After the inscription Fomo wave, how should the Bitcoin ecosystem be implemented?
Original author: Haotian (X: @tmel0211)
Editors note: After the Fomo boom, can the inscription market take on a new Bitcoin Layer 2 boom? How should the Bitcoin ecosystem be implemented? Crypto researcher Haotian (X: @tme l0 211) published an article discussing the implementation route of the Bitcoin ecosystem and the narrative space of Bitcoin Layer 2. Haotian said that Bitcoin’s orthodox Layer 2 may be a false proposition, and the Bitcoin ecosystem needs to explore an implementation route that is consistent with its native characteristics. Odaily organizes it as follows:
When the Inscription Fomo wave swept across, I contacted some real Bitcoin developers and found that they were not hot-headed and said things like Bitcoin layer 2 subverting Ethereum.
On the contrary, everyone has a consensus:The Bitcoin ecosystem will have opportunities, but it will definitely be different from Ethereum’s DeFi Lego combination paradigm.Next, based on technical logic, how should the Bitcoin ecosystem be implemented?
Indeed, the new asset issuance method of inscriptions has brought many people back to the ICO moment in 2017, and their enthusiasm was completely ignited. This wave of inscription craze has brought new users, new application scenarios, and new incremental funds. To some extent, it is not an exaggeration to call this bull market a Bitcoin bull.
As a result, side chains, Lightning Network, Taproot Assets, RGB, BitVM and other directions are crowded with Bitcoin orthodox layer 2 coveters. Whenever they talk about the Bitcoin ecology, they claim to replicate everything in Ethereum, which is really disappointing. Human intracranial orgasm.
Just like the unsustainability of the ICO asset issuance boom, the inscription market is also eager to take over a new Bitcoin layer 2 boom when the Fomo boom ends.
It’s true to have such ambitions and demands, but if you want to copy Ethereum’s ecologically diverse gameplay to Bitcoin, it’s really not feasible.The Bitcoin ecosystem needs to find an implementation route that is consistent with its native characteristics.
The core logic is that the native characteristics of the Bitcoin chain have limited computing and verification capabilities, and even the storage capabilities in the Taproot address Segwit are controversial with dust attacks.
Limited computing determines that more complex transaction logic must be implemented outside the chain.For example, bitVM boldly imagined a Turing-complete calculation based on the optimistic Rollup concept that uses a combination of off-chain circuits + on-chain logic gates (0, 1). It has a great imagination and reasonable technical logic, but the engineering amount is Comparable to the Qin Dynastys human-column computer in Three-Body Problem, it is unrealistic;
Limited verification makes Bitcoin more suitable for asset settlement.Rather than global state verification, for example, the current Schnorr signature and MAST data structure features of Bitcoin nodes bring certain verification capabilities, but Schnorr only aggregates multiple signatures and is limited to multi-signature scenarios, while MAST allows the creation of more complex script, but it relies on the UTXO model and can only do asset settlement and cannot achieve global state verification. Building a complex light node matrix can only enhance the interoperability between the side chain and the main chain, and improve the security and response speed of asset settlement;
There is no doubt about the storage controversy. Bitcoin has developed to the present in a minimalist style. This is the consensus that emerged from the end of the last round of large and small block wars. Therefore, the idea of trying to make a big fuss based on Taproots script space will definitely not work.Although it may not necessarily reach the point where Segwit is castrated, upgrade protocols such as Atomics, RUNE, and PIPE all tend to compromise in the direction of small blocks.For example, Json large-volume data packets are discarded, and the optimization and application of OP_Return space are returned.
These limitations determine thatBitcoin’s layer 2 scaling solution is very different from Ethereum:
1) Bitcoin Data Availability lacks data availability capabilities,Ethereums DA is the main network Validators computing + verification capabilities for data submitted by layer 2. Obviously, although Bitcoin can accept certain data, the main network does not have feasible and efficient computing and verification capabilities.
