Why is it said that the Bitcoin ecosystem has no chance to surpass Ethereum for the time being?

Source: Lightning HSL

(Let me tell you in advance, I am not short on Bitcoin)

As Inscription continues to become popular, especially after receiving okx and With the dual strong support of Binance, the entire blockchain industry has begun to discuss whether the Bitcoin ecosystem will surpass the Ethereum ecosystem or even the EVM ecosystem.

As of now, I subjectively judge that it is impossible.

There are many reasons, but the fatal and decisive one, I think, is as follows: “The current Bitcoin script engine does not support migrating native BTC coins to various ecological protocols.”< /strong>

Currently I have not seen any protocols based on Bitcoin (except Lightning Network), such as Brc20, ARC20 , RGB, RSK, STX, Liquid and other protocols cannot use these protocols to issue a two-way anchor "L1< on the premise of decentralization. span lang="en-US">native tokenBTC”’s token.

Let me tell you a few words about what this means.

ETH ecology, such asuniswapswap, aave's lending, you can directly use Ethereum ETH, there is no need here. Any bridge, any conversion (actually there is a conversion between ETH coins and ETC-erc20coins, but this It is completely decentralized and has no user awareness), so smart contracts on the Ethereum network can have direct jurisdiction over the ETH currency itself.

Let me use another metaphor to illustrate that Chinese banks can accept houses in China as collateral to issue loans. This is because once the user fails to repay the loan, the bank can auction the house collateral. .

But Chinese banks will not accept American houses as mortgage loans, because Americans will not repay the money. How can your bank auction American houses? If you rebel, the American emperor will not kill you.

If Chinese banks can accept American houses as collateral, in accounting terms, American houses can be included in the balance sheet of Bank of China as assets. If this is possible, then the Chinese financial industry will What a prosperity.

The smart contracts in the Ethereum ecosystem are like banks in the country managing the collateral of houses in the country, but the current agreements seen in the Bitcoin ecosystem are like Chinese banks accepting houses in the United States. It's also unreliable as collateral.

Why "BTC ecological protocol can truly effectively manage L1Native tokenBTC" is the decisive factor in determining ecological prosperity?

First of all, I thinkthe blockchain ecosystem is essentially a financial ecosystem, and what everyone is playing in is the financial industry.

And I think "assets" are the core element of finance and the decisive force. The assets themselves are the key to economic prosperity.

Just like the teacher said, the people are the decisive factor in the outcome of the war, and assets are the decisive factor in financial prosperity.

To be more precise, the financial industry can keep blowing bubbles. Essentially, the financial industry can effectively mortgage and trade ownership of various assets. On this basis, more products can be derived. Complex finance can blow bigger bubbles. If some assets cannot be effectively mortgaged and traded, then these assets will not promote the entire financial system.

Why has A-shares stopped working since last year, no matter how good the country is? This is because China’s most important asset is real estate, and real estate is no longer working.

Just like Chinese farmers own land,18100 million acres, but these are the most precious lands in the world. There is no relevant system to ensure that they can be mortgaged and traded, so they have nothing to do with the entire country's financial system.

The decisive force for the prosperity of the Ethereum ecosystem is the many assets on the Ethereum ecosystem, as well as the mortgages and transactions that can be truly effective by smart contracts.

In the Bitcoin ecosystem, there is currently no similar technology that can effectively mortgage and trade Bitcoin’s native assets under the premise of decentralization.

The largest asset in the Bitcoin ecosystem is BTC. Other assets are junk assets, but the current protocol cannot utilize BTC. I feel that in this context, truly high-quality finance cannot be born. ecology.

Perhaps we can use accounting knowledge as an example. The Ethereum ecosystem can form a complete balance sheet, but the assets in the Bitcoin ecosystem are isolated from each other and cannot be Reflected in a table.

Of course, the Bitcoin ecosystem can give birth to projects with a gaming nature such as NFTs and meme coins, but it is still unclear how to develop more complex projects in the next step. Financial ecology, which results in the economic behavior of these ecological coins being isolated from each other and unable to relay and combine with each other.

But the assets in the Ethereum ecosystem can be combined with each other, and on this basis a prosperous financial ecosystem has been born.

The Lightning Network can truly combine "L1Native tokenBTC" is implemented in L1-BitcoinandL2-LightningThese two networks allow deposits and withdrawals, and they are truly bridges that do not rely on centralization.

If the Lightning Network can develop more complex asset issuance and smart contracts, I think the Bitcoin ecosystem is more likely to explode. But for the Bitcoin ecosystem based on protocols such as inscriptions, RGB, side chains, etc., I subjectively think there is little chance so far.

But does Bitcoin have a chance to develop a protocol that can truly utilize native BTC?

I think there is a chance if the Bitcoin script engine can be significantly modified.

The most important direction should becovenant(Restrictions), the developers of BCH attach great importance to this direction, as it is technically similar to BTC by more than 99%'sBCH has now achieved something similar to decentralization Products and functions such as swap, on-chain contracts similar to dydx, and stablecoin lending protocols similar to Dai are also being developed. These can already allow on-chain assets to be combined with each other to create a financial ecosystem. However, there is a lack of high-quality assets on the BCH chain, so there is little hope of building a prosperous financial ecosystem.

So, I think if BTC’s script engine can make more radical improvements, Bitcoin can completely give birth to a super prosperous financial ecosystem.