The BTC application layer ecosystem is exploding. Which technologies deserve the most attention?
introduction
It has been 15 years since the Bitcoin genesis block was launched in 2009. During this period, the field of digital currency technology has undergone earth-shaking changes. The birth of Ethereum, Solana, and Polygon introduced blockchain technology that supports smart contracts, allowing blockchain to not only serve as a value storage and transaction scenario, but also expand to more applications such as DeFi, NFT, Gamefi, Socialfi, DePIN, etc. The various scenarios attract a steady stream of users and builders to join.
As for the technical development of Bitcoin, more attention still remains at the "digital gold" stage. At the end of 2023, the popularity of BRC-20 inscriptions brought the public's attention back to Bitcoin, and they began to think about whether the Bitcoin ecosystem can continue to give birth to different application scenarios.
1：Why is it said that BTC applications are about to explode?
1）The development history of Bitcoin
As the earliest cryptocurrency, Bitcoin has experienced ups and downs, but it still maintains strong vitality and influence, attracting the attention of countless investors and developers. However, due to block size limitations and non-Turing complete development languages, Bitcoin largely remains in the role of value storage and transactions, and does not have the ability to host more projects. Let us review the development history of Bitcoin: ·After the birth of Bitcoin, colored coins appeared in 2012, which allow certain Bitcoins to represent other assets by adding metadata to the Bitcoin blockchain;. In 2017, hard forks occurred due to the dispute over large and small blocks, including BCH, BSV, etc.; After the fork, BTC also began to continue to explore scalability improvement solutions. In 2017, the SegWit upgrade was launched to introduce extended blocks and blocks weight, expanding the block capacity; the Taproot upgrade starting in 2021 improves the privacy and efficiency of transactions. These key upgrades also laid the foundation for the subsequent development of various expansion protocols and asset issuance protocols, as well as the Ordinals protocol and BRC-20Token that were later well-known in the circle.
2）Ethereum: Born because of smart contracts, died due to high degree of centralization
On the other side, Vitalik Buterin, a young genius from Russia, proposed a brand-new concept in 2013: providing a programmable blockchain that allows developers to build various applications on it, not just limited to currency transactions. . Then he and his partners founded Ethereum. This feature of programmability makes Ethereum a smart contract platform that allows people to create and run blockchain-based applications that can execute automated contracts without trusting third parties.
It can be seen that one of the most significant features of Ethereum is smart contracts, and developers can develop various applications on Ethereum. With this feature, Ethereum has gradually become the leader of the entire Crypto, with various Layer 2 applications, various asset types such as ERC20 and ERC721 appearing, and many developers gathered to build and enrich the Ethereum ecosystem.
However, the Ethereum ecosystem suffers from a high degree of centralization. In this ecosystem, Vitalik Buterin and the Ethereum Foundation hold the decision-making power over the progress of the project. Most projects are led by issuers, and user benefits largely depend on the wishes of the project owners and the venture capital behind them. For users who are full of expectations, they often become "leeks" for project parties and capital, and are constantly being harvested, and eventually become the fuel behind this glorious ecology.
3）BTC application energy is fully charged and ready to explode at any time
Therefore, even though Ethereum has been able to realize the development of smart contracts and various Dapps, Builder began to shift its focus to the BTC ecosystem and began to conceive of ecological construction. The main reasons are mainly divided into the following three points: ·Market consensus: Bitcoin is the earliest blockchain and cryptocurrency and has the highest popularity and trust in the hearts of the public and investors. Therefore, it has a unique advantage in acceptance and recognition. The current market value of Bitcoin has reached 1 trillion US dollars, accounting for about half of the entire crypto market value.
Bitcoin has a high degree of decentralization: Among mainstream blockchains, Bitcoin has the highest degree of decentralization. The founder Satoshi Nakamoto has disappeared, and the entire chain is driven by the community; retail investors’ demand for Fair Launch: Web3 The demand is inseparable from the issuance method of new assets. In traditional project token issuance, the issuance of assets depends on the project party, and the price of assets depends on the market making of the team; in the Bitcoin ecosystem, innovative Fair Launch venues such as Inscriptions have emerged, giving retail investors more The right to speak and respect, and thus gathered more wealth. With the sudden popularity of Inscription in December 2023, the Bitcoin application layer has also taken advantage of the trend and become the next direction of expansion, ready to explode at any time.
