Because Bitcoin lacks the luxury of smart contracts, enforcing rules about the flow of funds—and the governance of those rules—has been a huge barrier for Bitcoin developers. (In fact, many Bitcoin protocols have resorted to centralized architectures and third-party custodians!)

Enter hardware-enshrined smart contracts, a solution we've developed using our CubeSigner key management platform! They allow Bitcoin protocols to encode complex operational logic (e.g., deposited funds can only be used for Babylon staking with a chosen Finality Provider) and maintain decentralized governance (e.g., with multi-party approvals and waiting periods).

Hardware-enshrined contracts serve the same purpose as traditional smart contracts: controlling how a given address uses funds. They consist of two components:

1. A secret key that can send and receive funds to its address. This key is generated in CubeSigner’s secure hardware and signs all transactions in secure hardware.

2. A policy attached to the key that dictates fund usage, specifying, for example, that a key can only transfer funds to certain addresses or within set limits.

Our hardware-enshrined contracts are paving the way for sophisticated Bitcoin applications to offer the same security guarantees as familiar Ethereum protocols. Already, they are helping protocols like @Lombard_Finance enforce crucial fund usage rules and prevent attacks.

Learn more in our blog post: https://t.co/LbNvzhIgbK