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Solving Bitcoin’s gas issue (without a fork)

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Frederic Fosco

Disclosure: The views and opinions expressed here belong solely to the author and do not represent the views and opinions of crypto.news’ editorial.

Every smart contract platform has a fee asset baked in. For example, Ethereum (ETH) has ETH, Solana (SOL) has SOL, but with Bitcoin (BTC), however, things get messy. If you want expressive apps, you usually end up adopting a second network’s economics. 

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Summary

  • Bitcoin doesn’t price computation, only block space. Unlike Ethereum or Solana, BTC’s fee market is built around sat/vB for transaction inclusion, not metering smart contract execution.
  • Execution can move off-chain while settlement stays on Bitcoin. Systems like OpNet run contract logic in a Wasm VM while anchoring payments and final state changes through normal BTC transactions.
  • BTC can function as the gas asset without a new token. By pricing execution costs in satoshis and settling interactions through Bitcoin transactions, apps avoid creating a second fee economy.

On Stacks, for example, you pay fees in STX. On EVM-style Bitcoin layers, you might be told that BTC is the gas token, but it’s typically an L2-native representation with EVM-like conventions (including 18 decimals), and you’re still operating inside that L2 environment. Bitcoin itself, meanwhile, already has a clean fee market, where users bid for block space in sat/vB, and miners prioritize higher fee rates.

With this in mind, what if a smart contract interaction could be initiated and paid for as a normal Bitcoin transaction, with fees in BTC terms (no extra gas token or fork) while the smart part runs elsewhere and stays provably tied back to Bitcoin? OpNet is setting out to provide an answer. 

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Bitcoin doesn’t meter compute (that’s a problem)

Bitcoin’s fee market is excellent at one thing: pricing block space. You compete in sat/vB, miners pick the highest fee rates, and the network stays simple and adversarially robust. What Bitcoin does not do is run a general-purpose execution environment where the chain can measure and charge for arbitrary computation. Bitcoin Script is deliberately stateless and not Turing-complete, specifically lacking loops or gotos, so every node can validate scripts predictably without opening the door to unbounded computation.

That’s why most Bitcoin smart contract approaches end up placing execution on a separate system that can meter compute and run a fee market of its own. Once you have that separate execution layer, it usually comes with a separate fee asset (Stacks, for instance, charges fees in STX).

This isn’t ideal, and a system where you could keep payment within Bitcoin’s native fee market while moving execution elsewhere would be preferable.

Execution isn’t what Bitcoin needs to do

Once you accept that Bitcoin Script is intentionally limited (stateless and not designed for unbounded computation), you start thinking about how to make Bitcoin settle the results and the payments.

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Indeed, execution can happen in a dedicated virtual machine that’s built to run smart contract logic deterministically, while Bitcoin remains the base layer that timestamps, orders, and prices the interactions through its existing fee market.  In OpNet’s design, contract logic is evaluated by a Wasm-oriented VM (OP-VM), while the broader node stack is explicitly built to manage and execute smart contracts using Bitcoin’s existing transaction and UTXO mechanics.

Crucially, this isn’t paired with a new fee asset. Bitcoin doesn’t need to meter computation to be the gas currency. It needs to be the final settlement layer that everything ultimately pays into and anchors to.

What a BTC-paid contract call looks like

Our interaction model follows a simulate-then-spend flow rather than a conventional smart contract execution pattern, with the final execution step taking place as an actual Bitcoin transaction. First, your app calls a contract method in simulation mode. That request goes through a provider to an OPNet node, which executes the contract in its VM and returns a CallResult (including gas/fee estimates) without broadcasting anything to Bitcoin.

If the call is state-changing, you take that CallResult and send it as an execution. At this point, the library builds a Bitcoin transaction, signs it, and broadcasts it to the Bitcoin network. Two points are worth remembering:

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  • Miner fees are Bitcoin-native. You choose a feeRate in sat/vB, optionally add a priorityFee in sats, and set a hard cap on fee spending via maximumAllowedSatToSpend (the parameter is literally named maximumAllowedSatToSpend).
  • The contract target is expressed as a P2OP-style contract address. The contract instance exposes its p2op address format, and transactions reference a “p2op contract address” as the contract destination.

