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Basic Bitcoin

View this sample's code on GitHub

Overview​

This tutorial will walk you through how to deploy a sample canister smart contract that can send and receive Bitcoin on the Internet Computer.

Architecture​

This example internally leverages the ECDSA API and Bitcoin API of the Internet Computer.

For a deeper understanding of the ICP < > BTC integration, see the Bitcoin integration documentation.

Prerequisites​

Step 1: Building and deploying sample code​

Clone the smart contract​

To clone and build the smart contract in Motoko:

git clone https://github.com/dfinity/examples
cd examples/motoko/basic_bitcoin
git submodule update --init --recursive

Acquire cycles to deploy​

Deploying to the Internet Computer requires cycles (the equivalent of "gas" in other blockchains). You can get free cycles from the cycles faucet.

Deploy the smart contract to the Internet Computer​

dfx deploy --network=ic basic_bitcoin --argument '(variant { testnet })'

What this does​

  • dfx deploy tells the command line interface to deploy the smart contract
  • --network=ic tells the command line to deploy the smart contract to the mainnet ICP blockchain
  • --argument '(variant { Testnet })' passes the argument Testnet to initialize the smart contract, telling it to connect to the Bitcoin testnet

We're initializing the canister with variant { Testnet }, so that the canister connects to the the Bitcoin testnet. To be specific, this connects to Testnet3, which is the current Bitcoin test network used by the Bitcoin community.

If successful, you should see an output that looks like this:

Deploying: basic_bitcoin
Building canisters...
...
Deployed canisters.
URLs:
Candid:
    basic_bitcoin: https://a4gq6-oaaaa-aaaab-qaa4q-cai.raw.icp0.io/?id=<YOUR-CANISTER-ID>

Your canister is live and ready to use! You can interact with it using either the command line or the Candid UI, which is the link you see in the output above.

In the output above, to see the Candid Web UI for your bitcoin canister, you would use the URL https://a4gq6-oaaaa-aaaab-qaa4q-cai.raw.icp0.io/?id=<YOUR-CANISTER-ID>. Here are the two methods you will see:

  • public_key
  • sign

Step 2: Generating a Bitcoin address​

Bitcoin has different types of addresses (e.g. P2PKH, P2SH). Most of these addresses can be generated from an ECDSA public key. The example code showcases how your canister can generate a P2PKH address using the ecdsa_public_key API.

On the Candid UI of your canister, click the "Call" button under get_p2pkh_address to generate a P2PKH Bitcoin address.

Or, if you prefer the command line:

dfx canister --network=ic call basic_bitcoin get_p2pkh_address

  • The Bitcoin address you see will be different from the one above because the ECDSA public key your canister retrieves is unique.

  • We are generating a Bitcoin testnet address, which can only be used for sending/receiving Bitcoin on the Bitcoin testnet.

Step 3: Receiving bitcoin​

Now that the canister is deployed and you have a Bitcoin address, it's time to receive some testnet bitcoin. You can use one of the Bitcoin faucets, such as coinfaucet.eu, to receive some bitcoin.

Enter your address and click on "Send testnet bitcoins". In the example below we will use Bitcoin address n31eU1K11m1r58aJMgTyxGonu7wSMoUYe7, but you will use your address. The canister will be receiving 0.011 test BTC on the Bitcoin Testnet.

Once the transaction has at least one confirmation, which can take a few minutes, you'll be able to see it in your canister's balance.

Step 4: Checking your bitcoin balance​

You can check a Bitcoin address's balance by using the get_balance endpoint on your canister.

In the Candid UI, paste in your canister's address, and click on "Call".

Alternatively, make the call using the command line. Be sure to replace mheyfRsAQ1XrjtzjfU1cCH2B6G1KmNarNL with your own generated P2PKH address:

dfx canister --network=ic call basic_bitcoin get_balance '("mheyfRsAQ1XrjtzjfU1cCH2B6G1KmNarNL")'

Checking the balance of a Bitcoin address relies on the bitcoin_get_balance API.

Step 5: Sending bitcoin​

You can send bitcoin using the send endpoint on your canister.

In the Candid UI, add a destination address and an amount to send. In the example below, we're sending 4'321 Satoshi (0.00004321 BTC) back to the testnet faucet.

Via the command line, the same call would look like this:

dfx canister --network=ic call basic_bitcoin send '(record { destination_address = "tb1ql7w62elx9ucw4pj5lgw4l028hmuw80sndtntxt"; amount_in_satoshi = 4321; })'

The send endpoint can send bitcoin by:

  1. Getting the percentiles of the most recent fees on the Bitcoin network using the bitcoin_get_current_fee_percentiles API.
  2. Fetching your unspent transaction outputs (UTXOs), using the bitcoin_get_utxos API.
  3. Building a transaction, using some of the UTXOs from step 2 as input and the destination address and amount to send as output. The fee percentiles obtained from step 1 are used to set an appropriate fee.
  4. Signing the inputs of the transaction using the sign_with_ecdsa API.
  5. Sending the signed transaction to the Bitcoin network using the bitcoin_send_transaction API.

The send endpoint returns the ID of the transaction it sent to the network. You can track the status of this transaction using a block explorer. Once the transaction has at least one confirmation, you should be able to see it reflected in your current balance.

Conclusion​

In this tutorial, you were able to:

  • Deploy a canister smart contract on the ICP blockchain that can receive & send Bitcoin.
  • Use a cycles faucet to deploy the canister to ICP blockchain on the mainnet for free.
  • Connect the canister to the Bitcoin testnet.
  • Send the canister some testnet BTC.
  • Check the testnet BTC balance of the canister.
  • Use the canister to send testnet BTC to another BTC address.

This example is extensively documented in the following tutorials:

Security considerations and best practices​

If you base your application on this example, we recommend you familiarize yourself with and adhere to the security best practices for developing on the Internet Computer. This example may not implement all the best practices.

For example, the following aspects are particularly relevant for this app: