This is a shortened edition of John Light’s “Validity Rollups on Bitcoin” research paper that can be found at bitcoinrollups.org.

I tried to make an easier to digest version so that more people can find the time and motivation to read it.

If you want an introduction to validity proofs and rollups, also called zero-knowledge, you can check my article on the subject.

Table of contents:

My takes from the paper

Validity rollups advantages for Bitcoin

Validity rollups represent an opportunity to scale and/or improve Bitcoin notably because of the following aspects:

1. They are non-custodial by design.
2. They can improve scalability from 3-4x to ~35x depending on the system implemented.
3. They can improve privacy by a lot if certain protocols are included in the rollup’s design, like ZeroCash and shielded transactions (see Aztec).
4. They would be interoperable with, and even improve, the Lightning Network, Bitcoin’s main L2.

The scalability versus privacy tradeoff

There is likely a tradeoff between improving scalability and privacy (2. and 3. above). We can summarize this tradeoff by looking at the three different implementations example in this paper:

• An account-based rollup could increase throughput by ~35x, but change the privacy assumptions of Bitcoin.
• A UTXO-based rollup would increase throughput by 3-4x without any changes to Bitcoin transactions’ privacy.
• A shielded transactions rollup (implementing ZeroCash) would actually slightly decrease theoretical transactions throughput, but increase a lot privacy by hiding origin, destination, and amount of each transactions.

The risks vs benefits dilemma