Bitcoin Developers Divided Over Economic Viability of New BitVM Bridge Model

BitVM bridges allow BTC to connect to other blockchains, but have an "optimistic reimbursement" model that requires operators to front withdrawal payments. This could put user funds at risk if operators lack sufficient liquidity.

Critics like Bitcoin developer Tyler Whittle say BitVM bridges are "inherently economically unstable" due to the need for operators to front withdrawals before getting reimbursed.

BitVM proponents argue withdrawal limits and additional operators can mitigate liquidity risks, though some like Eric Wall grew more skeptical upon learning of the limitations.

BitVM creator Robin Linus showed frustration with critics like Wall, claiming they unfairly attack BitVM without understanding it.

Typical BTC bridges use custodian models where users trust federation members not to steal funds. But BitVM aims to bridge BTC in a decentralized way, introducing economic stability issues.