Bitcoin is at the edge of a new chapter in its evolution. In your publication «Yellow Paper» (or the technical manual), RGB 1.0, presented as a new tool that opens the door to intelligent contracts for Bitcoin, promises to enrich the network with advanced features, maintaining its decentralized and secure nature.
RGB 1.0 is integrated to work with the second layer (L2) such as the main network and lightning network (LN), betting L2 Improve privacy and scalabilityopening space for decentralized applications (DEFI) built directly into Bitcoin.
On August 12th, he marked a milestone in RGB development. The bridge that USDT moved from Ethereum to RGB was successfully achieved for the first time, and through this protocol it was also marked a historic entrance to the Bitcoin ecosystem.
With this integration, USDT settles on Bitcoin, circulates between RGB and RGB-Lightning, maintains privacy by default, providing a safe and efficient solution.
This RGB bridge unlocks Bitcoin liquidity and opens up new possibilities for a decentralized financial ecosystem.
What is RGB I.0?
As mentioned earlier, RGB I.0 is a Bitcoin L2 based on the smart contract system for working on the main network, Lightning, and other second-tier networks of this ecosystem.
One of its use cases is the LN network Run and manage An intelligent contract that this system enables.
Bitcoin is safe, but can be slow and expensive to process many small or frequent transactions, especially when interacting with complex contracts.
LN solves this by creating a “payment channel” between users. These channels allow transactions (such as forwarding active tokens in RGB I.0) Almost instantaneously at a minimum ratewithout registering each step in the basic layer.
RGB I.0 can use its L2 to enable micropago or applications, such as instant voting games and systems, in real time.
The main purpose of RGB I.0 is to take Bitcoin beyond its traditional features Send the valueTurn into a versatile platform for Defi applications and intelligent contracts.
This means that users can manage contracts rather than relying on external platforms Using Bitcoin as a base, directly with each other.
Potential use cases:
- Private and scalable intelligent contracts:
RGB I.0 may allow the creation of complex contracts, such as remittances (product delivery) that are completed only if the conditions are met, or emissions of custom tokens representing assets such as properties and digital art.
By maintaining details outside the public network, Users can protect your personal informationan important aspect for people who value privacy.
- Complete dispersal:
Unlike some systems that require centralized nodes (single entity control servers), RGB I.0 eliminates this need and can be tailored to Bitcoin principles that do not trust intermediaries.
This could increase resistance to censorship. This is a potential benefit for users of countries with government restrictions.
If you register only the lowest commitments on your network (32 bytes per operation rather than full data), then RGB I.0 Process far more transactions and contracts without saturating the Bitcoin networkwhich reduces costs and latency.
Some possible cases of using RGB I.0:
- Create a decentralized real estate market where purchase and sales agreements will be automatically executed when payment is received.
- Manage distributed insurance if the claim is paid only if the event is validated (for example, natural disasters).
- It promotes anonymous donations to nonprofits and maintains the identity of donors.
- Implement online store loyalty systems or rewards based all on Bitcoin.
How does it work?
The behavior of RGB I.0 is based on the following combinations of technologies:
- Customer verification (Client-side verification):
Unlike networks such as Ethereum, where smart contracts (automated contracts) that are stored and processed directly on the network, RGB I.0 takes a different approach.
This system uses what is called Customer verification (Client side verification, (in English). This means that the details of the contract are stored and verified on the user’s personal devices (such as a computer or phone), and only small “commitments” (32-byte encryption summary) are registered with the Bitcoin network.
This reduces the work of miners (the person who handles transactions) and makes the network more efficient when it decreases The amount of data stored in the chain.
- Single use seal (Disposable stickers):
These are like “digital locks” that guarantee that contracts or actives can only be used once.
For example, if Alice sends Bob a transferable asset in an intelligent contract, the seal “brokes” (consumption) in the transaction, and cannot be reused. This is linked to UTXO (Unbound Transaction Output) like “drawers” of Bitcoin that contains available funds. This mechanism Prevents double costsan important issue with cryptocurrency.
- ZK-Starks (Scalable, transparent and zero knowledge discussion):
These are encryption tests that allow people to confirm that the contract is valid without revealing details. For example, you can see that someone else has certain digital assets without knowing who they originally created.
Lass ZK-Starks They are “scalable” (which can handle large contracts) and “transparent” (which does not depend on private keys), but generate large trial files that may require more storage.
- Anchor structure (anchor):
RGB contracts “anchored” to the Bitcoin chain through transactions that include commitments. This anchor acts as a public time seal. moreover, Shard (Splitting into data splitting) allows you to group several operations into a single transaction, optimizing network usage.
- Typical RGB 1.0 flow:
Alice creates a local agreement on the device and generates a cryptographic commitment. This commitment is fixed to Bitcoin UTXO through transactions.
Bob validates the contract with his own copy of data and Anclado’s commitment. The transfer is complete Off-chain (outside the chain), and only new commitments to Bitcoin are recorded.
This contrasts with other networks such as Ethereum, where every step of a contract (creation, verification, execution) is stored and processed directly in a chain. It’s expensive and publishes public dataRGB i.0 reduces network load and protects privacy by handling most of the work locally.
Bitcoin RGB Protocol programming language
For different lanes and from the perspective of programming languages, developers are highlighting that they can use rust (for example, Solana) to create simple contracts to take advantage of robustness and accessibility.
For more complex projects, ALUVM Virtual and its AluAssembly language are used, specifically designed for high performance and safe environments.
This integration suggests that RGB performs advanced logic efficiently. Create applications with greater versatility And it’s all about it, while maintaining the robustness and privacy of the Bitcoin ecosystem.
Additionally, the team is working with Contractum, a new development language that promises to simplify and enhance the creation of intelligent contracts.
What are the challenges in RGB 1.0?
While RGB I.0 offers exciting possibilities, it also faces challenges to consider.
Customer verification requires users to process their own software and data. For beginners, structuring an RGB portfolio can be as complicated as assemble a puzzle without instructions. Unless a simple interface is developed.
Implementation error Zk-Starks O single use seal They can allow someone to take the assets or manipulate the contract.
Additionally, if the user is not protecting the device (for example, Malware), and Atacher can change local data.
- Limited scalability by users:
Bitcoin is lighter, but user devices need to handle complex contracts. On older computers and basic phones, this can be slower. Create practical limits.
Therefore, RGB I.0 is presented as an interesting proposal that can redefine the future of Bitcoin and translate from platforms of intelligent contracts and decentralized applications.
However, as a technology recently announced on August 1, 2025, it is still in its early development stages and has to wait for its evolution and adoption.