The Arrival of a New Era of Bitcoin and the Ecosystem Leap after the Frenzy of In_script_ions

[TL；DR]:

2024 can be considered a year of comprehensive construction and prosperity for the Bitcoin eco, with numerous new elements integrated into the Bitcoin network, such as innovations such as BRC-137, promoting the prosperity of the eco.

Various asset issuance protocols such as Atomicals, Runes, BTC Stamps, etc., have given rise to new token standards such as ARC-20, SRC-20, and ORC-20, as well as standards such as BRC-137 and BRC-420, showcasing the diversity and innovation of the Bitcoin eco.

The Bitcoin eco faces relatively low scalability and soaring transaction costs. However, through innovative technologies and the development of products or applications that conform to native scenarios, the Bitcoin eco still has enormous potential and development space.

Introduction

If 2023 is the beginning year for Bitcoin to revitalize its eco due to the popularity of inions, then with the landing of spot ETFs and the arrival of the fourth halving, 2024 will undoubtedly become a prosperous year for the comprehensive construction of the Bitcoin eco.

The Bitcoin network, which was once considered stagnant in the previous bull market, has now been revitalized with many exciting new elements.

However, besides the inions, what other explosive items may appear this year? What are the innovative propositions they represent? How can we look forward to potential project opportunities from a broader perspective? Let’s uncover these mysteries together and explore the future development of the Bitcoin field.

Bitcoin Eco Game: Digital Gold or Smart Contracts?

As is well known, since the birth of Bitcoin, its positioning has been as a peer-to-peer electronic cash , always in the narrative of “digital gold.” But over time, many users and developers hope to further expand the application scenarios and eco construction of Bitcoin.

In 2013, Vitalik Buterin proposed the concept of Ethereum as a blockchain and co-founded Ethereum with Gavin Wood and Joseph Lubin, among others.

The core of Ethereum lies in its programmability, providing developers with a platform to build various applications, giving rise to numerous asset types such as Layer2 applications, ERC20, and ERC721, as well as various follow-up projects. The Ethereum eco has flourished without exception.

Although Bitcoin is inferior to Ethereum in TPS, block time, Turing completeness, and other aspects, its original intention as crypto trading did not prevent developers from introducing smart contracts and application development on it, thus opening up a long-term game between fundamentalists in the Bitcoin community and developers trying to innovate.

Compared to the desolation of the bull market from 2020 to 2021, Bitcoin has ushered in innovations represented by the Ordinals protocol and BRC-20 inions in this round of the bull market. The power to crack conservative and radical factions is the active community. Ultimately, the main driving force is people’s pursuit of value consensus. Without changing Bitcoin’s underlying code and security logic, Everyone can leverage its security consensus to achieve a certain degree of asset innovation, which will further consolidate the consensus of Bitcoin as a valuable digital asset and exchange medium.

Source: Ryze Labs

Many eco projects relying on the Bitcoin network have injected new vitality into previously idle Bitcoin assets. These protocols not only provide Bitcoin with more asset standards and new scenarios for protocol issuance but also transform it from a mere static asset to an important contributor to network security.

This transformation will attract more users to join the new narrative eco, further enhancing the security of the Bitcoin network and attracting more applications and services to settle in, forming a virtuous cycle.

Those Noteworthy Eco New Paradigms

With the wave of inions brought about by the Ordinals protocol and BRC-20 token standard, asset issuance protocols for various types of Bitcoin have also quickly attracted market attention.

Diversified asset issuance protocols such as Atomicals, Runes, BTC Stamps, Taproot Assets, etc., have emerged, giving rise to many new token standards such as ARC-20, SRC-20, ORC-20, etc.

In addition to the mainstream asset issuance protocols mentioned above, there are also many asset protocols with rich application scenarios under consideration.

For example, BRC-137 is based on the Ordinals protocol, allowing anyone to create composable DIDs on the Bitcoin blockchain in a completely permissionless and decentralized manner, supporting user authentication and recognition of various applications on the chain.

Source: brc137.io

The BRC-420 standard is similar to ERC-1155, which can combine multiple inions into complex assets, providing a wide range of application scenarios for gaming and metaverse fields (such as the ERC-1155 protocol for NFT and FT combined gaming scenarios).

Some memecoin communities have also begun to launch new asset protocols on BTC, such as the DRC-20 launched by the Dogecoin community, demonstrating a diverse innovation trend.

In addition to the various L2 ecos we previously mentioned in our blog post, as well as the asset innovation narrative mentioned earlier, the development of projects that use Bitcoin as an underlying security asset has become a new highlight of this year.

LST Mode: Stake Bitcoin to Provide Security Protection

The story of Bitcoin staking interest is not new, but the Babylon project has extended BTC staking to a new dimension. The project aims to use Bitcoin as an unlicensed staked asset to ensure the security of the Cosmos public chain by implementing the Slashing mechanism.

This innovative strategy not only transforms Bitcoin into an underlying interest-bearing asset but also provides a solid security barrier for the public chain through the Bitcoin network.

DeFi Mining Mode: Staking Bitcoin to Obtain Tokens

Many emerging BTC Layer2 projects, such as Merlin Chain and BSquare are exploring start-up strategies for staking Bitcoin for mining.

Taking Merlin Chain as an example, this project is a Bitcoin L2 network that integrates key modules such as ZK-Rollup network, decentralized oracle network, and Bitcoin on-chain fraud-proof. The aim is to empower the native assets, protocols, and application eco on BTC Layer 1 through Layer 2. Currently, TVL has exceeded $2 billion.

The Post Bitcoin Era has Arrived, and Communities are Driving Value Discovery

It is not difficult to see from the previous text that the development of the Bitcoin eco has brought new opportunities to the entire crypto field.

Meanwhile, we see that Bitcoin and related eco tokens (such as STX, RGB, etc.) are also experiencing rapid value growth. However, currently, the eco development of Bitcoin still faces many challenges.

Source: Coinmarketcap

The scalability of the Bitcoin network is relatively low. If we emulate Ethereum to explore fields such as DeFi, NFT, GameFi, DAO, etc., the Bitcoin eco will naturally fall behind. Because the Bitcoin network does not support complex smart contract interactions, it requires a secure and reliable scaling solution acceptable to the community to carry larger scale applications.

The most typical example is that BRC-20 transactions have led to a sharp growth in Bitcoin blockspace, which may cause congestion in the memory pool, leading to a surge in transaction costs and an extension of transaction confirmation time.

The upcoming halving of Bitcoin is expected to occur in late April 2024, when miners’ block rewards will be halved, further intensifying the debate over Ordinal technology and its related elements.

In addition to the need for innovative technology to drive change, we should expect more popular products or applications in the Bitcoin eco that align with native scenarios. For example, how to maintain decentralized indexing and other infrastructure in L2 construction is still a blank space to gather more users and developers and form a positive development cycle, which is also the focus of this article.

From the perspective of paradigm innovation, the Bitcoin network has its own strong security consensus and shortcomings in smart contract interaction. Therefore, building a Bitcoin eco should be different from following the footsteps of Ethereum. Developers should explore and develop native application scenarios based on their unique asset attributes.

From the perspective of the development stage, the Bitcoin eco is currently hindered and has a long way to go, and there is still huge potential space to be explored. In the current context of relatively abundant funds and strong user demand, there are still many scalable areas and innovative solutions for developing the Bitcoin eco.

In short, with the help of cutting-edge Bitcoin token standards such as digital collectibles, meta protocols, and BRC-20, as well as the spirit of open source, fairness, and shared cryptocurrency, a vibrant Bitcoin eco is constantly growing, and we will continue to focus on its grand vision and small innovations.