Comprehensive Interpretation of .bit: The Most Promising DID Project in the Bitcoin Ecosystem

**Recently, the decentralized identity protocol .bit, owned by d.id, announced the completion of the RGB++ upgrade! The .bit project was launched in November 2020, went live on the Nervos CKB mainnet in July 2021, and completed a $13 million Series A financing round in 2022. The core team members of .bit come from major internet companies and have been deeply involved in the blockchain industry for many years before working on the .bit project. They have accumulated extensive experience and successfully created several well-received blockchain products, demonstrating keen insight into product details and user needs.

As a decentralized identity protocol (DID), .bit surpasses other similar products in terms of user experience. .bit not only supports multiple chain wallets such as Ethereum, BNB Smart Chain, Polygon, TRON, and Dogecoin, but also allows users to register and manage accounts using Passkey, eliminating the need for private keys, passwords, and gas fees throughout the process. This truly achieves what founder Tim Yang has always emphasized: "shielding complex technical issues and presenting simple products to users." Additionally, .bit is the first DID to implement the functionality of sub-accounts.

Currently, .bit has nearly 100,000 registered users. With the completion of the RGB++ upgrade, .bit, leveraging the homogeneity binding feature of CKB, officially becomes a Bitcoin layer-one DID asset, serving the identity needs of Bitcoin ecosystem users and potentially becoming the most promising DID project in the Bitcoin ecosystem.

.bit: Originating from Bitcoin, Returning to Bitcoin#

.bit has a deep connection with Bitcoin. In the early days of Bitcoin, Satoshi Nakamoto envisioned the establishment of a decentralized Bitcoin Domain Name System (BitDNS). The core goal of BitDNS was to create a domain name ownership registration system based on cryptographic proof, independent of any centralized institution, and ultimately realize a Bitcoin-based DID system to promote the widespread adoption of Bitcoin. Unfortunately, this vision was not implemented at that time.

The founder of .bit, Tim Yang, previously worked at Tencent and Thunder, and has been involved in Bitcoin for a long time, being attracted by its elegant design. After leaving Thunder, Tim chose to enter the blockchain industry and gained rich experience in the field. In Tim's mind, he has always hoped to realize Satoshi Nakamoto's vision of running DID on Bitcoin. In 2018, Tim noticed Ethereum Name Service (ENS), and with his keen intuition, he concluded that ENS already had the embryonic form of DID. He urgently felt that the Bitcoin ecosystem should also have its own DID. In 2019, Tim formed a team to work on a similar product on Bitcoin. Although they completed the development and deployment of a test version, they eventually chose to give up because Bitcoin, while strong and reliable, had a very high barrier to entry and could not serve a wide range of organizations and individuals.

In 2020, through the introduction of the founder of UniPass, Tim learned about Nervos CKB, which uses the same PoW consensus mechanism and UTXO model as Bitcoin and is completely homologous to Bitcoin. CKB supports custom cryptographic primitives, eliminating the need for users to worry about private keys. Moreover, CKB improves the UTXO model, making CKB UTXOs (Cells) serve as asset containers, cleverly eliminating the need for users to worry about transaction fees when operating assets. This makes it possible to serve a wide range of organizations and individuals and achieve large-scale adoption. As a result, the project was restarted and named .bit, simplifying Satoshi Nakamoto's original vision. With the technical expertise accumulated by the .bit team over the years and the technical advantages of CKB, .bit was launched in just 8 months.

Earlier this year, CKB adjusted its positioning and transformed into an L2 that is completely homologous to Bitcoin, fully embracing the Bitcoin ecosystem. In early April, the Bitcoin layer-one asset issuance protocol RGB++, proposed by Cipher, co-founder of Nervos CKB, officially went live. Through homogeneity binding technology, it achieved seamless cross-chain transactions between Bitcoin and CKB blockchains. The underlying asset types of .bit before the upgrade were significantly different from the RGB++ protocol, so the .bit team chose to completely refactor the project. After the upgrade, .bit can now become a Bitcoin layer-one DID through the homogeneity binding technology of RGB++, realizing the initial vision of running on Bitcoin.

Therefore, .bit originates from Bitcoin and now returns to Bitcoin.

.bit: More Powerful and Diverse Inscription Assets#

After the RGB++ upgrade, .bit is truly a Bitcoin layer-one inscription asset. Compared to other BRC-20 and ARC-20 inscription assets, .bit is more powerful in terms of functionality and offers more diverse gameplay.

Firstly, .bit is a practical Bitcoin inscription asset. The most basic function of .bit is to serve as a "domain name" for the blockchain, responsible for blockchain address resolution and reverse resolution. For example, if a user registers or purchases a .bit account, such as btcman.bit, they can map it to multiple addresses, such as BTC addresses starting with bc1p, ETH addresses starting with 0x, CKB addresses starting with ckb, TRX addresses starting with T, and so on. The benefit of this is that when someone wants to send funds to the user, they only need to enter their .bit account instead of the long, difficult-to-read, and hard-to-recognize native blockchain addresses. Currently, .bit supports address resolution for nearly 40 different public chains, making it a unified receiving account for most cryptocurrencies. Reverse resolution refers to the use of a wallet to log in to websites or applications, where the account name is no longer the native long address of the blockchain but the user's .bit account.

