Bitmain is the world’s largest producer of Bitcoin mining hardware. The company’s co-CEO, Jihan Wu, delivered the keynote address at The Future of Bitcoin Conference 2017. In his speech, Wu outlined several innovations he believes Bitcoin should adopt to support long-term growth. He emphasized the importance of smart contracts, creating economic incentives for full nodes and stakeholders, and using extension blocks to introduce experimental features safely.
Bitcoin Is Missing Smart Contracts and ICOs
Wu highlighted that the surge of initial coin offerings (ICOs) built on Ethereum has been one of the most significant recent developments in the cryptocurrency space, and he would like to see similar innovation on Bitcoin. According to Wu, smart contracts represent a major advancement that Bitcoin has largely missed.
He recalled early experiences in the crypto economy, noting his investment in ASICMINER, a Bitcoin mining hardware company that raised funds on GLBSE, an unregulated Bitcoin-denominated exchange. That platform, he said, functioned like a centralized precursor to today’s ICO market and ultimately closed abruptly, leaving many users uncertain about ownership of their assets.
Wu argued that the legal exposure and operational risk of centralized, unregulated exchanges and token offerings make a strong case for issuing assets on a blockchain. Ethereum’s ERC20 token standard is an example of how token issuance can be standardized on a smart contract–enabled platform. While acknowledging that many ICOs have been fraught with scams, Wu suggested that token sales remain a useful mechanism for entrepreneurs to raise funds from the public in a decentralized way.
He noted that token issuance on Bitcoin already exists in simpler forms—projects and wallets have provided ways to create tokens on top of Bitcoin—but added that Bitcoin’s scripting capabilities are limited compared with platforms designed for more complex decentralized applications. For that reason, Wu pointed out Bitmain’s early investment in RSK, a Bitcoin sidechain that brings Ethereum-like smart contract functionality, as an example of efforts to bridge that gap.
Wu also suggested that transparent funding mechanisms, such as ICOs, could be used to support Bitcoin protocol development. He urged developers and organizations working on open-source Bitcoin projects to be forthcoming about how they intend to fund their work rather than obscuring revenue models.
Economic Incentives for Full Nodes
Wu advocated for designing economic incentives that extend beyond miners to other participants in the Bitcoin network, such as long-term coin holders and full node operators. He observed that some competing blockchains have implemented models that reward holders and node operators, encouraging long-term stewardship of the network and participation in governance and technical decisions.
Though he did not specify a particular rival project by name, Wu indicated that Ethereum’s planned transition from proof-of-work to proof-of-stake embodies this type of incentive structure. He acknowledged that many in the Bitcoin community view some of these features skeptically, even as he believes certain ideas merit consideration and experimentation.
Finding sustainable incentives for running full nodes has been a long-standing conversation within the Bitcoin ecosystem. Wu emphasized that economic models encouraging broader participation could help strengthen the network by rewarding those who maintain and verify the blockchain over time.
Extension Blocks
Another topic Wu discussed was extension blocks, a concept proposed as a way to introduce new features to Bitcoin without requiring immediate changes to the main protocol. Extension blocks operate like a special sidechain that full nodes and miners can opt into while still having their consensus rules verified by the broader network.
Wu described extension blocks as voluntary and experimental: participants who choose to use them accept the risks associated with new, unproven features. If an extension block encounters problems, the impact is confined to those who opted in, minimizing disruption to the main chain. He cited smart contracts and privacy- and scaling-focused proposals such as Mimblewimble as examples of innovations that could be trialed via extension blocks.
He also noted that discussions around sidechains and extension blocks have included documented considerations of the risks involved, underscoring the need for careful design and testing.
In closing, Wu called for more experimentation within Bitcoin development. He acknowledged the difficulty of introducing changes safely—“it’s quite easy to introduce bugs in Bitcoin protocol implementations,” he said—but argued that progress requires trying new approaches despite the likelihood that many efforts will fail. Wu urged the community to support thoughtful experimentation to discover successful innovations that can strengthen Bitcoin over the long term.