New Paystand Infrastructure: ETH to BTC

Why Pin at All? Trustless Anchors in a Permissioned World

We run an internal permissioned blockchain, built on a forked Ethereum codebase. It powers our Assurety system — a real-time audit layer that tracks, notarizes, and validates payment events flowing through our network.

While our blockchain is permissioned for operational and performance reasons, we’ve never wanted our users to rely solely on our word. That’s why, from the beginning, we tethered it to the Ethereum mainnet using anonymous state pinning — embedding cryptographic commitments (hashes of our internal chain’s state root or Merkle root) into public Ethereum transactions.

This created a form of external accountability. If someone ever questioned whether we had tampered with our internal ledger, we could point to immutable, timestamped pins anchored in Ethereum to prove otherwise. Think of it like writing a single sentence each day in a newspaper — a small, verifiable signal that no rewrite can erase.

But the mechanism had issues.

The Ethereum Approach: Overkill with a Price Tag

Ethereum gave us flexibility — a full-fledged virtual machine, a composable smart contract system, and an active ecosystem of tooling and infrastructure. Early on, we leaned into that flexibility. We built a fairly involved smart contract layer to manage our state pinning process. It worked. But it came at a cost.

Over-Engineering: Our contracts weren’t just posting hashes. They included metadata, structured verification logic, and role-based access. We had good reasons at the time, but in hindsight, we brought a rocket launcher to a campfire.

Gas Costs: It wasn’t the act of pinning per se that cost us — it was the weight of the smart contract execution. Complex calls, storage writes, and calldata encoding all contributed to gas spikes, especially during periods of network congestion. The variability made predictable cost modeling difficult.

Operational Overhead: Maintaining smart contracts on Ethereum is like maintaining production infrastructure in space. Every change is expensive, public, and hard to reverse. Audits are mandatory. Even routine updates require migrations and backward compatibility concerns.

On-Chain Complexity: Publishing smart contracts meant making our logic permanent and publicly accessible. Even though the logic was straightforward, every new function added long-term responsibility. More on-chain logic meant more moving parts to audit, maintain, and support over time — a high commitment for infrastructure that should’ve been simpler.

Eventually, we stepped back and asked: what’s the real job to be done here? Do we need on-chain validation logic, or just an immutable, timestamped cryptographic anchor?

That question pointed us somewhere simpler, leaner, and closer to our roots.

Reframing the Need: What We Actually Want from Pinning

What we really care about is this:

Immutability: Once pinned, it must be practically impossible to remove or falsify the commitment.
Liveness: Pins must be publicly verifiable and reliably posted at regular intervals.
Decentralization: The ledger holding the pins should be broadly distributed and resistant to capture.
Alignment: Ideally, the chain we pin to reflects our philosophical and operational direction.

And this last one was the clincher. We’re a Bitcoin-aligned company. We already contribute to the Bitcoin network via mining. We believe in the monetary properties of Bitcoin, and many of our future products are designed to orbit around it. So why not pin to the chain we already live on?

Switching to Bitcoin: Simpler, Leaner, Stronger

Pinning to Bitcoin means doing less — and that’s a feature.

Unlike Ethereum, Bitcoin has no generalized smart contract layer. But what it does have is an unshakable ledger of transactions and the longest-running proof-of-work network in history. To pin state data to Bitcoin, we simply commit a hash in an OP_RETURN output in a standard Bitcoin transaction.

Here’s what we implemented to make the switch:

State Root Hashing

At regular intervals, we generate a Merkle root of our internal blockchain’s state. This root summarizes the integrity of our payment data, including block headers and transaction payloads. Each root acts as a cryptographic fingerprint for the state of the network at that moment in time.

Minimalist Bitcoin Transaction Composer

We created a lightweight Bitcoin transaction builder that:

- Selects UTXOs from a hot wallet we control

- Builds a transaction with a small fee

- Embeds the Merkle root in an OP_RETURN field

-Broadcasts via our node or a relay partner

Broadcast and Monitor

Once the transaction is broadcast:

- We wait for 6+ confirmations (depending on SLA)

- Store the transaction ID, timestamp, and Merkle root in our Assurety log

- Provide users a way to independently verify that the pinned hash exists on Bitcoin

Verification via Dashboard

We expose verification capabilities directly in our Paystand Dashboard:

- Users can view historical Merkle roots alongside their corresponding Bitcoin transaction IDs

- Each root is linked to a specific snapshot of our internal chain

- Users can explore the data trail to validate that a given state was pinned and remains immutable

Benefits of Moving to Bitcoin

This new system is leaner, more aligned, and arguably more resilient:

Lower costs: Bitcoin transaction fees are simpler to reason about and often lower for small data.
Simpler logic: Less surface area, fewer moving parts, easier monitoring.
Aligned incentives: We’re anchoring to the monetary layer we believe in and actively support.
Broader base layer: Bitcoin’s network effect is larger than Ethereum’s in terms of decentralization and hash power.

Closing Thoughts: Pinning with Purpose

We didn’t make this change just to check a box. For us, pinning is about proving that our internal systems can be trusted — not because we say so, but because the strongest ledger in the world agrees.

It’s also about coherence. We’re not just building payment rails with blockchain lipstick. We’re shifting value — and accountability — to open, verifiable networks. Bitcoin is where we’re staking our claim.

This move may seem small, a single transaction every few hours. But each one is a fingerprint, etched into a ledger that has never been rewritten, and never will be.