Bitcoin Script has brought both wealth and controversy to the cryptocurrency world this year. “Bitcoin Core” developer Luke and Bitcoin’s godfather, Adam Back, have expressed different views on the future development of Ordinals and Bitcoin L2.
In his article published on December 6th, Luke publicly opposed Bitcoin Script, while on December 17th, Adam Back presented a different perspective. He believes that we should not try to suppress Script, as issuing assets on the Bitcoin chain brings significant benefits to Bitcoin miners and contributes to the long-term stability of Bitcoin. The congestion issues caused by Script can be solved through the development of Bitcoin L2.
Adam Back, who invented Hash Cash in 1997, which directly inspired Satoshi Nakamoto to create Bitcoin, is known as the godfather of Bitcoin. His company, BlockStream, is a well-known Bitcoin development company and has played a key role in previous Bitcoin upgrades, including SegWit and Taproot. He has significant influence in the Bitcoin community.
Adam Back’s statement has sparked extensive discussion, prompting people to consider what sparks Bitcoin Script and Bitcoin L2 will create. What new development opportunities can Bitcoin L2 bring to Bitcoin and assets on the Bitcoin chain?
I agree with Adam Back’s viewpoint, which reflects the mindset of a builder when considering the development of Script and the Bitcoin ecosystem. On the other hand, Luke takes a more dismissive approach towards Script, seeing it as something to be eliminated. Adam Back provides a practical solution by proposing the development of Bitcoin L2.
I have a deep understanding of Bitcoin Script and have conducted some research on Bitcoin L2. I will use the BEVM project, which I have focused on, as an example to explore the potential of Bitcoin Script and Bitcoin L2.
BEVM is a decentralized Bitcoin L2 project that is compatible with BTC and supports EVM. It has already launched its testnet, and many ecosystem projects have been deployed based on BEVM.
To understand the relationship between Bitcoin Script and Bitcoin L2, we need to review the history of asset issuance. From 2016 to 2019, the mainstream narrative in the crypto industry was based on issuing assets on Ethereum using ERC20, which was the dominant token issuance standard at the time, just like BRC20 and other XRC20 standards for issuing tokens on Bitcoin today. The ICO boom in 2017 was as significant as the Script Fair Mint in 2023. However, most ERC20 tokens experienced significant volatility and eventually became worthless, similar to the fate many XRC20 tokens face today.
During the same period from 2016 to 2019, besides the creation of various tokens, DeFi protocols were also developed to build application scenarios around tokens. Examples include MakerDAO and Uniswap, which have survived market fluctuations and become paradigms of decentralized applications. From this historical perspective, it is possible to construct decentralized Script applications using Bitcoin Script or various XRC20 tokens. This is an inevitable trend.
However, Bitcoin’s minimalistic UTXO design, limited block space, and inherently Turing-incomplete architecture make it unable to support decentralized applications. Therefore, Bitcoin L2 becomes a necessity. Bitcoin needs L2 more than Ethereum. This conclusion may not have been widely accepted before the Script boom in 2023, but today, for teams that have issued Script and continue to build, Bitcoin L2 has become almost the only solution for the future development of Script.
Looking at the development of Bitcoin Script from its inception until now, we can divide its evolution into two stages: Bitcoin Script 1.0 and 2.0.
Bitcoin Script 1.0 was straightforward: conceptual narrative, Fair Mint, community FOMO, narrative failure, and disappointment. Many narratives described the desire to create cross-chain bridges, DEXs, oracles, and launchpads. If these applications were to be realized, the best option would be to deploy them on Bitcoin L2 and build decentralized applications and scenarios around Script on L2. Therefore, we can glimpse the gameplay of Bitcoin Script 2.0: issuing assets on Bitcoin L1 and building applications on Bitcoin L2.
Therefore, we can predict that future Bitcoin ecosystem teams will issue tokens based on Bitcoin using Fair Mint and transfer these assets to Bitcoin L2 to explore various applications. Users can capture the value of these applications or protocols using tokens. Therefore, we will see various Script applications running on Bitcoin L2.
Furthermore, if BEVM also supports token minting protocols like Fair Mint in the future, users can directly launch assets on BEVM and build decentralized applications on it, which would be an excellent entrepreneurial direction. To better understand, let’s take an example:
Currently, there is a Bitcoin-based NFT project called Bitmap, which is a cool project that creates “metaverse land” based on Bitcoin’s block issuance schedule. It already has nearly 30,000 addresses holding the NFT and has a strong community base. If Bitmap wants to expand into more complex metaverse application scenarios, it obviously cannot be supported by the Bitcoin mainnet. Therefore, Bitmap can migrate to BEVM and directly build various decentralized scenarios, such as GameFi or metaverse scenes based on Bitmap NFTs. Moreover, it can still use BTC as gas with lower fees. Bitmap can also issue governance tokens on BEVM to govern the entire Bitmap ecosystem.
Not only Bitmap but also Bitcoin Frogs, MNCHRMS, OrdiRocks, and other Bitcoin-based NFTs can follow a similar approach to build richer application scenarios on BEVM.
Since BEVM achieves fully decentralized cross-chain interoperability for Bitcoin and assets on the Bitcoin chain, a large number of Bitcoin and Bitcoin chain assets can circulate on BEVM without the need for trust. These assets are equivalent to assets on the Bitcoin mainnet, ensuring their security. This design has several benefits:
1. Allowing Script assets to be executed on BEVM significantly reduces the execution pressure on the Bitcoin mainnet, preventing congestion and invalid data. Bitcoin handles asset registration and ledger security, while Layer 2 executes these applications, providing clear division of labor and mutual benefits.
2. Many Script assets that were difficult to build applications on the Bitcoin chain now have the infrastructure, such as BEVM, to expand Script application scenarios. This allows for more diverse and sustainable gameplay.
3. Ultimately, this forms a closed ecosystem where Bitcoin L1 issues assets and Bitcoin L2 builds applications. This is likely the development path for the current Bitcoin ecosystem, and we eagerly anticipate its future.
Related articles:
– The First Oracle of Bitcoin, Alex Labs, Opens the Door to Bitcoin’s DeFi
– Understanding the Differences Between Layer 2 and L2 Rollups: The Path Forward for the Bitcoin Ecosystem
– Why Bitcoin Ecosystem “Will” Surpass Ethereum?