Preface

Fractal Bitcoin builds a scalable computing system based on Bitcoin Core through recursive virtualization. Unlike traditional scaling methods that introduce new structures, Fractal Bitcoin achieves efficient blockchain scaling while preserving the original network security and consistency of BTC. On September 9, 2024, Fractal Bitcoin Mainnet officially launched, which is the only native solution that recursively extends and achieves infinite hierarchical expansion through BTC core code.

The launch of Fractal is in stark contrast to most EVM-compatible BTC layer 2 solutions, as it adheres to the native architecture of BTC and therefore receives high attention from the ecosystem. Fractal Bitcoin not only brings new functionality but also introduces the OP_CAT opcode, further enhancing the platform's development potential. Developers see Fractal as an "innovation playground," which is expected to trigger a wave of innovation on the BTC network.

The background of the birth of Fractal Bitcoin

The essence of Fractal Bitcoin is to solve the scaling problem of the BTC network. With the rapid rise in the volume of the BTC network, the BTC network is facing problems such as long transaction confirmation times and high fees. Although BTC has introduced second-layer solutions such as the Lighting Network, these technologies typically rely on infrastructure and are relatively complex to operate.

To this end, the UniSat team has proposed the concept of Fractal Bitcoin, aiming to improve network performance without changing the core protocol of BTC. Fractal Bitcoin achieves this by recursively creating a multi-layer structure to enhance processing power and speed, while ensuring seamless compatibility with the Mainnet and smoothly integrating into the existing BTC ecosystem.

As the world's first solution based on Bitcoin Core code that can recursively extend to unlimited levels, Fractal Bitcoin achieves high scalability, supports Internet-level applications, and maintains consistency with BTC's core security and consensus mechanism.

Fractal Bitcoin is regarded as an 'innovation platform' for the BTC ecosystem, providing developers with flexible tools and APIs, especially in terms of deploying OP_CAT, expanding the possibilities for technical experiments.

Overview of Fractal Bitcoin

BTC compatibility: fully compatible (recursive instance of Bitcoin Core software)

Consensus: Proof of Work (standard SHA256d)

Mining: Merged Mining (2/3 Permissionless Mining + 1/3 Merged Mining)

Block time: every 30 seconds

Native Token: FB

BRC-20 / Ordinal: 100% standard compatible

Address format: BTCAddress format

Stable Coin: BRC-20 Stable Coin

Packaged BTC: Packaged BRC-20

TPS: 120+ per instance

Ecosystem: BTCprotocol and toolset inherited from nature

Operation Mechanism of Fractal Bitcoin

Recursive Virtualization

The core innovation of Fractal Bitcoin lies in its recursive virtualization technology. By establishing multiple levels on-chain in BTCBlock, each level operates independently while remaining anchored to the BTCmainchain. This design ensures the security of the underlying BTC and the Consensus Mechanism consistency between the layers in Fractal Bitcoin. Similar to the way Virtual Machine runs multiple operating systems on a single physical device, this technology achieves scalability while isolating without significantly increasing system burden.

Scalability

With the increasing application of blockchain technology, the demand for processing power and storage resources has also risen, and Fractal's layered architecture provides a flexible scaling solution. The architecture of Fractal is similar to the fractal pattern in mathematics, with fractal characteristics, and each layer is a scaled-down version of the BTC network. By recursively generating new layers, the system is able to effectively cope with the constantly rising transaction demand, avoiding network congestion. Each layer is connected to the mainchain, allowing parallel processing of a large number of transactions, thereby improving network efficiency. This design not only ensures the efficient operation of the system but also lays the foundation for future network growth and technological innovation.

Dynamic Load Balancing

Fractal Bitcoin also has dynamic load balancing functionality to ensure the smooth operation of the network. With the fluctuation of network demand, the system can intelligently allocate resources and evenly distribute transaction pressure to different levels, avoiding a single layer from bearing the main load. Even during peak transaction periods, this mechanism can guarantee the stability and efficiency of the network, similar to automatic resource scheduling in traditional cloud computing systems.

Technology Innovation and Advantages

When expanding blockchain technology, ensuring security and consistency is a core challenge. Fractal Bitcoin effectively addresses this issue by adopting the Proof of Work (PoW) mechanism of BTC. Each extension layer generated through recursive virtualization inherits the security features of BTC, ensuring that regardless of how the system expands, the security and consistency of the network remain consistent with BTC.

Faster Block Confirmation

Fractal Bitcoin shortens the Block confirmation time to about 30 seconds, which is 20 times faster than BTC's 10-minute confirmation speed. This optimization not only speeds up transaction processing, but also enhances network responsiveness, especially suitable for high-frequency trading and applications. The shorter confirmation time effectively alleviates on-chain congestion issues related to BRC-20 Tokens, Ordinals, and Runes, providing users with a smoother usage experience.

Efficient Asset Bridging

Fractal Bitcoin supports efficient asset bridge functionality, allowing the secure transfer of various digital assets, including BRC-20 Tokens, Ordinals, and Runes, between multiple network layers. Through a dynamically replaceable multi-party computation (MPC) signature system, this feature ensures the security and efficiency of asset transfers. Additionally, users can operate without the need for wrapped Tokens, preserving the native nature and integrity of the assets while dropping the complexity of transfers.

