LD Capital Vitalik has outlined the future roadmap of Bitcoin for us.

LD Capital's Vitalik Unveils a Roadmap for the Future of Bitcoin

Author: Bob Bodily, PhD; Source: Author’s Twitter @BobBodily; Translation: LD Capital

Vitalik paints a future roadmap for Bitcoin

Vitalik has just released a new blog post on different types of Layer 2 (L2) on Ethereum, and I believe it is closely related to Bitcoin.

Here is my explanation.

Heterogeneity of L2 (L2 gradually differentiating)

Vitalik believes that we are gradually seeing Layer 2 (L2) on Ethereum becoming more heterogeneous, which means that there is no longer a single type of L2, but various types of L2 with different trade-offs.

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The blockchain trilemma (a term coined by Vitalik himself) is most appropriate in explaining the trade-offs mentioned here, as it points out the three key aspects of blockchain technology: security, scalability, and decentralization.

Some L2 have the following characteristics:

1. Slower, higher cost, more secure.

2. Faster, lower cost, but with more trust assumptions.

3. Intermediate level in terms of speed, cost, and security.

Examples

In some cases, these L2 become Layer 2 (L2) on Layer 1 (L1) (e.g., Polygon as an Ethereum sidechain gradually transitioning to Polygon 2.0, becoming an L2 Rollup on Ethereum).

In some cases, they aim to decentralize certain parts of their technology stack from a fully centralized system.

In other cases, they aim to achieve decentralization without necessarily requiring high security for gaming/social media platforms.

In each case, you need to make different trade-offs in the blockchain trilemma, which means you need different solutions (or L2) to accomplish different tasks.

Three types of L2 (more like gradients)

In his post, Vitalik talks about three main types of Layer 2 (L2):

1. Rollup

2. Validium

3. Disconnected systems

Rollup

Rollups are zero-knowledge Rollups, where you can always trustlessly bring assets back to L1.

Computation is verified through fraud proofs or validity proofs, and the entire data is stored on L1. Currently, Bitcoin does not have zk Rollups like this because Bitcoin cannot verify validity proofs, but there are many projects on Ethereum working to achieve this goal.

These usually have higher costs as they require full data availability on L1 and need to generate expensive large proofs.

Validium

Validium is a further development from Rollup. In Validium, the data is stored off-chain, and only proofs are stored on L1, which means Validium has much lower costs compared to Rollup, but it introduces additional trust assumptions regarding off-chain data storage.

In the scenario of Validium, if off-chain data is lost, your assets may also be lost (not stolen).

In the Validium model, the main cost is proof cost, although data storage cost is reduced, proof generation cost is retained.

Disconnected

A Disconnected Layer 2 is essentially a sidechain, where you have a completely independent blockchain or server, trust multiple signatures or a group of people to safeguard your tokens, and then enjoy all the benefits of sidechains (faster transaction speeds, lower fees, etc).

Layer 2 is a category

It is important to note that Vitalik points out L2 is a gradient, not a discrete classification. This means that an L2 may fall between Validium and Rollup, or between Disconnected L2 and Validium.

Another important aspect of L2 is its “connectivity” with L1. Vitalik breaks it down into two parts:

1. Security extracted from Ethereum

2. Security reading from Ethereum

These attributes also distribute within a continuous spectrum.

Lastly, he discusses the security spectrum, ranging from the security demanded on the left side of the diagram to scalability demanded on the right side.

So, what does this have to do with Bitcoin?

It is closely related to Bitcoin.

In Bitcoin, we have:

Ordinals, BRC-20, CounterLianGuairty, Stamps, SRC-20, Colored coins, ARC-20, Atomicals, TAP, PIPE, BRC-100, BRC-69, BRC-21, ORC-20, ORC-CASH, Runes, Runestone, BRC-721, Lightning Network, Taproot Assets, RGB, Omni, MVC, Libre, Chia, Babylon, Interlay, Liquid, Stacks, ICP, RSK, ETH, BitVM, Bitcoin Script, TapScript, DLCs, Drivechains, Sidechains, SLianGuaicechains, Spiderchains, Statechains, Softchains, Ark, Optimistic Rollups (similar), Sovereign rollups (developing), ZK-Rollups (prospective), etc.

Bitcoin has multiple interesting layers, which can be classified using Vitalik’s simple L2 framework, including a range from Rollup L2 to Validium L2 to Disconnected L2. You can extract security from L1 and read security from L1, whether you prioritize security or scalability.

All these Bitcoin layers have trade-offs (explained well with the blockchain trilemma), and it also explains why we may see many layers being built on Bitcoin in the future.

Summary

Vitalik just outlined the future roadmap of Bitcoin for us, and the future roadmap is a fascinating world of Layer 2 solutions, each making different trade-offs to support different use cases and collectively decentralizing the Bitcoin Layer 2 ecosystem.

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