Meanwhile, OpNet’s own compute metering still exists. But it’s priced in satoshis (estimated SATS Gas, refunds in SATS, etc.), so the unit never drifts into a separate token economy. 

Less friction, cleaner incentives

Users no longer have to adopt a second fee economy just to interact with apps. On Bitcoin, fees are already an auction for block space, priced per byte and paid to miners. When contract calls are just Bitcoin transactions, you’re back on familiar ground (with sat/vB fees, mempool churn, and miner incentives), without having to learn a separate gas token market.

Also, the tooling leans into standard Bitcoin workflows such as UTXO handling, provider connections, and even offline/cold signing. Contracts live in a Wasm runtime and are written in AssemblyScript, aiming for Solidity-like expressiveness without pretending Bitcoin Script suddenly became a VM.

Bitcoin as gas, without a second token

The claim that BTC cannot function as gas usually rests on the assumption that the base layer must meter computation to price it. Bitcoin does not meter computation; it meters block space and settles value. 

The solution is to let a virtual machine handle execution deterministically, and then route every state-changing interaction through a standard Bitcoin transaction, where fees are expressed in familiar terms such as sat/vB and capped in satoshis. In our case, this is implemented at the client level through parameters like feeRate and maximumAllowedSatToSpend.

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So maybe BTC-as-gas is truly plausible. Fees stay BTC-native from end to end, while the contract runtime stays WebAssembly-based (AssemblyScript → Wasm), which keeps the logic expressive without changing the fee currency.

Frederic Fosco

Frederic Fosco

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Frederic Fosco, also known as Danny Plainview, is a co-founder of OP_NET and has been involved in Bitcoin since 2013. He launched OP_NET to make Bitcoin natively programmable, unlocking smart contracts and DeFi primitives directly on layer-1. His focus is building real on-chain functionality without bridges, custodians, wrapping, or synthetic Bitcoin, keeping self-custody and decentralization non-negotiable.

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Crypto World

JPMorgan Flags Sharp Divergence Between Bitcoin and Gold ETF Flows Since Iran War

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The correlation between Bitcoin (BTC) and gold has snapped under the pressure of the Iran conflict, according to a note to investors by JPMorgan.

While geopolitical instability usually drives a unified bid for safe havens, the two assets are currently moving in opposite directions.

This decoupling reveals a significant shift in how capital is treating “digital gold” versus the real thing.

Instead of moving in tandem as crisis hedges, investors are aggressively rotating capital, creating a clear winner in the ETF market since late February.

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Discover: The best crypto to buy now

What the JPMorgan ETF Flow Data Actually Shows About Bitcoin

Since the conflict escalated on Feb. 27, JPMorgan analysts report a stark divergence in capital flows. The largest gold ETF, SPDR Gold Shares (GLD), has bled outflows totaling roughly 2.7% of its assets under management.

In contrast, BlackRock’s iShares Bitcoin Trust (IBIT) absorbed inflows equaling roughly 1.5% of its assets during the same window.

JPMorgan analysts, led by Managing Director Nikolaos Panigirtzoglou, highlighted in their recent note to investors that this reverses the trend seen earlier in the year when gold funds held the advantage.

The data is unambiguous. While gold has traditionally been the default safety trade during Middle East tensions, capital is currently voting for Bitcoin exposure.

Institutional positioning generally reflects a shift away from bullion in favor of the spot Bitcoin ETFs, despite the higher volatility inherent in crypto assets.

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Interestingly, IBIT inflows since the start of 2024 are now roughly double the total accumulation seen by GLD, further cementing the shift in dominance among exchange-traded products.

Is Bitcoin Replacing Gold as the Crisis Hedge?

The divergence goes deeper than headline flows. JPMorgan notes that while spot Bitcoin ETFs are seeing inflows, institutional derivatives markets paint a more cautious picture. Hedge funds appear to be reducing direct Bitcoin exposure even as ETF buyers step up.

Short interest in IBIT has actually increased since the conflict began, while GLD short interest declined. This narrows the gap between the two, suggesting that hedge funds are hedging their crypto bets while favoring gold for pure defensive positioning.

