Community Treasuries and Governance Coming to Bitcoin Via Bitpacs
Bitpacs are bringing functionality similar to decentralized autonomous organizations (DAOs) on platforms like Ethereum to Bitcoin. Bitpacs utilize Bitcoin's inherent capabilities to enable transparent and verifiable community treasuries, fundraising, governance, and more.
The key innovation is the use of public multisignature Bitcoin wallets. While multisig wallets usually obscure signers, Bitpac signers are publicly identified. This transparency allows for on-chain verification of Bitpac operations and votes. Basic DAO-like functionality can thus be achieved without changes to Bitcoin's protocol.
As of February 2024, Ethereum DAOs hold over $35 billion in funds. Bitpacs make similar community treasuries and governance possible on Bitcoin. Use cases include funding open source Bitcoin projects, managing organizational funds, crowdfunding, and enabling group decisions on spending.
Bitpacs ensure no single entity unilaterally controls funds. Required signing thresholds for transactions mimic DAO voting thresholds. Time constraints can be imposed on voting periods. Platforms building on Bitpacs can gate membership based on transparent on-chain criteria.
Bitpacs exemplify that Bitcoin can continue innovating without protocol changes. In the coming years, thousands more niche Bitcoin communities likely will emerge, all potentially using Bitpacs for organizational needs. In a future hyperbitcoinized world, block space may be so scarce that only high-value Bitpac transactions occur on Bitcoin's base layer.
Bitpacs have advantages over sidechains and layers built on Bitcoin. Bitpac members vote directly on base layer treasury transactions without intermediaries. This avoids needing to trust additional protocols.
Overall, Bitpacs promise to bring transparent and innovative community functionality native to Bitcoin. With tooling in development, Bitpacs may soon see wide adoption among Bitcoin users and organizations. Their emergence continues to demonstrate the versatility inherent in Bitcoin.