2.Why is Lightning Network the swift 2.0 of Web3 in the future?
1）Scaling is still the focus of Bitcoin developers
Ideal narrativism is beautiful, but the ecological development of Bitcoin depends on the underlying technical core. Historically, various efforts looking to enhance Bitcoin L1 performance have shared the same goal: facilitating off-chain transactions to increase the scalability of the network. The fundamental reason is still because of the dilemma of Bitcoin’s scalability and transaction confirmation time.
Under the design of the transaction verification mechanism, consensus mechanism, and P2P communication mechanism, as well as the technical upper limit reached after the code is implemented, BTC generates blocks every 10 minutes, which is 1/600BPS (Blocks/Sec). The maximum processing speed is: 7TPS (Transactions/Sec), which is a technical upper limit reached after the entire transaction verification mechanism, consensus mechanism, and P2P communication mechanism, as well as the code are implemented. In comparison, Ethereum is currently 1/20BPS and 20TPS, while Solana transaction processing speed has reached 65,000TPS. For the long-term development of the Bitcoin ecosystem, Bitcoin expansion has become an area that needs to be faced directly and attracts much attention.
2）The best expansion solution in transaction scenarios: Lightning Network
In terms of improving the scalability of Bitcoin, there are currently two main development routes. One is on-chain expansion, which is optimized on Bitcoin Layer 1; the other is off-chain expansion, which is commonly understood as Layer 2. In terms of on-chain expansion, on-chain expansion wants to improve TPS through block size and data structure. However, due to the structural limitations of the Bitcoin chain itself, coupled with the decentralized nature of Bitcoin’s community consensus, on-chain expansion plans often fail. Questioned by the community. In terms of off-chain expansion, according to data availability and consensus mechanism, it can be roughly divided into: state channel, side chain, rollup, etc. The core difference between Rollup and side chain is the inheritance of security. The consensus of Rollup is formed on the main network and cannot run once the main network fails. The consensus of side chain is independent, so once the consensus of side chain fails, it cannot run. run. The status channel allows users to build communication channels off-chain, conduct high-frequency transactions off-chain, and then record the final results on-chain, becoming the best expansion solution for Bitcoin in transaction scenarios.
When it comes to Layer 2 such as state channels, the most important thing to mention is the Lightning Network. The earliest state channel project in the blockchain is the Lightning Network on Bitcoin. The concept of Lightning Network was first proposed in 2015, and then Lightning Labs implemented Lightning Network in 2018.
As a Layer 2 payment protocol based on the Bitcoin blockchain, the Lightning Network aims to achieve fast transactions between participating nodes and is considered an effective solution to the Bitcoin scalability problem. The core of the Lightning Network is that a large number of transactions occur off-chain. Only when all transactions are completed and the final status is confirmed, will they be recorded on the chain.
·First, the transaction party uses the Lightning Network to open a payment channel and transfer funds to Bitcoin as a commitment deposit according to the smart contract. Parties can then conduct any number of transactions via the Lightning Network off-chain to update the temporary allocation of channel funds, a process that does not need to be recorded on-chain. When parties complete a transaction, they close the payment channel and the smart contract distributes the committed funds based on the transaction record.
·The next step is to close the Lightning Network. A node first broadcasts the current transaction record status to the Bitcoin network, including settlement proposals and allocation of committed funds. If both parties confirm the proposal, the funds are immediately disbursed on-chain and the transaction is completed.
.Another situation is a shutdown exception, such as a node exiting the network or the transaction status broadcast being incorrect. In this case, settlement is delayed until the dispute period, and nodes may dispute settlement and fund distribution. At this time, if the questioning node broadcasts an updated timestamp, including some transactions missed in the first proposal, then the subsequent correct results will be recorded, and the commitment of the first evil node will be confiscated. , reward the other party’s node.
It can be seen from the core logic of the Lightning Network that it has the following four advantages:
·Real-time payment: There is no need to create a transaction for each payment on the blockchain, and the payment speed can reach milliseconds to seconds.
