New Approach to Bitcoin Ecology: From Cornerstone to Bridge Are these activities worth noting in the future?

introduction

4 layers of Bitcoin (main chain, 2nd layer, sidechain, crosschain)

Key fobs play an important role in the Bitcoin value system, especially the decentralization and security of Bitcoin, and the value orientation of representatives of the Bitcoin community. Represented by the Lightning Network, Phase 2 focuses on continuing the Bitcoin payments experience. Some smart contracts are typically implemented on sidechains. Finally, almost all other major public companies use Bitcoin to integrate Bitcoin into their own ecosystems and improve Bitcoin-related Defi operations in their ecosystems (especially ETH).

Electronic money as a crypto-asset

In the whitepaper, Bitcoin is "peer-to-peer electronic money". However, due to current technological advancements and surveillance, it is difficult to use Bitcoin as general currency by replacing it with mass fiat currency. Bitcoin has seen more value than virtual currency. At the same time, giving up the position of bitcoin to replace fiat and accepting the position of crypto assets can bring new horizons and importance to bitcoin.

A new perspective: bridges

Bitcoin now has a dual identity. Indeed, the exchange of Bitcoin for fiat makes Bitcoin an asset and a way to fight against inflation. Meanwhile, in the crypto world, Bitcoin is a strong enough currency. This connection now seems unique. From this, it can be considered that applications that combine and improve bitcoin bridging power will have a larger market in the future.

The "ecology" of Bitcoin

On November 14, at Bitcoin block 709632, Taproot was launched.

“Biggest change in the BTC community in 4 years”, “improving BTC self-sufficiency and efficiency”, many opinions, and even the desire to carry Bitcoin mainnet smart contracts.

Bitcoin has always been a hot topic in the cryptocurrency world. Many existing studies have shown that other major cryptocurrencies are associated with Bitcoin in terms of exchange rates. However, Bitcoin is another unique specialty in the cryptocurrency world. The Bitcoin ecosystem is always hot as other ecosystems (ETH, BSC, SOL, AVAX) develop their own operations.

In its annual Messari report, TBI wrote: “But who can deny the world's most unique electronic device offered by consumers? That information and development prospects are more. More than just numbers. gold. Along with the core M0 and tech company Google. It's completely different. From Ethereum. "

TBI has not said what the future holds for Bitcoin. However, attempts have been made to turn M0 into a technology company.

According to defi Prime stats, there are a total of 23 defi related btc activities. Much less than many other public chains, not to mention Ethereum. With the exception of some wallets in the middle of the main chain, most of these functions are placed on the L2 and a few side chains. Even the reticulation chains have become part of this ecology.

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If you remove the halo from Bitcoin, it looks like the second-class public channel is only looking at the number of trades.

It's not science, but it is Bitcoin. The store is real.

Therefore, unlike the ecological logic of other public chain projects, the Bitcoin value ecosystem must have its own logic. This is also an important question that this article seeks to answer.

The next part of this article will focus on three topics: first, to examine the four-tier model of the Bitcoin ecosystem, which corresponds to the four current roles of Bitcoin: price, payout, contract and connection; , Bitcoin In other words, Bitcoin was traded from a payment method in the early days to a virtual asset today, and finally, Bitcoin can now be seen as the bridge between the real world and the crypto world, and there are two personalities on one side. take restrictions. Along with Bitcoin, on the other hand, it also has the potential for future development of Bitcoin.

4 story house

Bitcoin's four-layer process is like a single concentric cycle layer. The mainchain of sites is responsible for creating the overall value of Bitcoin, and it is the status of the mainchain that gives Bitcoin internationally recognized value. A little outside is the L2 network, represented by the Lightning Network, which plays a key role in contractualizing the operation of Bitcoin, and now has many applications. In the outer circle are several bitcoin sidechains, the most important being to add smart contract applications to the bitcoin ecosystem. The external ecosystem is an interconnected system that interacts with other public chains and allows Bitcoin to access all cryptocurrencies.

