This content originally appeared on HackerNoon and was authored by Andre S.
Building on Bitcoin is no longer contrarian. For years, Bitcoin startups were overlooked by VCs, as developers fled to other ecosystems that offered greater functionality and performance. I’ve been writing about Bitcoin for over a year now, and let me tell you: this is no longer the case.
\ The nature of crypto networks is changing. Over time, we’re seeing more and more formalized theories of the value, security, and purpose of blockchain networks. We often hear about more abstract concepts like modular networks, data availability, and so on — this is a huge evolution from the “moar TPS!” discourse of the 2017-2018 cycle. We’re also seeing our first bits of recognition from a regulatory perspective, with Bitcoin getting its spot ETFs after so many years of trying and failing.
\ On the other hand, we are also seeing some exhaustion from just how many “new things” there are in crypto, how many tokens, how many projects, and how many memecoins. Everyone is trying to build their own version of a blockchain network, their own consensus mechanism, their own bridging protocol – which is leading to liquidity fragmentation and option fatigue. The time is right to start seeing some consolidation in the market and all roads lead back to Bitcoin.
Where does Bitcoin fit in the modern crypto world?
Bitcoin is the flag of technology - the Schelling point for the entire crypto industry. It is the largest, most trusted, most liquid, and most secure cryptocurrency that exists today.
\ Yet, there’s an untapped market of $1.3T in BTC value that is looking for ways to deploy the capital somewhere. Of course, there are a huge number of caveats here, but the final figure will still dwarf anything seen before. And we’ve seen a glimmer of that activity with Ordinals, which was still an extremely niche use case that took off to become larger than the Ethereum NFT market.
\ Of course, we shouldn’t overlook the challenges of building on the Bitcoin base layer. Everything critics say about it is true: it’s slow, has high fees, and it’s not great for smart contracts. But there are some very talented developers who are absolutely pushing the limit for what you can do with it, turning Bitcoin into a global registry for tokens and data storage.
\ The good news is that Bitcoin L2s are here and collectively will onboard millions of new users to Bitcoin through better user experiences, developer tooling, and fast transactions.
Bitcoin L2s were always the solution
In the case for a small allocation to Bitcoin, Wences Casares argued in 2019 that “Many interesting technologies and applications that are being tested with other cryptocurrencies and other Blockchains and, if they are successful, they may be implemented on top of the Bitcoin Blockchain”
\ Five years later, this prescient prediction has stood the test of time. Projects like Bitcoin Layers are now tracking dozens of Bitcoin L2s that are expanding the functionality and use cases of Bitcoin.
\ Since the earliest days of Bitcoin, many recognized that Bitcoin would never scale by developing the base layer: you’d need Layer 2 solutions for that. And once the “block size war” was done with, this approach was locked in.
\ Now, we have the benefit of observing how other ecosystems have approached scaling and we can apply many of these lessons and breakthroughs to Bitcoin.
\ Solutions like Stacks, Lightning, Rootstock and many others have been there for a while, and promised fast, modern blockchains that could host new use cases for BTC. They all sit on different parts of the decentralization and security spectrum, but they’re all there to support Bitcoin.
\ Since last year, we’ve seen a flurry of other teams moving to Bitcoin and starting to develop their own infrastructure solutions. But what we need above all is dApp builders deploying their big ideas on Bitcoin — and they’re doing so right now.
Why the Bitcoin ecosystem will lead the bull run
As we enter this new chapter for Bitcoin, the landscape is quickly shifting. Bitcoin L2s are no longer an experiment; they are the foundation upon which the next wave of innovation will be built.
\ The maturation of these technologies is not just about scaling but about unlocking the full potential of Bitcoin as a secure, decentralized, and versatile platform.
\ The question is no longer if Bitcoin will lead the next bull run, but when. As the market consolidates and the noise fades, what remains clear is that Bitcoin’s foundation, bolstered by these emerging solutions, is stronger than ever.\
It’s finally time we see innovation return to Bitcoin, and it’s only just getting started.
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This content originally appeared on HackerNoon and was authored by Andre S.
Andre S. | Sciencx (2024-08-30T08:22:53+00:00) Bitcoin L2s Are Eating the World. Retrieved from https://www.scien.cx/2024/08/30/bitcoin-l2s-are-eating-the-world/
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