Why is it that the Bitcoin ecosystem cannot replicate Ethereum’s ecologically diverse gameplay?
Original author: Haotian (X: @tme l0 211)
After the Inscription market became popular, many people put too much expectations on BTC L2. Do they think BTC layer 2 will be as brilliant as Ethereum layer 2?
However, the fact is that the success of the Bitcoin ecosystem may remain at the asset issuance narrative stage for a long time. It may not be feasible to replicate Ethereums ecologically diverse gameplay. Why? Next, I will share some technical logic:
BTC and Ethereum belong to two heterogeneous chain types. The former is a stateless chain, while the latter implements complex composable financial business logic based on smart contracts.
To copy various financial methods such as DEX, Lending, Derivatives, and Aggregator on Ethereum to the Bitcoin chain, the key is to build programmable state + calculation + verification capabilities for Bitcoin.
Status: At present, the Bitcoin UTXO collection can only calculate real-time balance, historical balance, and historical records, which constitute the basic status of the contract, and cannot be realized at all;
Computing: The UTXO unlocking condition in the Bitcoin ScriptPubkey script can be regarded as its core computing power, but this computing power is very limited and it is difficult to express complex business logic;
Verification: The full node of the Bitcoin network can verify information such as UTXO balance and script signature, but it is limited to these basic verifications themselves. The Bitcoin network cannot even verify the specific execution effect of these logics.
In short, if you want to implement complex financial applications on Bitcoin, you need to extend it based on the limited capabilities of Bitcoin and build a programmable framework with state + calculation + verification.
We look back at the Ethereum expansion route, and have gone through multiple route explorations such as Plasma, Rollup, Validium, etc., and finally chose Rollup as the mainstream. The earliest block size adjustments in Bitcoin’s expansion, SegWit Segregated Witness, etc. have long come to an end. Currently, it is mainly involved in the orthodoxy disputes over side chain Stacks, client verification RGB, and state channel verification Lightning Network.
Since Plasmas side chain cannot support smart contracts, Validium is too independent and cannot inherit the security of the main network. The Rollup route can break out of the siege precisely because it can not only inherit the security of Ethereum DA, but also be flexible enough to increase the upper limit of TPS. The key is that the mainnet Rollup contract can be verified by the mainnet Validators, and Layer 2 users can also initiate challenges to withdraw funds. rights and interests. Although some aspects of the actual implementation process are unsatisfactory, in theory the Rollup solution has gained mainstream market consensus.
For reference, Bitcoin side chain, client verification, and state channel verification are currently developing in their own way:
Sidechain Stacks supports smart contracts and has a wide range of application types, but it is an independent consensus outside of Bitcoin and is difficult to be unanimously recognized by the public;
Client verification RGB follows the UTXO model of the main network. The off-chain client can handle more complex transactions, but it does not have two-way verification and constraint capabilities with the Bitcoin main network, and its development momentum is not yet there;
The state channel Lightning Network is currently regarded as a relatively orthodox expansion track because it is close to the core developers of Bitcoin. However, the development of the Lightning Network is too slow. Recently, a new Taproot Assets was released. As a result, it is only an asset running on the main network. It has not really been implemented. It’s still hard to say about the Lightning Network.
If we compare it with the Ethereum model, a mature layer 2 is at least protected by the security of the main network, and the expansion effect must be obvious. The most important thing is that it can run smart contracts in multiple scenarios. Using this as a standard, sidechains, client verification, and state channels all seem to fall short.
Protected by the main network: Lightning Network > Client Verification > Sidechain;
Scaling effect: side chain > client verification > lightning network;
Contractual features: side chain > client verification > lightning network.
A comparison of the new tenets of the expansion route makes it very clear: If security is the top priority, then you must wait for the Lightning Network to develop into a large scale. If you only pursue expansion, then don’t try to rectify Bitcoin. A suitable side chain can solve all problems. If you want to Taking into account all three at the same time, client verification RGB is the optimal solution.
The question is, which route is worthy of entrusting the vision of Bitcoin layer 2?
1) Side chain, although it can be done, it is an independent consensus chain, no different from Ethereum. A logical paradox arises. We already have a super smart contract verification network like Ethereum, why do we need to do it? What about a brand new Bitcoin sidechain? Wouldnt it be more perfect to let Bitcoin guard its position in the value storage chain and let other chains similar to Ethereum expand the development imagination space? Whats the point of driving in reverse?
2) Client verification, similar to Ethereum’s Rollup, the comprehensive performance of RGB client verification is more suitable for the mainstream expansion of Bitcoin. Like its name, this market is still a “black box”. How can it develop? The extent is still unknown, and no conclusion can be made prematurely;
3) State channel. Due to the legitimacy of Lightning labs, Lightning Network was once given high hopes of expanding Bitcoin. However, after Taproot Assets, the Lightning Networks partial payment network characteristics will eventually lead to a side chain solution that favors the Ethereum Plasma payment network. I am afraid it will be difficult to become the second layer that can undertake a variety of financial gameplay as imagined.
In essence, trying to copy Ethereums diverse financial gameplay to Bitcoin is a bit too hasty. The Bitcoin ecosystem may have a lot of room for expansion, but it may not copy Ethereum
Just imagine, innovation on Ethereum is also affected by the established fundamentalism behind it, not to mention Bitcoin, which has more stringent doctrines and doctrines?
above.
Ethereum layer 2 is prosperous because the smart contract itself is composable and can be combined to stack Lego infinitely. The biggest risk in the entire process is actually consensus overload, but the diverse gameplay within the payload is enough to give developers a broad horizon. stage.
As for the Bitcoin layer 2 ecosystem, its basic functions are too weak, its scalability space is too abundant, and its own security consensus is too strict. There is a consensus for success and a consensus for failure. The consensus builds an absolute barrier for Bitcoin, but it is also the fundamental reason for the limitation of ecological innovation.
Therefore, due to chaos and contradiction, most capital, institutions, and mainstream user groups feel incomprehensible.
VCs outside the Bitcoin ecosystem hold huge sums of money but are unable to get in because they don’t know how to tell the narrative of Bitcoin Build to make logical Make Sense. However, developers within the Bitcoin ecosystem are stuck in various routes. There is a lack of unified development direction.
Although the majority of retail investors are in FOMO, everyone only cares about the wealth myth that may be created by issuing coins with inscriptions, and no one cares about Build.
Although the asset issuance routes of the Ethereum ecosystem are diverse, they ultimately revolve around the hidden line of value capture. Whether it is VC-driven or retail-driven, value must ultimately be deposited.
The same goes for the Bitcoin ecosystem. The market cannot stay in the prosperous stage of pure asset issuance forever. In the end, there must be continuous breakthroughs in technology, continuous building by people, and continuous development of projects.
This market cannot be all MEME.