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Some of these models are also borrowed from other public channels. For example, ETH has a similar design, and the relay chain of the DOT, parachain, and the design also shade this concept, or AVAX has three equal equivalents at the same time (industry X chain, platform P chain , string C of contract). As with Bitcoin, the middle three design layers are integrated.

BTC main chain: retail

This chain is the origin of the world of cryptocurrencies and is one of the most controversial. In theory you can't give "must" from "yes". It also means that you cannot benefit from technology in this crypto world. Since all of the benefits are unique, communities will continue to be Bitcoin's "must have", and any major controversy that may eventually arise is a challenge.

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(Source: Investopedia, Current market capitalization: CMC, 2022.1.6)

The key is to constantly argue, but the market will decide their life or death. Of all Bitcoin forks, today alone the market value of BTC money for most of these trades (about 40% market share). Of all the additional forks, the only fork in the top 30 by market cap is BCH.

Simply put, the Bitcoin community is never allowed to run every node for every user and has resisted size measurement, despite the cost of scalability and fast exchange rates.

This is the value of BTC. And until the market throws Bitcoin away, it can garner a sense of availability and value from the world.

So Bitcoin is still writing its legend, and Bitcoin's story is still the most important.

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(Bitcoin price map, 2013-2021, Source CMC)

Kev Them Nyiaj: Lightning Network L2 Ecosystem Payment: Lightning, L2 Ecosystem

Buffett and Munger also said at their recent annual meeting that they didn't like Bitcoin's success. However, the downside of Bitcoin on keychains is almost universally known.

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(btc gas price chart, https://ycharts.com/indicators/bitcoin_average_transaction_fee)

High fuel prices can be a small problem, and the inability to change gears as determined by the process (stall speed and stall ability) is life threatening.

Thus, on Layer2, Bitcoin payment services are now transformed into L2, in particular the Lightning network. El Salvador, the only country in the world that accepts Bitcoin as a viable option, uses the Lightning Network, and other developing countries will follow in the future, but will use the Lightning Network if nothing else is added.

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Bitcoinvisuals, 11.17, 3251BTC, 195 millions de dollars

According to statistics from Bitcoinvisuals, the number and usage of nodes on the Lightning Network is increasing. There are a significant number of nodes in the United States with 1 ml node area statistics.

(11.29, geographical distribution of nodes https://1ml.com/location?type=country)

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(Top 5 Lightning Network Countries)

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In the Lightning Network Ecological Map released by Arcane Research in September, the location of the entire network is very clear from Bitcoin's payment transactions. Almost all operations change the way you pursue Bitcoin application scenarios.

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Defi can also be designed as a means of payment. There are a number of positions around Bitcoin Lightning Network-based exchanges to achieve a true DEX, such as Kollider and Portal. There is also RGB which wants to share smart contracts with the Lightning Network.

Kollider: The world's first derivatives exchange using the Bitcoin Lightning Network.

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At Kollider, users can now trade 5 cryptocurrencies for fiat and add leverage up to 100 times. We are also hiring long term contract models. The market volume of the project is not huge at the moment and there are not many people in the community.

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Portal: peer-to-peer exchange using the Bitcoin Lightning network.

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Portal is still in the financial development phase and recently announced its financial plans. Based on their white paper, they are developing a cross-application atomic application. Many well-known schools are already ready to invest and approve.

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The portal community is thriving with 120,000 Twitter followers and 65,000 Telegram friends.

RVB : certificat intelligent

Inspired by the old-fashioned "color piece", RGB decided to provide a smart contract for the Lightning network. Much like the "real strength of Bitcoin" represented by RGB, this is a pretty bright sight. While RGB is in development and currently can't ship directly to the Lightning Network, smart contracts don't happen far from the Lightning Network.

Sidechains : contrat intelligent

There have been tests of smart contracts like RGB in L2, but in the BTC ecosystem, most Dapps can still be used on sidechains. Among the best known are Stacks and Liquid.

grouper

Stack is currently the best of all BTC sidechains with 24 projects covering almost every industry.

