Bitcoin smart contracts

Bitcoin smart contracts live in a colder, leaner language called Script, and they feel like metal keys and iron locks under a sky of politics and desire. Script is native to Bitcoin and lets transactions carry conditions. It is not Turing complete and it lacks many opcodes that other chains use to read and write global state. Bitcoin records ownership through UTXOs and not a mutable state, so contracts are limited but predictable. Contracts on Bitcoin work by locking an output with a condition and requiring a matching key or proof to spend it. The simplest form is pay-to-public-key-hash, where a recipient must prove control of a private key to claim funds. Multisignature schemes require multiple signatures to spend and add shared custody and safety. Time-locked transactions use fields like nLockTime and nSequence to postpone spending until a block height or time, which enables delayed payments and many conditional flows. Pay-to-script-hash lets a sender lock funds to a script’s hash so the full script appears only when spent, which keeps complex rules off the chain until needed. Taproot and its pay-to-taproot style let parties combine possible scripts into a single public output and reveal only the branch actually used, improving privacy and efficiency. Miniscript is a developer-friendly layer that rewrites common spending patterns into safer, auditable templates so wallets can build advanced custody schemes without bespoke code. Outside raw on-chain scripts, new experiments attach data to satoshis and create simple token standards that can feel like NFTs or fungible tokens, though they compete for block space and change fee dynamics. To extend capabilities without changing Bitcoin’s core security, layer-2 solutions move execution off-chain. One such layer routes instant, cheap payments through payment channels and supports hashed time-locked contracts for atomic swaps and streaming payments. It also enables oracle-based agreements called discreet log contracts for settled bets without dragging oracles into the settlement. Other companion chains bring richer smart contract languages and consensus designs that anchor to Bitcoin for security while offering dApp platforms and naming systems. Security for interacting with these contracts starts with key custody. Using hardware wallets keeps private keys offline and forces clear signing so users can inspect what they approve. Learn the lock-and-key logic, know the contract types, and treat private keys like the last ember in a city of ash.