In_script_ion Or L2: Bitcoin Ecosystem Development Decision

2023-12-21, 06:58

[//]:content-type-MARKDOWN-DONOT-DELETE
![](https://gimg2.gateimg.com/image/article/1692587449analysis.jpeg)
## [TL；DR]: 
<a href="/th/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> In_script_ion is a new method of writing arbitrary data on the Bitcoin blockchain. In_script_ions such as ORDI and SATS have sparked a wave of related infrastructure and caused spillover effects on other public chain in_script_ions.

The two tracks of In_script_ion and L2 not only compete in technology and philosophy, but also rely on each other to promote the value discovery of Bitcoin. In the future, they will carry more use cases and further unleash the charm and value of the Bitcoin network.

## Introduction
With the launch of the Bitcoin In_script_ion feature, more and more users are starting to use Bitcoin for NFT transactions, metadata storage, and other applications. Various L2 projects based on Bitcoin are also beginning to re-enter the market.

However, issues such as high network transaction fees and the slow settlement speed of Bitcoin are becoming increasingly prominent. This has once again sparked discussions in the market regarding the development plan of the Bitcoin ecosystem.

In the past, various asset issuance and expansion plans emerged around the performance issues of Bitcoin, including increasing blockspace, sidechains, lightning networks, and so on. However, these solutions were not widely adopted due to the fundamentalist pursuit of the Bitcoin community.

Nowadays, with the increasing demand for in_script_ions trading, debates over the ecosystem development direction of Bitcoin have begun to surface: whether to continue developing related asset agreements around in_script_ions or to build an expanded Layer2 ecosystem.

The article will provide a detailed discussion of these two directions for the benefit of readers.
 
## Bitcoin In_script_ion: Enjoy A Vogue These Days
Bitcoin In_script_ion is a new method of writing arbitrary data on the Bitcoin blockchain. It utilizes the P2TR (Pay-to-Taproot) _script_ type introduced in the Bitcoin Taproot upgrade. The P2TR _script_ allows storing arbitrary data using the output of Bitcoin transactions.

Bitcoin in_script_ions can be used for various purposes, including:

-Creating non-fungible tokens (NFTs): NFTs are a unique and scarce digital asset. Bitcoin in_script_ions can be used to create NFTs to represent artworks, collectibles, in-game items, and more.

-Storage metadata: Bitcoin in_script_ions can be used to store metadata, such as image titles, authors, copyright information, etc. This can make image traceability and management easier.

-Implementing complex logic: Bitcoin in_script_ions can be used to implement complex logic, such as smart contracts. This can bring new application possibilities for Bitcoin blockchain.

It is precisely based on the following advantages that Bitcoin In_script_ion has sparked a market frenzy this year.

-Decentralization: Bitcoin in_script_ions are stored on the Bitcoin blockchain, thus possessing the characteristic of decentralization.

-Security: Bitcoin blockchain has extremely high security, so Bitcoin in_script_ions also have high security.

-Scalability: Bitcoin in_script_ions are not limited by block size, therefore they have good scalability.
 ![](https://gimg2.gateimg.com/image/article/1703141737img_v3_026b_074250c9-ccf1-4c19-9431-a3fe34da5eix.jpg)
Source: Gate.io
 
We have previously written several articles to introduce the market situation of in_script_ions represented by ORDI, SATS, and RATS. We will not provide detailed explanations of specific in_script_ions here.

As the popularity of the in_script_ions market spreads, many developers have also proposed many in_script_ion protocols based on the Bitcoin network, using various technological means to meet the requirements of high-efficiency and low-cost in_script_ions.
 
## Nostr Assets
NostrAssets is an open-source decentralized protocol aimed at seamlessly integrating Taprot assets and Bitcoin into the Nostr ecosystem.

It enables users to use Nostr's public and private keys for various financial activities, sending, receiving, and trading digital assets; It is a permissionless and trustless relay network that combines the functionality of Bitcoin in_script_ions (Taproot) with digital asset management.

Presently, the lottery activity for the second stage of NOSTR's fair casting has begun. As test tokens invested in the asset market, Treat and Trick have already generated over 20 times returns, and Gate.io will continue to keep an eye on the progress of the project.

## Atomicals
The Atomicals protocol is a simple and flexible protocol used to create, trade, and update digital objects on the blockchain of UTXO models such as Bitcoin.