Therefore, Bitcoin DA is more like a bulletin board in nature. The original RAW Data is stored in the Bitcoin block and can only be used by the off-chain indexer for accounting and confirmation. This will inevitably test the indexers accounting and verification capabilities. If there are multiple indexers, the challenge will be further increased, and there will be problems with confusion and errors in the accounting logic.
2) Bitcoin interoperability is limited in operability,The second layer of Ethereum submits the status to the main network. The main network has a contract that can cooperate with the second layer to launch a 7-day challenge time window and a safety mechanism such as the layer 2 escape cabin to ensure that if the second layer Sequener does evil, the main network It can protect the assets of second-tier users. Obviously, Bitcoin without smart contract capabilities does not have this layer of security. Users can only trust Bitcoin layer 2 not to do evil.
3) The Bitcoin UTXO security model is limited to the payment scenario.Similar to the second-layer solution of Ethereum Plasma, if the second-layer keeps the Nonce Hash corresponding to each transaction in the form of UTXO and the main network, it can find an absolutely safe mode based on UTXO.
But just as Plasma can only be limited to payment scenarios, Bitcoin layer 2 built based on the UTXO model also has this limitation. Generally speaking, mechanisms such as EVM with complex smart contracts and multiple states cannot rely solely on this security mechanism unless other Bitcoin off-chain consensus is added.
Based on this technical logic and understanding, the narrative space of Bitcoin layer 2 is also extremely clear:
1) Use Bitcoin as the settlement layer and build an independent consensus on the second layer to provide a complete set of DA, Interoperability, VM virtual machine and other ecological carrying capabilities that are in line with Ethereum.However, such a comprehensively powerful chain is tantamount to recreating an Ethereum execution chain. Many people actually don’t know that Ethereum actually also has a Beacon settlement chain. The Ethereum 2.0 main chain we see can also be regarded as a Beacon. Layer 2 of the chain.
The reason why everyone has a weak perception of the settlement chain is because the core of the main network is the interactive verification capability. If it is only a settlement chain, then the chain that handles a large number of calculations and verification operations will become the real main chain.
The question is, if we use Bitcoin as the settlement chain, do other chains dare to call themselves the main chain? Does the Bitcoin ecosystem allow such a consensus to exist?
2) Using Bitcoin for payment solutions, including Lightning network, Taproot assets and client-side verification RGB, are essentially based on the Bitcoin mainnet UTXO model to provide security, which actually limits the best applications in these directions. The scenario is payment.
The circulation experience of small satoshis on the Lightning Network is already very smooth. Taproot assets are actually similar to RGB, and are relatively more suitable for payment channels for stablecoins.
If you want to superimpose some more DeFi and EVM states on the state channel and client verification, it is equivalent to adding more complex verification logic to the original UTXO model. Naturally, some states that cannot be verified by the main network will be submitted to the main network. The Internet essentially relies on off-chain consensus. This type of solution may work, but compared to the transaction scenario controlled by the pure UTXO model, the security level will also decrease accordingly.
above. How does the Bitcoin ecosystem come to fruition?
If the Bitcoin ecosystem empowered by pure Bitcoin security consensus points to subsequent stablecoin application consumption scenarios such as Lightning network and Taproot assets;
If in addition to the Bitcoin mainnet consensus, some off-chain consensus is allowed, point to RGB client verification and other complex application scenarios that can implement complex layer 2 smart contracts;
If the Bitcoin mainnet is only a settlement chain and relies on independent consensus outside the chain, then various side chains, alliance chains, index chains, and any other solutions that can build their own consensus and strictly implement transparent settlement of assets seem to be acceptable.
If a Bitcoin Turing computing verification solution such as BitVM is really implemented, without changing the Bitcoin mainnet consensus and the cost is lower than the Ethereum smart contract structure, the above conclusion will be overturned.
In short, the impossible triangle conflict of security + decentralization + scalability is even more intense on the Bitcoin mainnet.The so-called Bitcoin orthodox layer 2 may be a false proposition. In my opinion, if you choose orthodox consensus, you have to accept the expansion of limitations. If you want to break through the limitations, dont use the banner of invincible consensus.
