Further Discussion on Bitcoin Ecosystem (I)

Source: Daoshuo Blockchain

During the Twitter exchange last Saturday, many friends asked questions about Bitcoin ecological applications and Bitcoin ecological assets, both in the previous question-and-answer session and the subsequent on-site exchange session.

It seems that not many people have questioned the significance of Bitcoin ecology so far. But I think the main reason why everyone has raised so many questions is probably because in the recent sluggish market, the assets in the Bitcoin ecology have performed more sluggishly than Bitcoin, so everyone is worried:

Will the Bitcoin ecology prosper again?

Can the assets in the Bitcoin ecology create glory again?

......

In the exchange, I gave more direct answers to these questions and less ideas. I think it is necessary to use a few more articles to systematically share with you my thinking logic and ideas on these issues, so that everyone can understand why I gave those answers.

The core of my understanding of Bitcoin ecology is: if the assets in the Bitcoin ecology (even including Bitcoin itself) can continue to step up in the future, they must eventually need ecological applications to support them.

The development of ecological applications must be supported by a solid infrastructure. This infrastructure must be secure, scalable and high-performance.

Then there must be innovative applications and scenarios on top of this infrastructure.

When these factors work together, all kinds of assets in the Bitcoin ecosystem will rise, and new species (assets) will continue to grow.

According to this idea, let's first look at the infrastructure of Bitcoin.

From a technical point of view, due to the technical limitations of the Bitcoin mainnet, it is far from meeting the standards in terms of scalability and high performance. Therefore, if it wants to build its own ecosystem, it must have a second-layer expansion as infrastructure and develop extensive and complex applications and scenarios on the second-layer expansion.

In this architecture, Bitcoin's second-layer expansion will be the core infrastructure of the Bitcoin ecosystem, and the applications and scenarios built on the second-layer expansion are the key to whether the Bitcoin ecosystem can bear fruit.

But at the same time, also due to the technical limitations of the Bitcoin mainnet, its second-layer expansion is difficult to rely on the mainnet to provide strong security like Ethereum's second-layer expansion. I think this will limit the development of Bitcoin ecology in terms of applications or that there is a certain upper limit to the application of Bitcoin ecology.

Precisely because of such inherent deficiencies, the development of Bitcoin ecology must have its own unique innovation and take a path that Ethereum has not taken.

This is my understanding of the overall thinking and logic of Bitcoin ecology. It can also be summarized into three points:

Innovation is the soul, the foundation of the second layer expansion, and application is the key.

Let's look at innovation first.

When we talk about innovation, we must jump out of the present and expand our horizons. Imagine that we travel through five, ten or even a hundred years later and look back at this period of history: In this round of the development cycle of the crypto ecology, what is worth remembering and recording in the annals of history for people several years later?

I believe it must be the BRC-20 that came out of nowhere.

This protocol not only inspired many protocol innovations that appeared in the Bitcoin ecosystem (ORC, ARC, STAMP, RGB, RUNE...), but also inspired protocol innovations in other blockchain ecosystems (Ethereum, Solana, BNB Chain,...).

Although many subsequent protocols have many details that beat BRC-20 in terms of innovation, they are never "first" but "successors".

Innovation is divided into two types: one is disruptive innovation, and the other is improved innovation.

No matter how simple BRC-20 is, it is the former, and other protocols are only the latter.

It is not only an innovation in the Bitcoin ecosystem, but also an innovation that the Ethereum ecosystem has never had.

The first asset born based on BRC-20 is ORDI. It is not only the first asset of this protocol, but also the first implementation of a series of concepts such as "fair launch" and "ownerless tokens" in the entire crypto ecosystem.

Of course, strictly speaking, ORDI is not the first, and XCP also achieved these before it. But when XCP was born, its audience was too small, so it could not resonate and ferment in the entire ecosystem.

It was ORDI that completely ignited and resonated with the concepts of "fair launch" and "ownerless tokens" in the entire crypto ecosystem.

ORDI's historical positioning is irreplaceable by any other protocol asset.

So on Saturday, when answering readers' questions such as "How do I view the tokens of the Rune Protocol", my answers were very straightforward: For those tokens, even if they are the first of those protocols, their status is far from ORDI. I will only hold airdrops but will not actively buy them.

In the current sluggish market, there is only one that I am really willing to spend money to buy and think has controllable risks: that is ORDI.

We can also think from another perspective: if the most extreme situation occurs, the Bitcoin ecosystem does not develop at all, and other assets may collapse in the end, but ORDI will definitely be remembered by people.

This is my idea and logic for measuring the basic value of other tokens and ORDI.