

Unlike traditional scaling approaches (such as sidechains, Plasma, Rollups, or bridging wrapped tokens), Nubit adopts a "native main chain scaling" path. BitVisa provides a decentralized identity and credential system. Whether it is transaction compression, smart contract support, or asset standard integration and on-chain transaction matching—all run directly on the Bitcoin main chain. It uses native BTC, not cross-chain mapped tokens.

3.1 Core Mechanism Analysis

This chapter's content is explained based on the article "Stateless and Verifiable Execution Layer for Meta-Protocols on Bitcoin" (see reference link 1). In my personal understanding, Bitcoin Thunderbolt and Bitcoin Lightning are similar, both proposed as extension solutions to address the slow transaction confirmation issue on the Bitcoin main chain, with the core goal of improving efficiency and reducing costs. The difference between the two is:

The design of the Lightning Network is more inclined towards "payment channels" - it can only be used for transfer payments, does not support smart contracts or complex logic, and has a high threshold for construction and maintenance, which is not conducive to large-scale popularization. Thunderbolt, launched by Nubit, is committed to providing an off-chain protocol with programming capabilities, supporting Turing-complete operations, and able to build more complex state assets, liquidity protocols, and financial applications.

Flexible and adjustable multi-signature

Imagine splitting a Bitcoin "signature" in half: one half in Alice's hands and the other half in the committee's hands. Each time a new user is transferred, Alice and the committee each "add a little secret" to their respective halves of the signature — only the receiving new user knows this secret. The receiver can use the little secret they know to "stitch" the two halves back together to obtain the complete signature without needing Alice and the committee to communicate online.

Asynchronous Fault-Tolerant Committee Ledger

A "service group" composed of several nodes (such as 4n+1) is responsible for keeping the accounts, and everyone confirms who the current owner is. Even if a few nodes go bad, as long as the majority are still online, the ledger can continue to function normally. These nodes only "help with signing" and "keeping accounts" and cannot arbitrarily use the funds, ensuring security and decentralization.

Atomic Swap Finalization

When you really want to spend this money on-chain, first go through three steps of "atomic swap":

1. Alice+ spends the original locked output and temporarily gives the money to the committee;

2. The committee locks an equivalent amount in a vault that can only be accessed by both "Zenni and the committee" together;

3. Finally, Zenni takes the money from the safe using two signatures.

In this way, neither Zenni nor the committee can take a shortcut, ensuring that off-chain reconstruction and on-chain redemption are completed seamlessly.

3.2 The Protocol Design and Key Innovations of Thunderbolt

· Non-interactive, recursive signature delegation

A tweakable threshold Schnorr signature structure has been designed, where traditional payment channels often require several back-and-forth messages, Thunderbolt only needs to "send a signature with a small secret" each time, greatly reducing online requests.

· Each transfer uses a "new lock"

Every time a transfer occurs, Alice and the committee use a new small secret to update the signature, and the old "lock" is completely invalidated. This way, anyone who was involved previously cannot obtain the new signature, preventing the old signature from being reused.

· Leave a trace on the chain only once

Only lock it on-chain once at the beginning, and all subsequent changes are made off-chain, then finally go on-chain to spend this money. Compared to the Lightning Network, which requires continuously opening and closing channels, Thunderbolt has fewer on-chain operations and better privacy.

· You won't lose money even when offline

Even if Alice or Zenni are offline, as long as the majority of the committee is online, the transfer or redemption can be completed at any time, without worrying about the time lock expiring or the opponent maliciously closing the channel.

· True "Machine Proof" Security

All key steps in the protocol have undergone "formal verification" using Tamarin Prover, which means these security guarantees are not just theoretical, but have been repeatedly checked by automated tools.

4. How is Thunderbolt different from existing Lighting Network solutions?

Let's take a look at the comparison between Thunderbolt and existing solutions (such as the BOLT protocol, Breez SDK, and Phoenix) to see what improvements it has made.