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Already network (Blockstream)

Liquid Network is developed by the Canadian company Blockstream.

In response, Security Token Offer (STO) attempted to create a platform to tokenize securities and reduce future cash flow that the strength of Bitcoin will bring, which is still very new at the moment.

The “Bitcoin Bond” proposed by the government of El Salvador will be announced on November 23 by Liquid. This contract is for $ 1,000 which includes a 10 year contract with a 6.5% coupon. Half of the proceeds will be used to buy Bitcoin and hold it for 5 years, while the rest will be used to fund Bitcoin-related developments. By using Bitcoin as a collateral and provider of securities, El Salvador has accomplished Bitcoin's new mission.

Other side chains

Other sidechain operations include RSK, Nomic, and Impervious, but are under development.

cross-chain protocol

Currently, the outer layer of the Bitcoin ecosystem is cross-chain, i.e. multiple BTC envelopes. According to Dune Analytics, there are 317,780 BTC assets wrapped in ETH (compared to 3,424 on the Lightning Network), of which 80% are wBTC.

Current total Bitcoin liquidity: 18.8 million

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(Classification of dunes, 11.29)

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BSC also uses over 100,000 BTC. (BTCB visit on December 15th is 105115.46, CMC) Sol and Avax also have a lot of BTC assets.

In addition, there is a large amount of BTC in the circulation of the exchange medium, which can be considered as a type of BTC exchange. As of November 29, the average daily BTC volume on Binance, currency, ok, FTX and other trading averages was 678,118 in the past 90 days.

Besides the main Bitcoin network, the cross chain now holds the highest value of Bitcoin.

BTC-based assets

If more people than BTC assets are available, ETH's Defi Lego will integrate these assets into the Defi system. Some of the larger companies include BadgerDAO and TranChess.

BadgerDAO

This is a cross-chain BTC project for Defi. The offer now includes commercial operations in partnership with Digg and bolts and Dexes, excluding the btc anchor price.

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Current TVL (11.29): 1.85 billion, some products have recovered well.

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path

A project that improves the benefits of ETH and BTC by strengthening Bitcoin has 3 components. The total closing amount was 1.5 billion and a total of 22,000 BTC was deposited.

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There may be a reason why BTC has failed to grow the ecosystem

technical reasons. Prior to the development of Taproot, the Bitcoin mainnet had minimal capacity to load smart contracts and did not support multiple signatures, which really limited the space to develop complex applications.

community values. Bitcoin relies on a variety of decentralization methods. Decentralization was achieved in a new era of Bitcoin, but the decentralization of Bitcoin after the birth of Ethereum prevented Bitcoin from entering the era of smart contracts. Conflict in many communities ended in the majority religion, although it led to hardship. So maybe bitcoin is not necessary and cannot enter the era of smart contracts. As the blockchain loses decentralization, there is no better way for multi-user content.

no renewal. This is similar to other aspects of Bitcoin decentralization. Sol, Avax, Matic and other public channel bases offer great rewards to developers who create their work, no matter what. Even ETH has started to cancel the project block. For the decentralization of the blockchain, it is a kind of "fault", but for the developers it is really supportive and protective.

Original content:

Although BTC is the first blockchain, there are not many jobs around it. The so-called “open chain ecology” has not yet been developed. And the current direction really revolves around expanding the payout strategy. A side chain capable of smart contracts is not comparable to the main chain in terms of security. And even if Taproot is upgraded, it will maintain some distance from other public channels.

Decentralized design ideas. Due to the similar idea that users run their own nodes, Bitcoin is easier on hard forks than other public channels. Voting with the feet can protect giant whales from harm, but it also causes the manufacturer to invisibly raise prices.

Therefore, unlike other public channels, Bitcoin should not be defined as a public channel in general.

