In brief
- Built for formal verification, Simplicity avoids recursion, loops, and global state.
- Simplicity runs on the federated Bitcoin sidechain, Liquid.
- The project aims to attract institutions with auditable contracts for finance, custody, and asset issuance.
Bitcoin infrastructure company, Blockstream, is betting it can do what others have failed to do: bring working smart contracts to the Bitcoin network.
On Thursday, Blockstream, a Canadian Bitcoin infrastructure firm that builds tech for decentralized finance, launched Simplicity, a smart contract programming language for its Liquid sidechain. The goal is to bring Ethereum-style functionality to Bitcoin, without the bloat or security risks.
Smart contracts have long been a missing piece of Bitcoin’s blockchain. While Ethereum and other blockchains offer programmable features, Bitcoin has resisted similar expansion, both for technical and ideological reasons.
According to Blockstream Head of Research Andrew Poelstra, Simplicity is the firm’s attempt to bridge that gap. By supporting more advanced smart contracts natively, Poelstra claims Simplicity could enable a range of financial tools, such as vaults, delegated control, and threshold signatures, directly into the Bitcoin protocol.
“As Bitcoin’s dominance continues to grow, it’s becoming increasingly clear that it will serve as the world’s most secure digital store of value,” Poelstra told Decrypt. “This approach extends Bitcoin’s utility beyond just holding value, positioning it as a programmable platform for financial infrastructure.”
According to Bob Bodily, co-founder of the Bitcoin Ordinals project Odin.fun, while developers have worked to bring smart contracts and DeFi to the Bitcoin network, its base layer was never built for the complex logic needed to allow smart contracts, and that’s where the technical limitations start to show.
“Because you only have Bitcoin script on Bitcoin L1 in terms of smart contracts, it’s just very limited. It’s not a Turing-complete programming language,” Bodily told Decrypt. “You have a lot of missing OP codes or other things that you might need with other, more expressive systems. And because of that, you can’t do everything that you might want to do on Bitcoin L1.”
Blockstream said Simplicity avoids features that have led to bugs and hacks on other platforms. It took aim at Solidity—the language behind Ethereum’s smart contracts—for allowing things like recursion, endless loops, and global state, which make code more powerful but also riskier and harder to predict.
By removing these factors, Simplicity claims to provide a safer, more predictable, and resource-efficient execution by preventing infinite computations and limiting contracts to self-contained, auditable, and explicitly defined logic.
While this may limit what developers can do, Blockstream says the trade-off is worth it.
“The ability to mathematically prove how a contract will behave before runtime on-chain eliminates entire classes of bugs common in DeFi that have kept large institutions from meaningfully participating in the ecosystem until now,” Poelstra said.
Simplicity, first proposed in 2012, is built for Bitcoin’s UTXO system. UTXO stands for Unspent Transaction Output—it’s how Bitcoin keeps track of who owns what. Unlike Ethereum’s account-based system, Bitcoin sees each transaction as using up old coins and creating new ones.
Simplicity tries to sidestep those limitations by running on Blockstream’s layer-2 network that supports faster, more private transactions.
Simplicity doesn’t run directly on Bitcoin, but on a federated sidechain managed by the Liquid Federation. That means it isn’t a fully open, permissionless network like Bitcoin or Ethereum. Bodily pointed out that this setup could raise concerns about censorship, centralization, and whether it will gain widespread adoption over time.
“You run into centralization and censorship concerns, and a million trade-offs—not just on the technical layer, but also legal, programmability, speed, and governance,” he said. “Everyone’s trying different approaches, making trade-offs, looking for a Bitcoin use case that fits what people want to do.”
For now, Simplicity runs on Liquid—but its long-term potential lies in how, and if, it eventually makes its way to the Bitcoin layer one blockchain.
“If adopted on Bitcoin in the future, Simplicity could position Bitcoin as a programmable settlement layer for all institutional-grade finance, without sacrificing Bitcoin’s core principles,” Poelstra said.
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