Bitcoin Cross-Chain Bridge: A Taxonomy and Its Promise in Artificial Intelligence of Things
Guojun Tang, Carylyne Chan, Ning Nan, Spencer Yang, Jiayu Zhou, Henry Leung, Mohammad Mamun, Steve Drew
TL;DR
Bitcoin interoperability remains a bottleneck for DeFi and AIoT adoption. The paper proposes a taxonomy of cross-chain bridges—naive token swaps, pegged-asset bridges, and arbitrary-message bridges—and analyzes them along trust models, latency, capital efficiency, and DeFi compatibility, highlighting BitVM and recursive sidechains as promising futures. The literature review covers atomic swaps, payment channels, collateralized vaults, on-chain relays, BitVM, external verifiers, and sidechains, mapping their security and performance trade-offs. The work applies the taxonomy to AIoT use cases in energy trading, healthcare data integration, and supply chain, illustrating practical deployment patterns and providing a framework for secure cross-chain infrastructure design.
Abstract
Bitcoin's limited scripting capabilities and lack of native interoperability mechanisms have constrained its integration into the broader blockchain ecosystem, especially decentralized finance (DeFi) and multi-chain applications. This paper presents a comprehensive taxonomy of Bitcoin cross-chain bridge protocols, systematically analyzing their trust assumptions, performance characteristics, and applicability to the Artificial Intelligence of Things (AIoT) scenarios. We categorize bridge designs into three main types: naive token swapping, pegged-asset bridges, and arbitrary-message bridges. Each category is evaluated across key metrics such as trust model, latency, capital efficiency, and DeFi composability. Emerging innovations like BitVM and recursive sidechains are highlighted for their potential to enable secure, scalable, and programmable Bitcoin interoperability. Furthermore, we explore practical use cases of cross-chain bridges in AIoT applications, including decentralized energy trading, healthcare data integration, and supply chain automation. This taxonomy provides a foundational framework for researchers and practitioners seeking to design secure and efficient cross-chain infrastructures in AIoT systems.