·High scalability: TPS is as high as 40,000,000, which means that the entire network can handle tens of millions of transactions per second, the payment capability far exceeds the traditional payment system, and operations and payments can be carried out without relying on intermediaries.
· Low cost: By conducting transactions and settlements outside the blockchain, Lightning Network fees are extremely low, making emerging applications such as instant micropayments possible.
.Cross-chain capability: Atomic swaps outside the chain through heterogeneous blockchain consensus rules. As long as the blockchains support the same cryptographic hash function, cross-blockchain transactions can be made without trusting a third-party custodian.
Although the Lightning Network also faces some difficulties, such as users need to learn and understand the use, opening and closing of the Lightning Network, in general, the Lightning Network establishes Layer 2 transactions on Bitcoin. In November 2023, according to an article by The Block Pro, there have been various attempts to achieve Bitcoin expansion so far. Lightning Network is Bitcoin’s largest expansion solution. Its TVL will reach nearly US$200 million in 2023, ranking first among Bitcoin’s expansion solutions.
3）What other expansion protocols are there?
In addition to the state channel, side chain and rollup mentioned above, there are also some off-chain expansion solutions that use client verification, the most representative of which is the RGB protocol.
RGB is a private and scalable client-verified smart contract system developed by the LNP/BP Standards Association on Bitcoin and compatible Lightning Network. The scalability and transparency issues of the Bitcoin main chain are solved by using smart contracts, in which an agreement is reached in advance between two users, and once the conditions of the agreement are met, the agreement is automatically completed. And because RGB is integrated with Lightning, there is no need for KYC, thus maintaining anonymity and privacy since there is actually no need to interact with the Bitcoin main chain at all.
RGB has two core features: ·Client verification mode: RGB operates in client verification mode and implements smart contracts. In RGB, data is stored outside the chain, and smart contracts are only responsible for verifying the validity of the data and executing related logic. Bitcoin transactions or Lightning channels only serve as an anchor point for validating data, while the actual data and logic are verified by the client. This design allows RGB to build smart contract systems on top of Bitcoin or the Lightning Network protocol without modifying it.
·One-time seal: RGB tokens need to be associated with a specific UTXO. When spending UTXO, the Bitcoin transaction will contain a message commitment, indicating that the message includes the input of RGB, the destination UTXO, the ID and amount of the asset, etc. . Although the transfer of RGB Token must require a Bitcoin transaction, the UTXO output by RGB transfer and the UTXO output by Bitcoin do not need to be the same, which means that the Token on RGB can be output to another party that has nothing to do with this UTXO transaction. A UTXO without leaving a trace on Bitcoin, once you send the asset via RGB you cannot see where it went, and even if you receive the asset its history is difficult to decipher, thus providing users for greater privacy protection.
RGB Protocol hopes that Bitcoin will open up a new scalable world, including the issuance of NFTs, Tokens, fungible assets, implementation of DEX functions and smart contracts, etc. Bitcoin Layer 1 is used as the basic layer for final settlement, and Layer 2 such as Lightning Network and RGB are used for faster anonymous transactions.
3.Why BiHelix will become the most anticipated infra in the BTC ecosystem
1）BiHelix’s strategic rhythm
BiHelix is a Bitcoin application framework layer based on the Lightning Network and RGB protocol, providing a Turing-complete smart contract ecosystem network with unlimited scalability. It aims to create a more convenient platform for developers to expand the application scenarios of Bitcoin and solve the scalability and Turing incompleteness challenges faced by the Bitcoin blockchain. It has received investment from well-known institutions such as UTXO, Waterdrip Capital, Satoshi Lab, LK Venture and Candaq Fintech Group.
BiHelix has launched the wallet SDK interface and completed wallet integration with TokenPocket. In addition, the research and development work of integrating the Lightning Network into BiHelix nodes has also been completed, and users can manage their RGB20 assets through the Lightning Network channel. The function of transferring RGB20 assets on the Lightning Network is currently in the grayscale testing stage and will be launched soon. At that time, the entrance will be opened under the BiHelix network in the TP wallet. In the future, other wallets will also access Lightning Network related APIs, and users can experience the 0BTC miner Free, nearly zero-latency Lightning Network transaction experience.
