Bitcoin Layer2: A topic worth discussing

When I began to delve into the field of Bitcoin Layer 2, I discovered some interesting perspectives and insights worth sharing and discussing.

Since June 2023, I have been closely following the Bitcoin Layer 2 track, investing a lot of time studying Bitcoin scalability technologies, and keeping long-term tabs on some projects that I believe have technical content. After a period of in-depth exploration, I have gained some new insights into BTC Layer 2.

The Relationship Between Layer2 and Scalability

The concept of Layer 2 originated from Bitcoin. Satoshi Nakamoto mentioned the Simple Payment Verification (SPV) scheme in Chapter 8 of the Bitcoin whitepaper, which laid the foundation for the later Lightning Network. The Lightning Network is realized based on SPV, and it indeed helps Bitcoin achieve "scalability" in terms of transactions to some extent.

However, when we turn our attention to Ethereum's Layer 2, the situation is different. While Ethereum Layer 2 can share Ethereum's security, it has not truly solved Ethereum's scalability issue. This is mainly because Bitcoin and Ethereum have adopted different account models.

The UTXO model of Bitcoin allows for concurrent processing of transactions and local state updates, while Ethereum's unified account model relies on a global state tree for updates. This fundamental difference results in different performance in terms of scalability for the two.

Business Model of Layer2

From another perspective, Layer 2 projects seem to reflect more of a business model rather than pure technological innovation. Most Layer 2 solutions are centralized, lacking a true consensus mechanism and node concept. They primarily profit by charging Gas fees, while users expect to receive token airdrops.

This model has attracted the attention of many large projects and traditional business entities. We are seeing more and more companies starting to develop their own Layer 2 solutions, creating their own business closed loops. However, this trend of development seems to deviate from the original intention of decentralization.

Future Development Direction of Bitcoin

After careful consideration, I believe that Bitcoin itself may not need Layer 2 solutions. Instead, the entire cryptocurrency industry needs to leverage the value and influence of Bitcoin. Projects like WBTC exemplify this well - they bring Bitcoin, the "digital gold mine," into other financial ecosystems.

Furthermore, we should consider the role that the Bitcoin network may play in the future. Some believe that Bitcoin could become the currency for on-chain AI and a decentralized control system for AI consensus issues. This perspective elevates the value of Bitcoin to a new height, surpassing the mere concept of "digital gold."

Conclusion

Bitcoin Layer 2 may no longer be the most promising entrepreneurial direction. As Bitcoin gradually becomes a national monetary reserve, its development has entered a new stage. The most potential direction in the future may be to explore the greater value that this continuously growing decentralized control system could play in the era of coexistence between humans and AI, centered around the Bitcoin network itself.

We should go beyond the BTC token itself and fully explore the potential of the Bitcoin network. This may be the most valuable legacy left to humanity by Satoshi Nakamoto.