A programmable application that is executed on the Bitcoin network. Bitcoin was created as a digital payments system, not a programmable smart contracts platform like Ethereum. However, Bitcoin does have inherent scripting capability that enables it to perform functions such as requiring multiple parties to sign off on a transaction or wait a certain amount of time before coins are spendable. Although a Bitcoin script has been called a smart contract in the past, it is nowhere near as flexible (see
Bitcoin Script and
smart contract).
Sidechains and Ordinal
Sidechains such as Rootstock and Stacks are independent networks that run alongside Bitcoin and do offer smart contract capability (see
sidechain).
In 2021, the Taproot enhancement to the Bitcoin protocol added more options, and the Bitcoin Ordinals protocol takes advantage of this (see
Bitcoin Ordinals and
Taproot).