Secondly, .bit is also a Bitcoin layer-one DID asset that can meet the identity needs of Bitcoin ecosystem users. Users can add their social accounts, email addresses, personal profiles, preferences, or any other publicly available data to their .bit accounts. This way, users have a completely uncensorable personal information homepage. Additionally, this personal information homepage will automatically display NFTs, POAPs, badges, etc., associated with the owner address of the .bit account on multiple chains. Of course, .bit accounts can also be registered using various languages from around the world, including emojis, to meet users' demand for personalized identities, such as jacky.bit, 杰克.bit, 😄.bit, etc.

Finally, this upgrade also makes .bit compliant with the Spore DOB standard, giving .bit composability and more gameplay options. Spore is a digital object (DOB) creation protocol on the CKB blockchain, and well-known DOBs created using the Spore protocol include Nervape and Unicorn. The upgraded .bit DOB can be combined with these existing digital objects. For example, the accessories of Nervape can have the .bit logo, allowing the user's online identity and the digital object they own to merge seamlessly, creating greater imaginative possibilities.

Competitive Analysis#

The main competitors of .bit currently include ENS in the Ethereum ecosystem, as well as TNA, RNS, BRC-137, and Spaces Protocol in the Bitcoin ecosystem.

ENS went live in April 2017 and is backed by the entire Ethereum ecosystem. It is currently the highest market value and most registered users among DID projects. However, ENS does not support cross-chain functionality and has high registration and usage barriers. In comparison, .bit not only supports multiple chain wallets such as Ethereum, BNB Smart Chain, Polygon, TRON, and Dogecoin, but also allows users to register and manage accounts using Passkey, eliminating the need for private keys, passwords, and gas fees. In other words, .bit allows users to use blockchain without touching any complex technical concepts, truly achieving low barriers to entry, and enabling anyone to use .bit without any knowledge of Web3.

TNA is a Bitcoin domain name service based on the Taproot Assets protocol. Its domain name assets are compatible with both the Bitcoin mainnet and the Lightning Network's UTXO model. This compatibility allows users to flexibly use domain name assets on the Bitcoin network, whether for secure transfers on the mainnet or fast payments on the Lightning Network. Additionally, TNA also supports subdomain services. However, TNA currently lags behind .bit in terms of multi-chain support, functionality, registration and usage barriers, and ecosystem development.

RNS (Realm Name System) is a domain name system based on the Atomicals protocol. Compared to ENS, it has higher scalability and flexibility while retaining decentralization. Specifically, the RNS domain name protocol allows any user to issue subdomains under any RNS domain name, managing the domain name ecosystem in a layered and hierarchical manner and tokenizing it. Theoretically, there is no limit to the number of extensions for RNS subdomains, which brings a lot of imagination to the RNS domain name system. However, the registration rules for RNS are complex, and multilingual support requires conversion to Punycode for registration, increasing the usage barrier. Additionally, the system has a relatively short history, and its development is still being observed.

BRC-137, based on the Ordinals protocol, aims to achieve "composable" DID in the Bitcoin ecosystem, empowering users to monetize their digital identities and facilitating value exchange and social ecosystems on-chain. Currently, the BRC-137 protocol has completed a $2.5 million seed round of financing, but its product is still in the early stages.

Spaces Protocol is also a Bitcoin domain name protocol. "Spaces" serves as a community identifier and is distributed through an auction process built using existing Bitcoin script functionality. The revenue generated from the auction will be irreversibly burned. Within each space, users can create "subspaces" that operate on-chain in a highly autonomous manner without the need for trust. However, they can also directly submit transactions on-chain. Currently, Spaces Protocol is still in the testnet stage and will take a long time to truly land as a product.

Compared to the above competitors, .bit has the advantages of more functionality, lower barriers to entry, stronger composability, and, thanks to RGB++'s homogeneity binding technology, .bit domain name assets can securely cross-chain between different UTXO chains (currently Bitcoin and CKB, and potentially other chains issued through UTXO Stack).

Conclusion#

"We cannot underestimate the significance of DID for humanity because humans are social animals, and identity is the starting point of social relationships. Freedom of identity that does not depend on issuers is the starting point of freedom. With identity, we can discuss various rights, including property rights, just as we can use a website's services after registering an account. When we have an identity entity that is generated and used independently of any entity, we can discuss the establishment of data ownership."
— — Excerpt from "DID Industry Research Report"

The importance of DID is self-evident. After more than 7 years of development, ENS, the DID project with the most registered users, currently has a market value of $870 million, which is about 0.2% of Ethereum's market value. Bitcoin's market value is three times that of Ethereum, and the Bitcoin ecosystem is just beginning. As a DID project in the Bitcoin ecosystem, .bit surpasses ENS in terms of functionality, scalability, usage barriers, and multi-chain support. Therefore, .bit has the potential to become the most promising DID project in the Bitcoin ecosystem, with a bright future ahead.

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