This is an important milestone. BiHelix is currently the only project that has completed the work of connecting the RGB protocol and the Lightning Network, bringing the Bitcoin ecosystem into the era of super smart contracts: the performance is currently 40 million TPS, BTC does not need to be cross-chain, almost 0 BTC Mining fees, etc.
As a Bihelix ecological project, Jerry’s Box is inspired by the famous cartoon "Tomand Jerry" and is a large-scale social experiment project based on the RGB protocol. More than 1.6 million Bitcoin ecological whitelists are about to be airdropped, and the handling fee is only less than 10U. This was impossible in the past. This is an absolute advantage for other projects in reducing dimensionality.
2）BiHelix’s ecological layout
The singularity of the Lightning Network in the BTC ecosystem has arrived, and the entire ecosystem is about to enter a state of emergence and usher in a new wave of explosive growth. The following is an introduction to other projects that can transfer money on the Lightning Network in addition to Jerrybox
RAL
RAL is a market maker (AMM) and decentralized exchange (DEX) built on the RGB network. Although the early liquidity on RGB is isolated from the platform, RAL uses the liquidity of its capital pool to be able to trade in the center of RGB. The limit order book has solved the liquidity problem of RGB. It can also provide pledge lending services to facilitate external funds to enter the RGB network. In addition, RAL’s donation plan is also worthy of attention.
Paraluni
Paraluni (Parallel Universe) is a comprehensive decentralized financial service platform. With the mission of building the financial and economic foundation of the Web3.0 era, Paraluni provides fair, credible, and sustainable decentralized inclusive financial services. The highlight of this project is that there is no private placement, ICO, or pre-mining. All token output is obtained through mining after the project is sold.
Nice
Nicecoin is the first modular component on the BiHelix platform, providing developers with blockchain-based game development components. As part of the Web3 Game Alliance ecology, Nicecoin not only provides the function of ecological reward MemeCoin, but also promotes the exchange of technology and concepts among developers when building innovative games, injecting vitality and creativity into the development of the entire ecosystem.
POP
POP is an NFT issuance and trading platform based on the Lightning Network and RGB protocol, providing fast and low-cost transaction services. With the help of the POP platform, users can easily discover and trade a variety of unique digital assets, unlocking unlimited possibilities. At the same time, users are encouraged to actively participate in the construction of the NFT ecosystem and jointly build an innovative and dynamic digital asset community.
Bang
Bang is the first lightweight QRDePIN project in the BTC ecosystem based on the RGB protocol. By combining QR codes to gamify virtual mining machines, DePIN can be applied to various IPs, derivatives and hardware, and connect them to the BTC network stand up. In the future, Bang plans to implement the project through three methods: customized AI large models and smart contracts, commitment to chaining and customized smart contracts, as well as the Internet of Things, human-computer interaction and customized smart contracts. At the same time, Bang will use POW technology to ensure the permanent uniqueness of timestamps and prevent rollback and tampering to realize its slogan: entrusting the right to life to BTC.
4.The future of BTC application ecosystem is coming soon
Over the past 15 years, Bitcoin has experienced multiple technical upgrades and improvements, including shortening transaction confirmation times, discussions on expansion plans, and enhanced privacy protection. Current exploration in the direction of expansion includes state channels: Lightning Network, expansion protocol RGB and other solutions. The realization of scaling on non-Turing complete Bitcoin has gradually begun to see the light.
Bitcoin is the most orthodox and decentralized public chain belief and the fairest asset issuance. More and more developers are beginning to build in the Bitcoin ecosystem. As the infrastructure gradually stabilizes, the explosion of the Bitcoin application ecosystem is inevitable.
Citing articles:
https://www.chaincatcher.com/article/2087343 https://foresightnews.pro/article/detail/54736 https://www.theblockbeats.info/news/50733 https://foresightnews.pro/article/detail/46271
https://www.chaincatcher.com/article/2109580 https://finance.sina.cn/blockchain/coin/2021-08-16/detail-ikqciyzm1762220.d.html https://foresightnews.pro/article/detail/40875
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