Definition
RGB is a smart-contract and asset-issuance system for Bitcoin and the Lightning Network developed under the LNP/BP Standards Association. Rather than executing contract logic on-chain like Ethereum, RGB uses client-side validation: contract state and history live off-chain, and Bitcoin's blockchain is used only as a commitment and ownership anchor. RGB is still maturing, and tooling and wallet support remain limited, so it should be treated as emerging technology.
Client-side validation and single-use seals
In RGB, a Bitcoin transaction commits to data whose validity is checked separately from Bitcoin's own consensus rules. Each RGB asset is allocated to a specific Bitcoin UTXO that acts as a single-use seal. To transfer the asset, the owner spends that UTXO, and the off-chain transfer data assigns the asset to a new owner's UTXO. Only the parties to a transfer hold and verify the relevant state; the rest of the network never sees it.
Privacy, scaling, and trade-offs
Because contract data stays off-chain, RGB offers strong privacy and censorship resistance: validators and miners cannot read or selectively block RGB transfers, and there is no on-chain bloat from contract data. The cost is that users must store and transmit their own validation data, and losing that history can mean losing the ability to prove ownership. RGB is also designed to operate over Lightning for fast transfers.
RGB is one of two prominent Bitcoin-native asset layers. For the Lightning-Labs alternative built on Taproot, see Taproot Assets.
In Simple Terms
RGB is a smart-contract and asset-issuance system for Bitcoin and the Lightning Network developed under the LNP/BP Standards Association. Rather than executing contract logic on-chain…