The difference between Thunderbolt and existing Lighting Network solutions:

We can see that the main advantages of Thunderbolt lie in "security" and "theoretical completeness". It is one of the few that can achieve:

· The protocol design can be proven to be secure.

· Malicious users cannot profit unilaterally under any circumstances.

But its disadvantages are also very obvious:

· Deployment is complex: To use Thunderbolt, you currently need to run the entire protocol stack, which is difficult for ordinary wallet users to get started.

· Main Chain Compatibility: The scripting language of the Bitcoin main chain is too simplistic, and Thunderbolt must implement functionality through clever workarounds, which increases the difficulty of implementation.

· Ecological support is still lacking: Unlike BOLT, which already has a large number of wallet and node supports, Thunderbolt is currently in the "early research stage."

5. The Potential Impact of Thunderbolt: A Catalyst for BTCFi?

Source of the image: self-made

So is Thunderbolt the optimal solution for BTCFi? Let's throw out a bold idea:

Thunderbolt is currently the theoretically optimal solution for BTCFi, but in practice, it is still in the "Alpha stage"; in other words, it is like the "Ethereum 2.0 white paper" in the Bitcoin world, full of vision but not yet at the level of engineering system implementation. Based on current observations, I believe there are three potential development paths for Thunderbolt:

1. Integrated as a Rollup: The DeFi Engine on Bitcoin Side

The Bitcoin main chain itself lacks scalability, and Thunderbolt may eventually become an off-chain module on a certain Bitcoin L2 (such as BitVM, Nomic, BOB). This is similar to integrating Thunderbolt as a general contract execution layer in a Rollup.

For example:

· BOB can integrate Thunderbolt channel layer to achieve native BTC transactions.

· The RGB ecosystem may also introduce Thunderbolt state management logic.

· BitVM itself supports more complex logic, Thunderbolt will become one of the contract standards.

· Services such as Babylon, Bitlayer and other systems

2. Form an independent standard ecosystem and run in parallel with the main chain

Thunderbolt's greatest potential is to develop its own network ecosystem, node operation and maintenance system, aggregators, etc., similar to the Lighting Network, and even form Thunderbolt-LSP operators. At the same time, Nubit, in conjunction with miners from the Satoshi Nakamoto era, promoted a protocol layer soft fork upgrade, introducing two major features: UTXO Bundling and OP_CAT, which can directly accommodate BTC protocol assets (BRC20, Runes, Ordinals). This presents a vast space for imagination. Perhaps in the future, it may have:

· Thunderbolt Wallet (similar to Phoenix)

· Thunderbolt Node (Light Node Operation Channel)

· Thunderbolt DEX (off-chain order matching)

· Thunderbolt AMM (Liquidity Pool)

3. Replaced by a simpler solution

Of course, if a system emerges in the future that can achieve similar functions without state channels, formal languages, or off-chain protocol cooperation, then Thunderbolt may only be a transitional product, much like:

· BitVM aims to achieve a more efficient contract execution environment.

· Cross-chain ZK technology allows BTC assets to be fully trusted and deployed on other chains.

· A certain native Bitcoin protocol unifies payment + lending + contract modeling.

Finally, from an ecological perspective, the biggest significance of Thunderbolt is not that it can run payments, but that it allows Bitcoin assets to have off-chain contract composability for the first time. This sounds abstract, but the importance of this "composability" can be seen from the explosion of DeFi on Ethereum. The explosion of Ethereum is attributed to the complete ecosystem of Solidity + Hardhat + Ethers.js + Metamask.

The biggest highlight of Thunderbolt is still the introduction of two major features: UTXO Bundling and OP_CAT. OP_CAT introduces native programmability to the Bitcoin network, while UTXO Bundling ( bundles multiple small transactions together for processing, compressing the size of transaction data and increasing on-chain throughput, similar in logic to Ethereum Rollup. It seems that unifying all Bitcoin ecosystem protocols and accommodating various assets and BitMM implementations is no longer just talk, but Thunderbolt still seems like a strong mathematical paper at this stage, and there may still be a significant distance before it is usable by developers.

This article is from submissions and does not represent opinions.

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