Bitcoin ecology is the focus of the next round of bull market? 5 major logics support its rapid rise

Author: Mu Mu, vernacular blockchain

In the future, Ethereum may surpass Bitcoin in many aspects, including the market value, but this does not conflict with the growth rate of the Bitcoin ecosystem that has not exploded, or its becoming the focus of the next big market. Today we are going to discuss some logics why we believe that the Bitcoin ecology can rise...

01 ** Is Bitcoin old? **

Over the years, **Bitcoin may be most criticized by opponents for the point of "updating and iteratively lagging behind". Many people think that Bitcoin is old and lagging behind the ever-changing innovative projects. **However, the Bitcoin community has always adhered to its original intention and always put security and decentralization first, which is why the value of the encryption field can exist for a long time. ** In the past, the expansive innovation proposed by many new public chains may actually be a kind of "castle in the sky" without fundamental support and unsustainable development in the case of compromising security and decentralization.

**The Bitcoin community believes that only by insisting on these uncompromising can we talk about other iterations and innovations. **As the birthplace of encryption, the Bitcoin community, including Ethereum, has successfully come out of many projects based on the Bitcoin line, insisting on security and decentralization and uncompromising lines, which also confirms this aspect The route is correct.

**In fact, from another perspective, Bitcoin has been very successful, and it can beat everything if it remains stable. **Innovation also comes at a price. It also originated from Bitcoin. Pioneers (new public chains) who are willing to innovate and want to take a new route have played the role of exploring the way ahead. During their continuous trial and error process, most of the innovation In fact, the public chains finally disappeared due to failure, and the few remaining successful innovative public chains have also become the first test network of Bitcoin to some extent. The successful ones left in the end, such as Ethereum, have explored for the encryption community. A route with a higher success rate and a better scalability solution.

In many cases, it is also a kind of wisdom to let others go first.

02 Five Logics of the Rapid Rise of the Bitcoin Ecosystem

1. Indestructible consensus foundation

For the strong consensus of the Bitcoin community, the entire encryption community is obvious to all. Even the concepts of decentralization, uncompromising security and "orthodoxy" insisted on by the Ethereum community are all from the Bitcoin community, so including V A group of OGs, including God, support the Bitcoin route, and help to provide some suggestions and support from time to time. This is the biggest advantage of the Bitcoin ecosystem.

Second, Bitcoin industry participants have an urgent need for ecological development

Among the problems still to be solved in Bitcoin, the main ones are the potential systemic risks caused by the continuous reduction of production and the reduction of block producers’ income, while the development of Bitcoin ecology can bring a large amount of transaction fees, covering the cost of providing safe computing power , This is an urgent need for all holders of the Bitcoin community and tens of billions of mining industry practitioners,** Therefore, the Bitcoin community will spare no effort to promote the development of Lightning Network, BRC20 protocol and some smart contract layers to maintain own long-term interests. **

Third, Bitcoin itself is huge, while the Bitcoin ecology is still in its infancy

At present, the market value of bitcoin is more than 500 billion, and more than 5 billion US dollars of bitcoin cross-chain flow out to Ethereum and other public chain ecology to participate in DeFi. At the same time, due to the development of bitcoin ecology, there is only outflow and almost no inflow.

Under the value-added demand of encrypted assets, the Bitcoin ecology, which is backed by 500 billion market capitalization assets, can achieve huge growth for the Bitcoin ecology even if only a small overflow of Bitcoin’s own demand, not to mention the future. To absorb incoming mapping mainstream asset participation.

Fourth, the diversification of Bitcoin ecological solutions brings more possibilities

1. Lightning Network and its Taro protocol

The off-chain expansion solution comparable to Web2.0 performance is bringing an extremely fast payment experience. At present, some leading platforms support the Lightning Network, and most of the leading platforms are being connected. By then, the Lightning Network, including those that support Lightning Network The threshold for using the wallet will be greatly reduced.

At the same time, the Taro protocol (Taro) launched by the Lightning Network core team is also very worth looking forward to. Taro is a new Taproot-driven protocol, which is used to issue assets on the Bitcoin blockchain. These assets can pass through the Lightning Network. Make instant, high-volume, low-fee transactions. At that time, the Taro protocol based on the Lightning Network will provide an excellent infrastructure for issuing assets on Bitcoin, and the Bitcoin ecosystem will add more high-value use cases, such as payment of stablecoins through the Lightning Network, etc. The confidence of the Ethereum ecology to compete.

2. Stacks: Compliant Bitcoin smart contract layer

a. Better smart contract layer

Bringing a secure and efficient smart contract layer to Bitcoin, designed with scalability in mind.

b. Compliance

The rare U.S. sec registration compliance project brings more convenient and smooth development space under the current background of huge regulatory pressure.

c, Better Stablecoin SBTC

Stacks 2.0 brings a more decentralized Bitcoin stablecoin SBTC, brings native Bitcoin assets into DeFi, and also provides Bitcoin users with a new way of holding.

d. Make up for the disadvantages of BTC, a low-inflation asset, which is unfavorable to ecological development

Although Stacks is attached to the Bitcoin network to provide security, it does not use Bitcoin as gas, because BTC is a scarce asset with a smaller and smaller inflation rate and an upper limit on issuance. It will become more and more expensive in the future, and if it is used as gas, it is very It is not conducive to the ecological development of smart contracts (the handling fee is too high to be willing to spend BTC).

It can also expand BRC-20 to solve the problem of congestion on the Bitcoin main network. BTC is responsible for storing value, while STX is responsible for the simultaneous development of the smart contract layer ecology.

3. The Ordinals protocol stimulates more innovations

Initially, the Ordinals protocol brought a better NFT solution. Precious metal artworks are more expensive than ordinary artworks, adding a layer of value. It is a distribution scheme that is more suitable for becoming a high-value digital artwork NFT; later, there was the smash hit BRC-20 protocol, and the inscription asset blowout; and now there are more innovations, and the brand-new "recursive inscription" is unlocked again It opens up more new possibilities for the Bitcoin ecosystem.

5. The market needs a new narrative

In the past, when the market conditions were good, there was a phenomenon of sector rotation. The main reason was that after market funds flowed into certain concepts, other sectors appeared low-lying. Therefore, under the Fomo mood, funds would overflow and flow to undervalued sectors. In the process of looking for low-lying opportunities, the emergence of some new narratives will obviously highlight more attention. Obviously, the Bitcoin ecology meets this condition.

03 Summary

Recently, the Bitcoin ecology has made a lot of new progress, and we have seen more and more possibilities, which not only solves the dilemma of less and less income for block producers brought about by the reduction of Bitcoin production, but also brings new opportunities for the future development of Bitcoin. To open up a wider space, Bitcoin's own strong consensus and market value also have the possibility of explosive growth in its ecology in a short period of time.

At present, Ethereum is hard-pressing Bitcoin in terms of value storage, while Bitcoin is beginning to outflank Ethereum in terms of decentralized application infrastructure and ecological development. **The Metaverse and Web3 applications of the next-generation Internet have a wave of powerful infrastructure solutions to choose from. In the next 10 years, the field of encryption is bound to be brilliant. **