Bitcoin Script appears to be severely undervalued.
Following the discharge of the Ordinals Protocol and BitVM whitepaper in 2023, ideas about what is feasible for Bitcoin’s base layer are shifting, and it’s clear that Bitcoin is now absorbing the wants of different blockchains within the broader cryptocurrency ecosystem.
In fact, builders have been keen so as to add extra options to Bitcoin because the starting of the protocol’s 15-year historical past. From early sidechains like Liquid and Rootstock to future L2, Bitcoin Journal has at all times coated legit scaling plans.
Nevertheless, a brand new wave of imitators search to take advantage of these developments to advertise arbitrary crypto tokens. Amid the Bitcoin L2 gold rush, the Bitcoin Journal editorial board felt it was essential to make clear its stance on L2 protection.
To qualify for protection, Bitcoin L2 should:
- Utilizing Bitcoin as its native asset: L2 should be designed from the bottom up to make use of Bitcoin as its main token or unit of account, in addition to the mechanism for paying charges into the system. If it has a token, it should be backed by Bitcoin.
- Use Bitcoin because the settlement mechanism to execute transactions: Customers of L2 should be capable to exit the system by means of a mechanism that returns unilateral management of their funds at Degree 1.
- Demonstrating purposeful dependence on Bitcoin: If Bitcoin experiences a whole failure and the system in query stays operational, our place is that the system will not be Layer 2 of Bitcoin.
Protocols constructed on Bitcoin that don’t fall into the Layer 2 class however should qualify for protection embody:
- Meta-Protocol: Methods like Counterparty (XCP) or Ordinals are protocols outdoors the scope of the Bitcoin protocol that exist and run on Bitcoin Layer 1 however do not need their very own impartial blockchain. Bitcoin Journal has traditionally reported on information and occasions associated to such protocols and can proceed to take action.
- “Parasite” layer: These programs depend on Bitcoin to exist and can’t perform independently with out Bitcoin, however don’t meet the opposite standards required to be thought-about Layer 2. Bitcoin Journal doesn’t at the moment cowl these protocols.
This coverage clarification doesn’t apply to our stablecoin or token protection choices.
Moreover, it applies solely to BitcoinMagazine.com and its print publications and doesn’t symbolize the insurance policies applied by The Bitcoin Convention, Uncommon BTC or UTXO Administration, an institutional fund owned and operated by BTC Inc and which can have publicity to Bitcoin funding. L2s.
