Explorers, speculators, and critics coexist A brief discussion on the present and future of Bitcoin’s scaling ecosystem.

Coexisting Explorers, Speculators, and Critics A Brief Discussion on the Current and Future Landscape of Bitcoin's Scaling Ecosystem

Author: Haotian, Source: Author’s Twitter @tmel0211

Recently, I’ve been looking at a number of early-stage projects in the Bitcoin ecosystem, especially a batch of projects derived from technological innovations such as Ordinals, Lightning Network, Taproot Assets, and RGB protocol.

Whether it’s narrative overflow or technological breakthroughs, explorers, speculators, and critics of the Bitcoin ecosystem have always coexisted. So, how should we objectively view the current and future state of the Bitcoin ecosystem? Here are some shallow thoughts:

1) When it comes to “scaling” the Bitcoin ecosystem, it should not be simply criticized as repetitive storytelling;

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While it is true that some speculators disregard the native characteristics of the blockchain and adopt various market strategies for short-term gains, upgrading the “narrative” is a long-term hope to increase Bitcoin’s transactions after the mining effect weakens, seeking new sustainable income sources for Bitcoin miners. Therefore, “scaling” Bitcoin is not politically incorrect, as long as it is done on the correct “narrative” path.

2) What is a legitimate narrative? Within the Bitcoin community, there are two potential rules to follow: 1) Do not change the Bitcoin consensus; 2) Do not add burdens to the mainnet;

Currently, the ordinal narrative involves users decentralizing parameters into the Bitcoin network, and third-party indexing platforms parse and provide “legitimacy.” This narrative can bring transactions on the mainnet, to some extent, meeting the interests of miners. However, under the frenzy of Fomo, a massive influx of unorganized data injection can cause a “dust attack” burdening the mainnet. While BitVM can theoretically achieve Turing completeness, the probability of applying it practically is almost zero. The RGB client verification solution has a large operational space, but it must be based on consensus trust in the RGB client. Comparatively, the Taproot Assets protocol conforms to mainstream legitimate narratives and is a race worth long-term attention.

3) Taproot Assets, based on the Lightning Network’s HTLC off-chain contract, achieves similar layer 2, Rollup effects. The high-frequency transactions in a network of trusted Taproot addresses are equivalent to layer 2 batch transactions, and timely settlement on the mainnet based on hash time locks is equivalent to updating states. Although the Bitcoin mainnet only provides asset settlement, at best, it can be considered a limited DA layer. However, this “scaling” method appears to have solid technological logic and practicality.

The only possible complaint is that it’s developing too slowly. But if we consider the hype and emergence of the Ordinals protocol to Brc20, it took 5 months. Similarly, we should give Taproot Assets some time to accumulate energy.

4) I’ve seen several early-stage projects in the direction of “scaling” Bitcoin, such as Swaps based on the RGB protocol, layer 2 expansion based on the limited DAs of Ordinals, and some sidechain solutions. Overall, fundraising has not been smooth. On the one hand, VCs are mostly familiar with the narrative logic of projects on Ethereum and still hold limited doubts about the technical expansion capabilities of Bitcoin, requiring time to research and learn. On the other hand, the “scaling” narrative for Bitcoin is currently heavily fragmented, with developers of Ordinals, RGB, and Lightning Network seemingly excluding each other.

These developers need to converge on a mainstream narrative, just as Ethereum plasma, validium, and other technologies ultimately converge on rollups. As for the ultimate scalability solution for Bitcoin, I personally believe that it is likely to find its breakthrough in the direction of Taproot Assets.

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