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Bitcoin seems to be severely underestimated.
With the release of the Ordinals protocol and BitVM whitepaper in 2023, the concept of possibilities for the Bitcoin base layer is undergoing a transformation, clearly absorbing the needs of other blockchains in the wider cryptocurrency ecosystem.
Certainly, since the inception of the protocol 15 years ago, developers have been eager to add more functionality to Bitcoin. From early sidechains like Liquid and Rootstock to future L2 solutions.
However, a new wave of imitators is attempting to capitalize on these developments to promote arbitrary crypto tokens. In the Bitcoin L2 gold rush, the Bitcoin Magazine editorial board feels it's necessary to clarify its stance on L2 reporting. Bitcoin L2 must:
- Use Bitcoin as its native asset: L2 fundamentally designed must use Bitcoin as its primary token or unit of account, as well as the mechanism for paying fees within the system. If it has tokens, they must be backed by Bitcoin.
- Use Bitcoin as a settlement mechanism to execute transactions: L2 users must be able to exit the system through a mechanism (trusted or trustless) that returns control of their funds back to L1.
- Demonstrate dependence on Bitcoin's functionality: To judge if a system is a Bitcoin Layer 2, we can look at whether it exhibits functional dependence on Bitcoin. Specifically, if Bitcoin were to experience a complete collapse and the system can still operate, then we consider the system not to be a Bitcoin Layer 2.
Protocols not belonging to the Layer 2 category built on top of Bitcoin include:
- Meta-protocols: Systems like Counterparty (XCP) or Ordinals, which exist and operate on the Bitcoin Layer 1 but outside the scope of the Bitcoin protocol, without having their independent blockchain.
- "Parasitic" layers: These systems rely on Bitcoin's existence and cannot function independently without Bitcoin but do not meet the other criteria required to be considered a Layer 2. |
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Post time 8-3-2024 07:38:50