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To say OG blockchain Bitcoin has proven impervious to assassination attempts would be a stretch, but it’s certainly shown itself to be robust and resilient since Satoshi Nakamoto bequeathed it to the world nearly 15 years ago. Despite numerous attempts to undermine, ban, burn and bury it, it continues to operate as a highly efficient, highly secure settlement network and a beacon of hope for those who’ve become disillusioned by the traditional financial system.
Obsessively tracking the price movements of bitcoin (BTC) has turned into a favorite pastime of many, with detractors delighting in announcing Bitcoin’s demise only to crawl back under a rock when it inevitably rides out the rough spells. But continually sweating the value of one’s stack does a disservice to the slow, steady and unsexy work that continues to go into finessing Bitcoin’s operation. That said, a lot of developments have been happening at the blockchain level in recent months, to the extent that the price of bitcoin, for once, has become almost an afterthought.
Even if the BTC price goes down – and it may well notch its first month of losses in 2023 – it’s possible that Bitcoin may, as a consequence of such developments, cement its status as the preeminent layer-1 chain by claiming its rightful place above a sea of imitators and competitors.
From Ordinals to Mintlayer: Bitcoin’s Roaring 2023
These developments cannot have escaped your attention. Propelled by surging activity on Ordinals, the protocol that belatedly brought NFTs to Bitcoin, Satoshi’s network became the second biggest NFT blockchain in May. A fact made all the more staggering given Bitcoin NFTs didn’t exist prior to January.
NFT sales on Bitcoin blew other blockchains out of the water as users started obsessively inscribing satoshis with data including Jpegs and text. The hype, for once, was real – even if many hardline Bitcoiners view Ordinals and the so-called BRC-20 token standard as a distraction. Indeed, Samson Mow told Cointelegraph that he expects the ‘unsustainable’ hype around Ordinals and BRC20 tokens to fade away within a matter of months.
The success of Ordinals, not to mention subsequent bitcoin NFT support from the likes of Binance, can be set to one side: the blockchain’s 2023 renaissance is about more than just non-fungible tokens. We see it with Babylon, a project that wants to leverage the security of Bitcoin to augment and enhance the security of other chains, specifically those in the Cosmos ecosystem.
Effectively, Babylon boosts the appeal of Bitcoin by functioning as a go-between between chains that need extra security and the gold-standard network. The project has ambitions to eventually get hundreds of chains using its service, since almost all will benefit from an extra layer of security. Just announced by its lead researcher, David Tse of Stanford University, a BTC staking protocol – the first of its kind, that allows BTC holders to participate in staking of other PoS networks. This new mechanism finally lends the famed security of the bitcoin blockchain for other, less secure PoS smart contract blockchain protocols.
Another project extending Bitcoin’s function and enhancing its reputation is a collaboration between Swiss non-profit ZeroSync Association and infrastructure firm Blockstream. The partners are planning to broadcast Bitcoin zero-knowledge proofs from Blockstream’s satellite, enabling the network’s nodes to sync quickly from anywhere on Earth.
Given that one weapon of FUD (Fear, Uncertainty, and Doubt) aimed at Bitcoin suggests an internet blackout could destroy it, this seems like a worthwhile endeavor. Favoring ZK-proofs frees nodes from the need to download Bitcoin’s 500GB of data and ensures expeditious syncing rather than a slow, methodical grind. The partnership has earmarked late 2023 for the first experimental broadcast from Blockstream’s satellite network.
The DeFi boom of a few years back, followed by the arrival of GameFi and NFTs, may have created the impression that Bitcoin was being left behind. Or perhaps left to its devices, the better to focus on its original raison d’etre as a store of value. Yet that impression is changing, and there is a growing sense that the single-function decentralized garden is opening up and coming into bloom. Forget the price of bitcoin for a second; the recent mood music may represent a new ascent of Bitcoin as a chain for all seasons.
Can DeFi live on Bitcoin? It’s a question many have mulled since DeFi Summer began in earnest three years ago. Now that we have Bitcoin-based NFTs, as well as layer-2 solutions like Mintlayer which let users build a DeFi ecosystem rooted in Bitcoin, it’s no longer in the realms of the hypothetical.
As a Bitcoin sidechain supported by the Lightning Network, Mintlayer dispenses with the need for wrapped tokens or blockchain bridges (as well as their smart contract vulnerabilities), enabling users to directly exchange BTC using atomic swaps. Mintlayer can be used to create DEXs, lending platforms, marketplaces and much else besides, and the project counts Bitcoin Foundation founder Charlie Shrem as an advisor.
Although launched in 2020, Mintlayer has found traction this year perhaps as a consequence of last year’s many bridge exploits, not to mention a growing desire among bitcoiners to use BTC directly for DeFi plays. In April, the project announced a $4 million grants initiative to aid the development of Bitcoin-centric DeFi tools and resources.
While Mintlayer has grand visions of bringing DeFi to Bitcoin, EVM rollup platform Rollux is leveraging Bitcoin’s unrivaled security to facilitate fast, cheap, and secure transactions at scale. The brainchild of SYS Labs, Rollux’s mainnet is set to launch on June 28 with the goal of bridging the gap “between the existing capabilities of blockchain and the needs of users, developers, and enterprises,” to quote SYS Labs’ CEO Jagdeep Sidhu. It’s yet another example of a project distinct from Bitcoin tapping into its fundamental strengths.
What Next?
At the time of writing, the SEC is cracking down on exchanges with both Coinbase and Binance in its crosshairs. And with regulatory concerns swirling (aren’t they ever?) talk has once again turned to the potential impact on bitcoin’s price. The more things change, the more they stay the same.
Away from price chatter, the picks-and-forks work continues without the same fanfare (or doomsaying) that greets every price swing, and somewhere on the horizon, the fourth Bitcoin halving looms. The ramifications of the halving can be debated another day. For now, let’s raise a glass to the builders and believers, the passionate army quietly but very noticeably powering Bitcoin’s latest renaissance.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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