I haven't heard of Glitter before. Here is the transcript:

Hello, I don’t think I know most of you, so hi, I’m Perry. I’m the CTO of Glitter, a seed-stage company building in Bitcoin. Today, I’m going to briefly talk about the protocol and how I see potential future applications, including novel e-cash schemes. Our idea revolves around building smart contract functionality into Bitcoin, which is a significant challenge that many are tackling. These challenges include block space and block time limitations compared to Ethereum, the UTXO model's constraints, the need for deterministic outcomes, and the absence of contract custody. There are proposals and improvements, such as various BIPs, that could help address these issues. My primary focus today, however, is on contract custody and drawing inspiration from Ethereum to adapt it to Bitcoin.

Ethereum uses an account model rather than a UTXO model, allowing for global state maintenance where contracts are called on-chain. The outcomes are assumed rather than explicitly committed on-chain. This creates a unique custody model where contract accounts hold funds without private keys, introducing an intermediate custody system governed by consensus. This contrasts with Bitcoin's deterministic methods, like DLCs or taproot trees, where all possible outcomes must be predetermined. A contract with intermediate custody allows for non-deterministic inputs and outputs resolved later.

The Glitter protocol aims to implement this intermediate custody within Bitcoin. It’s a UTXO-based protocol built on OP_RETURN, without using a VM, and relies on a secondary consensus network. This design facilitates contract accounts capable of consensus-based custody, enabling non-deterministic outcomes. For instance, in a DeFi setting, such a system could support features like AMM pools without requiring multiple rounds of signatures. Unlike existing systems, the Glitter protocol creates a custody-by-consensus mechanism where no private keys control funds; the network consensus validates their existence. This approach seeks to balance custody properties and operational efficiency while remaining within Bitcoin's script limitations.

Regarding e-cash, this was not the protocol's original focus. However, as I prepared for this conference, I realized its potential for novel e-cash systems. A high-level idea involves a mint-style contract where users deposit funds directly. The contract holds custody through consensus, ensuring robustness even if signers go offline or act adversarially. Vouchers signed by a designated public key can be redeemed later, regardless of the signer’s status, as the contract custody remains intact. This contrasts with systems like Lightning, where trust in custodians or federations is essential. Users can verify the honesty of signers before pushing transactions, offering additional security.

While this design addresses certain issues, such as fault tolerance and Byzantine robustness, there are limitations. Transactions are slow and expensive due to Bitcoin’s block time, and there’s a risk of double-spend attempts within the same block. Addressing these drawbacks may involve protocol-level decisions like first-in, first-out resolution or burning contested funds. Despite these challenges, the protocol is designed to be efficient, with constant-time verifiable transactions and minimal state requirements.

I believe this design could significantly improve e-cash systems by enabling interoperability and reducing reliance on custodial trust. However, I acknowledge the constraints, such as block time and the need for on-chain transactions, which affect scalability. Potential solutions include integrating Lightning or rollups for batching transactions. Additionally, exploring trade-offs like Merkle roots versus Bloom filters, or introducing zero-knowledge proofs, could enhance efficiency and privacy.

In conclusion, this is a high-level overview of the Glitter protocol and its potential for e-cash applications. I’m eager to hear thoughts and suggestions for improvement. There’s immense potential to refine this design, such as achieving transferable e-cash, optimizing storage, and exploring faster validation methods. Innovations like zero-knowledge proofs or reputational systems could further advance this field. Thank you for listening.