Smart Contract functionality

By implementing the OP_CAT opcode, Fractal achieves Turing Complete Smart Contracts on the BTC-based platform. OP_CAT was originally part of the BTC script language. This opcode concatenates two stack items, merging them into one item. For example, if there are two strings or numbers on the stack, OP_CAT will merge them into one. This functionality enables the development of advanced Decentralized Finance protocols, complex Non-fungible Token mechanisms, and other Decentralization applications that were previously limited to the Ethereum platform.

Mining Mechanism

Fractal introduces a unique hybrid mining mechanism. Two out of every three blocks are generated through permissionless mining, while the remaining one is generated through BTC merged mining. This innovative design allows individual miners to freely participate in the generation of most blocks, promoting decentralization. At the same time, by utilizing the powerful computing power of the BTC network through BTC merged mining in one out of every three blocks, Fractal enhances its own security. This mechanism ensures network security while preserving the characteristics of decentralization, and further enhances the vitality and stability of the Fractal network by incentivizing the participation of existing BTC miners.

Economic Model

Fracta has designed a comprehensive tokenomics model that ensures the long-term sustainability of the project and brings maximum value to the community and investors.

Token Details

Name: FB (Fractal Bitcoin)

Max Supply: 2.1 billion

Total supply: 105,153,225.00000000

Circulating Supply: 1,213,225.00061300

主要用途：Money Laundering（Fractal ecosystem internal）

Secondary uses: voting, applications

Token Allocation

The Token distribution strategy of Fractal aims to promote network security, incentivize rise, and reward key contributors to the entire ecosystem. The specific distribution is as follows:

• Proof of Work Mining（50%）: 50% of the total supply is allocated to Proof of Work (PoW) Mining. This important allocation tightly integrates Fractal with the security model of Bitcoin (BTC), ensuring network security and reliable Block production.

Source: Fractal Bitcoin Official Documentation

• Ecosystem Treasury (15%): This portion is used to invest in the Fractal ecosystem, to support and fund projects that improve the ecosystem, and to provide funding for the continuous core improvement of Fractal. Within 10 years, up to 10% of this pool can be used annually.
• Community Fund (10%): Used to establish partnerships and Liquidity plans. These community-led initiatives are designed to increase network participation over time. Similar to the ecosystem reserve, this pool can use up to 10% annually for a period of 10 years.
• Presale (5%): This portion is allocated to early investors to pay for initial development and operational costs, as well as for security audits. These Tokens have a seven-month lock-up period and will be linearly released thereafter until the end of twelve months.
• Advisor (5%): Reserved for current and future advisors, who will provide strategic advice and support for the continuous development of Fractal. Up to 20% may be used annually.
• Core Contributors (15%): Allocated to individuals building and maintaining Fractal's core software. These Tokens follow the same lock-up and release schedule as the pre-sale Tokens.

Source: Fractal Bitcoin Official Documentation

The advantages and shortcomings of Fractal Bitcoin

Advantages

Scalability improvement: Fractal significantly enhances the network's scalability through a recursive expansion layer architecture, enabling it to handle more transactions and complex smart contracts without affecting overall performance.

Maintaining BTC Features: Fractal Bitcoin maintains compatibility with the core code of BTC, retains the security and decentralization characteristics of BTC, and realizes functional expansion at the same time.

Weakness

Architectural Complexity: The introduction of fractal structure increases the complexity of the network, which may require more time for ordinary users and developers to adapt to and understand this new design.

Centralization risk: If the expansion layer is controlled by a few entities, it may bring certain centralization risks, although this is contrary to the original intention of Decentralization.

Technical Risks: The implementation of new technologies always comes with risks, including potential software vulnerabilities, security issues, etc., which may affect the stability of the network.

Problems and Challenges Faced

• Connectivity and Interoperability: If Fractal Bitcoin fails to achieve seamless integration with the BTC network, or to provide efficient and secure solutions for asset transfer in Cross-Chain Interaction, it may be considered an isolated system. This will directly impact the assessment of its practical application value by users and developers.
• Community trust challenge: The BTC community has always been cautious about new projects, and building trust usually takes a long time. Fractal Bitcoin must prove the feasibility of its technology and demonstrate sufficient attractiveness in terms of economic model, security, and ecosystem construction to gain the support of users and developers.

Conclusion

There is still controversy over whether the BTC ecosystem needs a functional public chain. BTC L2 public chains launched earlier, such as Merlin and B² Network, have not gained widespread user favor, and most related assets have only reached the Airdrop and Mining stages. It is worth following that Fractal Bitcoin adopts an independent PoW Mining mechanism, showing the characteristics of a Sidechain, and maintains early project enthusiasm by attracting the participation of the Miner community. In the future, it is expected to explore innovative models different from the ETH-based Decentralized Finance ecosystem or new types of token issuance such as BTC BRC20, Rune, etc., and promote industry development.

Overall, the fractal technology of Fractal Bitcoin provides potential for expansion and innovation to the BTC network, but it also brings challenges in terms of technology and governance. Its success depends on the community's acceptance, technical performance, and balance of BTC's core features.