This paper presents a virtualization approach that expands the processing capacity of the Bitcoin network recursively. By adopting this method, the system can be scaled natively and unlimitedly, while maintaining consensus consistency. The approach retains all existing Bitcoin engineering implementations, ensuring operational-level integrity with the Bitcoin blockchain. In comparison to hybrid systems that introduce non-Bitcoin constructs, this self-replicating system offers advantages in terms of robustness, elasticity, and reusability. Furthermore, the system achieves unlimited computational processing capacity recursively.
Due to security considerations, Bitcoin has implemented limitations on opcodes and block storage space in its iterations. While these constraints have restricted the scalable use of Bitcoin, they have also contributed to the stability of the network. As a result, Bitcoin has established itself as a foundational presence in the cryptocurrency industry over the past decade. Additionally, technologies like SegWit and TapRoot are continuously evolving to preserve and enhance Bitcoin's programmability.
In 2023, the emergence of Ordinals and related applications garnered significant attention, redirecting developers' focus towards the extensive application potential of Bitcoin. Assets and protocols such as brc-20, which are based on Ordinals inscriptions, started appearing on Bitcoin, highlighting its relatively restricted processing capacity as a blockchain. Effectively addressing this limitation becomes an pressing concern for developers.
Fractal Bitcoin is a self-replicating method that extends the Bitcoin network recursively through virtualization. The main goal is to expand the Bitcoin system as a whole using its existing engineering constructs since 2009, without introducing additional constructs from other blockchains.
Fractal Bitcoin is not a form of forking; it processes transactions similar to Bitcoin but across multiple layers. Each tier of Fractal Bitcoin utilizes Bitcoin's implementation, highlighting unique fractal characteristics.
A Simple Fractal Tree & Mandelbrot Set – Periodicities (from Wikipedia)
A fractal is a pattern that remains consistent at every scale and repeats itself over time. This fractal structure enables the system to have unlimited processing capacity by continuously expanding into new layers.
The value of Bitcoin, as a single blockchain, comes from its widespread recognition and solid engineering foundation. Therefore, it is crucial to maintain native engineering constructs as much as possible when extending Bitcoin from a single blockchain to a multi-layered system.
The first step is to fully virtualize Bitcoin Core. This involves encapsulating the entire Bitcoin Core into a deployable and runnable blockchain software package called Bitcoin Core Software Package (BCSP). By doing so, we can independently run one or more instances of BCSP with recursive anchoring on the Bitcoin mainnet.
In the evolution of operating systems, there has been a shift to virtualization. Running multiple Guest OSes on the Host OS provides isolation, flexibility, recoverability, and reusability at the operating system level. Modern virtualization enables efficient hardware performance sharing through containerization, allowing multiple instances with minimal host system overhead.
By using Bitcoin Core as the stable host chain, we can achieve blockchain virtualization by customizing BCSP with various parameter sets for multiple guest chains.
BCSP being instantiated