How to objectively view the technological innovations and challenges of the Bitcoin ecosystem?
The "scaling" around the Bitcoin ecosystem should not be simply criticized as an expansion narrative.Author: Haotian
Recently, I have looked at many early projects in the Bitcoin ecosystem, especially those derived from technological innovations surrounding Ordinals, the Lightning Network, Taproot Assets, and the RGB protocol. Whether it is narrative overflow or technological breakthroughs, explorers, speculators, and critics around the Bitcoin ecosystem have coexisted. So, how should we objectively view the current state and future of the Bitcoin ecosystem? Here are some shallow thoughts:
1) "Scaling" the Bitcoin ecosystem cannot simply be criticized as expanding the narrative or reinventing the wheel;
It is undeniable that there are speculators who ignore the chain's native characteristics and replicate various market strategies to seek short-term profits. However, upgrading the "narrative" for the Bitcoin ecosystem is, in the long run, a hope to increase Bitcoin chain transactions after the mining effect weakens, seeking new sustainable income sources for Bitcoin miners. Therefore, "scaling" Bitcoin is not politically incorrect; the key is to ensure it is on the right "narrative" path.
2) What constitutes a legitimate narrative?
Within the Bitcoin community, there are two potential rules to follow: 1. Do not change Bitcoin consensus; 2. Do not increase the mainnet burden. The current Ordinals narrative adopts a decentralized way for users to input parameters into the Bitcoin network, with third-party indexing platforms providing "legitimacy." This narrative can bring txs to the mainnet, somewhat aligning with miners' interests. However, the massive influx of unordered data driven by FOMO can lead to "dust attacks," burdening the mainnet. While BitVM theoretically achieves Turing completeness, its practical application probability is almost zero due to its overly ambitious ideas. The RGB client verification solution has a large operational space but relies on consensus trust in the RGB client. In contrast, the Taproot Assets protocol aligns with mainstream legitimate narratives and is a track worth long-term attention.
3) Taproot Assets, based on the Lightning Network's HTLC off-chain contracts, achieves effects similar to layer 2 and Rollup. A large number of high-frequency trades through mutually trusted Taproot address channels are equivalent to layer 2 batch transactions, and timely mainnet settlements based on hash time locks are akin to state updates.
Although the Bitcoin mainnet only provides asset settlement, at best it can be considered a limited DA layer, this "scaling" method currently appears to be solid in both technical logic and practical approach. The only potential criticism might be that development is too slow. However, consider that it took five months for the Ordinals protocol to give rise to the BRC20 craze; we should also give Taproot Assets some time to accumulate energy.
4) I have seen many early projects in the Bitcoin "scaling" direction, some based on the RGB protocol for swaps, others wanting to extend layer 2 based on the limited DA of Ordinals, and some sidechain solutions.
Overall, fundraising has not been smooth. On one hand, VCs are generally familiar with the narrative logic of Ethereum projects and still hold limited skepticism about Bitcoin's technical scalability, requiring time to research and learn. On the other hand, the current narrative of Bitcoin "scaling" is still heavily fragmented, with developers of Ordinals, RGB, and the Lightning Network seemingly at odds with each other. These developers need to converge on a mainstream narrative, just as Ethereum's plasma and validium ultimately converged into rollups. Personally, I judge that the ultimate scaling solution for Bitcoin will likely find its space in the direction of Taproot Assets.