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This creates a complex market structure. Retail and registered investment advisors (RIAs) are likely driving the ETF bid, treating Bitcoin as a risk-off asset alongside the dollar. Meanwhile, sophisticated desks are hedging downside risk as oil surges past $100, a macro factor that typically pressures risk assets.

Options activity supports this cautious institutional stance. The demand for downside protection in Bitcoin has risen, contrasting with the relentless buying pressure in the spot ETF market. However, the sheer magnitude of the rotation, selling gold to buy Bitcoin, suggests the “digital gold” narrative is holding up under fire better than skeptics anticipated.

Bitcoin Price Prediction: Can BTC Hold the $70,000 Level?

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Price action remains resilient despite the mixed signals from derivatives markets. Even with war-driven inflation fears dominating the headlines, Bitcoin is trading above $70,000, showing strength where legacy assets have faltered.

JPMorgan Flags Sharp Divergence Between Bitcoin and Gold ETF Flows Since Iran War
Source: TradingView

Bull Scenario: If ETF inflows persist at this 1.5% pace, Bitcoin targets the $80,000 resistance band. Clearing that level opens the path to retest all-time highs. JPMorgan’s own valuation models have previously flagged Bitcoin as undervalued relative to gold regarding volatility-adjusted capital, suggesting room for an upside squeeze.

Bear Scenario: Should macro liquidity tighten further, support sits firm at $64,000. A break below this level would validate the rising short interest and likely force a flush of the recent leverage. Traders must watch the $70,000 midpoint closely; losing it would signal that the safe-haven bid has exhausted itself.

The next major catalyst isn’t just on the chart; it’s at the Federal Reserve. If oil prices stay high, inflationary pressure could force central banks to keep rates elevated longer, testing the resilience of both gold and Bitcoin.

Discover: The next crypto to explode

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Hong Kong to Approve First Stablecoin Licenses for Banks

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Hong Kong to Approve First Stablecoin Licenses for Banks

HSBC Holdings and a joint venture led by Standard Chartered are reportedly set to become the first authorized stablecoin issuers in Hong Kong.

The Hong Kong Monetary Authority (HKMA) is expected to issue stablecoin licenses to HSBC and Standard Chartered, the South China Morning Post reported Thursday, citing people familiar with the matter. HSBC and Standard Chartered are set to be in the first batch as authorities reportedly prioritize institutions already authorized to issue banknotes in the city.

The Hong Kong government, through the HKMA, authorizes banknote issuance to three commercial banks, including local branches of HSBC, Standard Chartered and the Bank of China.

The Hong Kong Monetary Authority has not confirmed the names of any successful applicants. Standard Chartered declined to comment, and HSBC did not immediately respond to a request for comment.

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The approvals would mark a major step toward Hong Kong’s ambition to become a global digital asset hub despite neighboring mainland China reportedly making it harder to launch stablecoins in the region.

HKMA targets the first stablecoin licenses in March

According to the SCMP, the number of licenses and timetable had yet to be finalized and remained subject to change, but the sources indicated a possible date on March 24.

Though unconfirmed, potential stablecoin issuer licenses for HSBC and Standard Chartered would align with earlier reports that the HKMA planned to grant the first licenses in March 2026.

Hong Kong has not yet approved any stablecoin issuer. Source: HKMA

HKMA Chief Executive Eddie Yue said in February that the regulator expects the first batch of stablecoin issuer licenses to include a “very small number” of issuers.

The Hong Kong government enforced the Stablecoin Ordinance, a statutory framework for regulating stablecoins, in August 2025, making it illegal to offer or promote unlicensed fiat-referenced stablecoins to retail investors.

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Related: China’s Alibaba joins stablecoin platform MetaComp’s $35M fundraise

In September, the HKMA said it received applications from 36 institutions for a license to issue stablecoins. HSBC and Standard Chartered were among the institutions that were reported to be planning to apply, alongside the Industrial and Commercial Bank of China.

Magazine: China’s ‘50x’ blockchain boost, Alibaba-linked AI mines Bitcoin: Asia Express