Its value is not even in "ecology".

from money to assets

Since the answer does not lie in ecology, we must go further and identify why public channels without ecology can be very useful in the interpretation and identity of Bitcoin. . Although it is Bitcoin.

"Failed" eh

Historically established, Bitcoin was a peer-to-peer electronic currency. Now, in many other studies, Bitcoin (especially L2) is a payment tool compared to banks, Visa, MasterCard and Paypal.

However, due to the uncertainty of the Bitcoin price, Bitcoin can only perform these two tasks (electronic devices and payment devices) in limited situations. Tesla received short BTC payouts this year, but it was quickly phased out. Bitcoin includes Twitter and AMC, although there are many platforms that accept payment, but not as big as advertising.

What pleased BTC fans is that on September 7 of this year, Bitcoin became the currency of El Salvador. However, it is easy to take into account that the US dollar is still a fiat currency and is still widely used.

According to the Salvadoran president's Twitter on September 20, about a third of Salvador's 6.4 million people use the Chibo Bitcoin wallet.

On September 30, Reuters published a report on the use of Bitcoin in El Salvador: https://www.Reuters.com/article/el-salvador-bitcoin-poor-idUKL8N2QP4M4. I noticed a lot of people signed up for a $ 30 cash prize. At the same time, 90% of the 1,281 respondents do not understand or like to use Bitcoin. Even though a lot of people don't have a smartphone, they still get paid.

Bitcoin and bank (non-bank or non-bank)

Bitcoin's ability to improve its financial performance can be overestimated. Specifically, there are many reasons for the lack of financial support that Bitcoin would only benefit from some of them. There are also other ways to compete with other community assets like Ethereum or fixed income securities.

successful dollar

Most Bitcoin in the world is priced in dollars, so it is no exaggeration that Bitcoin is a dollar asset. U-based payments widely used in the crypto space are also similar to current fuels. Bitcoin has therefore expanded its data into dollars. Besides Bitcoin's natural halving effect, from a number of bull markets' perspective, the release of the US dollar is a major driver of the rally.

(Source: "The impact of macro-monetary policy on Bitcoin")

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At the same time, another significant global trade issue with the United States is the ability to control Bitcoin beyond the currency crisis. At the same time, they will create their own digital currencies to reduce the impact of BTC and multiple denominations of the stable USD. However, Bitcoin is one of the most profitable assets of the last decade, after gold and oil.

encryption tool

Compared to real payments, Bitcoin is a strong currency in the crypto world. Of all the assets in the chain, Bitcoin is the only one. The letter ("Only Hope") also stated that "creating" public chains such as ETH and SOL is profitable in global cryptocurrency because Bitcoin is profitable. Bitcoin provides a foundation of value and a foundation of trust for the entire crypto world. Its network security is adequate for the entire encrypted world.

Depending on whether the “efficient” public chain will sometimes exceed the market value of BTC in the future. Web 2.0 companies, such as Google, Amazon and Microsoft, could overtake GE. But in the "Internet summer" of 2000, GE was also a great tool.

The second ends as follows.

Bitcoin itself has gone from a payment to a denomination in dollars. And this has a positive impact on both the end of the real world and the virtual world. It also gives some thought to the future path of Bitcoin.

Bitbridge: The Real Asset for Bitcoin and Bitcoin for the Crypto World

Although it faces the challenges of stability coins and CBDCs, Bitcoin still has a very strong financial legacy. There are many reasons why hedging, hedging, asset allocation, inflation hedging, and financials have always accepted Bitcoin on their balance sheet.

On the flip side, Bitcoin is still the toughest currency in the cryptocurrency world. Although in the future Metaverse, Bitcoin could be the same group of people everyone sees on the Metaverse.

TBI said there are three reasons for Bitcoin's demand.

Bitcoin could be of interest to other assets in the chain.

Cross-chain bridges open up many P2P business applications.

Bitcoin-based digital currency adoption a concern for some stocks

Therefore, projects that link Bitcoin are worth considering in the future.