Yes, Starknet helps Ethereum scale. It makes transactions faster and cheaper. But the bigger story Starknet wants to tell is about turning “verifiable computation” into a much larger highway: first serving Ethereum, and eventually trying to bring Bitcoin onto that road as well.

Put simply, Starknet started as an Ethereum scaling solution. Its ambition is to connect Bitcoin.

So What Exactly Is Starknet

Starknet is a Layer 2 network built on top of Ethereum. It moves large volumes of transactions off the Ethereum mainnet, executes them elsewhere, and then sends the results back to Ethereum together with a mathematical proof that the computation was done correctly.

So why does Ethereum need Starknet to do the computing? Is Ethereum unable to compute things itself?

Not at all.

Ethereum’s problem is not that it “can’t compute.” The problem is that it computes too carefully. Every transaction on Ethereum has to be re-executed and verified by thousands of nodes across the network. That makes Ethereum extremely reliable, but when usage grows, transactions become slow and gas fees become expensive. That is why L2s exist in the first place.

So where does this mathematical proof come from?

Roughly speaking, the process has three steps.

First, the statement “these transactions were computed correctly” is translated into a set of mathematical rules that must be satisfied. Then the entire computation is encoded into polynomials. The prover makes a “commitment” to those polynomials, which is a bit like sealing the answer in an envelope so it cannot be changed later. After that, the verifier randomly checks a number of positions.

Because the answer has already been sealed, the prover cannot change their story on the fly. If there is cheating anywhere in the computation, the mathematical structure is very likely to expose it during these random checks.

That means the verifier does not need to re-run the entire computation. They can still be highly confident that the result is correct.

Strictly speaking, this does not mean fraud is “physically impossible.” It means that under standard cryptographic security assumptions, the probability of successfully faking the proof is so tiny that it can be treated as practically impossible in the real world.

How Does Starknet Make Money

First, there are transaction fees. Starknet helps Ethereum handle pressure, and users pay for that service.

Second, the team and foundation hold a large amount of STRK tokens. If the network grows, the token may increase in value. The project has also been accumulating BTC and ETH, partly based on expectations of long-term appreciation.

Third, StarkWare can license its technology to other applications. StarkEx, for example, has powered projects such as dYdX and Immutable X, generating technology usage fees.

Who Is Behind Starknet

Starknet is developed by StarkWare, a company founded in 2018 and based in Israel.

One of its co-founders, Eli Ben-Sasson, is one of the key co-inventors behind STARK and FRI-related technologies. He was also a founding scientist at Zcash and previously served as a professor at the Technion - Israel Institute of Technology.

StarkWare is widely seen as one of the earliest and most important teams in the ZK field. The company has raised more than $260 million in total funding, and in 2022 it was valued at around $8 billion. Its investors include major names such as Sequoia and Paradigm. Ethereum co-founder Vitalik Buterin also participated as an early investor.

Starknet Is Going After Bitcoin

Yes, in a sense.

Bitcoin is the largest crypto asset in the world by market capitalization, but its native programmability is limited. Ethereum can run DeFi, lending, trading, games, NFTs, and all kinds of complex applications. Bitcoin’s mainnet, by contrast, is more like an extremely secure and conservative settlement layer for value.

It is powerful, but not flexible.

A huge amount of BTC sits in wallets for long periods of time. Its main uses are holding, transferring, and collateral-based financial products. If users want to bring BTC into more complex DeFi scenarios, they usually need wrapped assets, bridges, sidechains, custodians, or other additional trust assumptions.

This is exactly the kind of asset Starknet is looking at: massive, valuable, but difficult to move.

Starknet wants to bring BTC into a high-performance execution environment. If this vision works, users may one day be able to bring BTC onto Starknet and use it for trading, lending, payments, yield strategies, and other applications, while reducing reliance on centralized custodians as much as possible.

Behind this is an even bigger narrative: Starknet wants to become an execution layer connecting Bitcoin and Ethereum. It does not just want to scale Ethereum. It wants to connect the two largest crypto assets, the two largest communities, and two huge pools of liquidity.

But this needs to be said clearly: for now, this is still a strategic direction proposed by StarkWare, not a fully working product.

And there are two major hurdles.

The First Hurdle: Technology and Consensus

To bridge native Bitcoin, Starknet has pointed to OP_CAT.

OP_CAT is a proposed Bitcoin soft fork related to Bitcoin Script capabilities. If activated, it could make it easier for Bitcoin to verify certain complex proofs and bridge logic.

But the reality is that Bitcoin upgrades are extremely slow and conservative. OP_CAT has not been activated. Whether it will ever pass, and when, remains uncertain. At the moment, there is no consensus.

The Second Hurdle: User Culture

Many Bitcoin holders are conservative HODLers. They like Bitcoin precisely because it is simple, stable, and changes very little.

In their eyes, taking BTC into DeFi, lending, or cross-chain applications may not look like “unlocking dormant capital.” It may look like introducing unnecessary risk.

So for Starknet, connecting Bitcoin is not just a technical problem. It is also a cultural one.

Starknet Has a Big Story, But Much Is Still Unwritten

Starknet still has centralized elements today, including its sequencer, upgrade permissions, and security council. Its core security comes from Ethereum data availability and validity proofs, but that does not mean all trust assumptions have disappeared.

Its ecosystem also still needs to grow. Whether an L2 succeeds is not only about technology. It also depends on developers, applications, liquidity, and real users.

Starknet has strong technology, but competition is intense. Arbitrum, Optimism, Base, zkSync, Scroll, and others are all competing for developers and users.

The Bitcoin roadmap is even more uncertain. The idea of connecting Bitcoin is exciting, but it depends on whether the Bitcoin community accepts upgrades such as OP_CAT, and whether BTC holders actually want to bring their assets into more complex application environments.

When looking at Starknet, don’t just ask how high its TPS is today or how cheap its gas fees are.

The more interesting question is this:

If a chain can prove to Ethereum that “I computed this correctly,” could it one day connect Bitcoin, the most conservative and wealthiest vault in crypto, to the same kind of verifiable execution environment?

Who knows?

Starknet is not just building a small side road for Ethereum. It is trying to turn ZK/STARK-based verifiable computation into a road that could eventually run across both Ethereum and Bitcoin.

For now, Starknet is already live on Ethereum. The “connecting Bitcoin and Ethereum” part remains a long-term story: fascinating, worth watching, but not yet realized.