Bitcoin Layer 2 projects are emerging rapidly, with many projects claiming to be Bitcoin Layer 2 without making any substantial progress, leading to chaos. In response, the well-established Bitcoin information media, Bitcoin Magazine, released an editorial policy on the 21st, clarifying its position on reporting on Layer 2.
Bitcoin Magazine has listed three major criteria that must be met in order for a project to be considered Bitcoin Layer 2 and be included in their reporting scope:
1. Use Bitcoin as the native asset: Layer 2 must be fundamentally designed to use Bitcoin as its primary token or accounting unit and have a mechanism to pay transaction fees in Bitcoin. If there are tokens, they must be backed by Bitcoin.
2. Use Bitcoin as the settlement mechanism for executing transactions: Layer 2 users should have control over their assets and be able to return them to Layer 1 through a mechanism that can be trusted or trustless.
3. Demonstrate reliance on Bitcoin functionality: If the Bitcoin network completely fails but the related system can still operate, it is not considered Bitcoin Layer 2.
In addition, Bitcoin Magazine points out that protocols built on Bitcoin do not fall under Layer 2, but there are still protocols that qualify for reporting, such as:
1. Meta protocols: Systems like Counterparty (XCP) or Ordinals that exist and operate on Bitcoin Layer 1 but do not have their own independent blockchain.
2. Parasitic layers: These systems rely on Bitcoin for existence and cannot operate independently, but they do not meet the other criteria required for Layer 2.
The editorial policy stated by Bitcoin Magazine does not apply to reporting requirements for stablecoins or tokens, and it only applies to BitcoinMagazine.com and its print publications. It does not represent the execution policies of “The Bitcoin Conference,” over-the-counter trading service Rare BTC, or UTXO Management, the asset management division of Bitcoin Magazine’s parent company BTC Inc.
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