The Atomicals protocol is more comprehensive in functionality compared to the well-known Ordinals protocol. It supports various types of digital objects such as tokens, NFTs, domains, containers, etc., providing developers and users with more flexible choices. Since its launch, the Atomicals protocol has attracted numerous developers and users, and has achieved rapid development, with casting volumes reaching tens of thousands.

## Trac
 Trac is an important decentralized metaprotocol in the Bitcoin ecosystem, providing necessary tools for developers using Ordinals. The emergence of Trac solves the problem of high centralization in existing metaprotocol trackers, which is consistent with the decentralized nature of cryptocurrencies such as Bitcoin. Trac provides a decentralized network that allows anyone to connect, utilize, and profit from it.
 
Trac has established partnerships with multiple projects, including Bitmap and InscribedHandles. In addition, Trac actively collaborates with individual developers interested in implementing its technology. These partnerships will contribute to the wider application of Trac in the Bitcoin ecosystem.

Currently, Gate.io has launched this token.

In addition to the infrastructure related to the in_script_ions above, there are many other in_script_ions and agreements exploring this market, which we have discussed earlier. There is no need to elaborate on it here.
 
## Bitcoin L2: Get A New Lease of Life
The Bitcoin L2 scheme is a second-layer network built outside the Bitcoin main chain, which can improve the scalability of Bitcoin through various methods, including Lightning Network, sidechain technology, BitVM, etc.

Driven by the trend of in_script_ions, the L2 scheme has recently begun to be favored by market funds. For example, veteran Bitcoin L2 projects such as STX and RIF saw their highest increases of 90% and 60% respectively in December.

Generally speaking, there are two main ideas for the Bitcoin scalability solution: on-chain scalability and off-chain scalability.

On-chain scalability refers to directly expanding on the Bitcoin main chain, such as changing block size or data structure. But this method is technically difficult and can lead to consensus fragmentation, so it is no longer mainstream today.

Off-chain scalability refers to the establishment of a second layer trading network outside the Bitcoin main chain, such as lightning networks, sidechains, etc. This method can transfer some transactions off the chain, thereby improving the processing capacity of the main chain.

Presently, there are several types of off chain expansion solutions:

State channels, such as lightning networks, can transfer high-frequency transactions off the chain, improving transaction throughput.

Side chains, such as Liquid, <a href="/th/price/stacks-stx" target="_blank" class="blog_inner_link">Stacks</a>, and Rootstock, can transfer Bitcoin assets to the side chain, improving scalability and flexibility.

Other areas, such as Rollup technology and BitVM for fraud-proof, have shown slightly slower progress in this area.

We have also written several articles in our blog introducing Lightning Network, BitVM, etc. Here, we will briefly introduce the progress of other projects.

##  Stacks
Stacks is an old L2 protocol launched in 2018, with its core technology being the PoW-to-Proof-of-Transfer (PoW-to-PoX) consensus mechanism. The PoW-to-PoX mechanism combines the PoW consensus mechanism of Bitcoin with the PoX consensus mechanism to achieve the security and decentralization of Bitcoin, while improving the scalability of smart contracts.
![](https://gimg2.gateimg.com/image/article/1703141840img_v3_026b_f63536b5-97ba-4619-b1b7-1b0b373200ix.jpg)
Source: Stacks official website
 
Since its launch, Stacks has been criticized by the Bitcoin community for deviating from the value of Bitcoin, but with the arrival of Nakamoto upgrades, this situation will be effectively alleviated.

Nakamoto's upgrade will quickly enable Stacks to be written to Bitcoin in a fully decentralized manner, allowing developers to build smart contracts on Bitcoin in a fully decentralized manner. In addition, it will significantly shorten the execution time, making Stacks a more competitive smart contract platform.

The protocol token STX is supported by both spot and perpetual contract products at Gate.io.
 
## Rootstock
Rootstock is the first EVM compatible sidechain on the Bitcoin network, developed and launched by IOV Labs in January 2018. Its core technology is Rootstock VM (RVM).
 ![](https://gimg2.gateimg.com/image/article/1703141865img_v3_026b_98a55b04-8dfe-488a-a34c-d10665fabbix.jpg)
Source: Rootstock official website
 
RVM is a Bitcoin based virtual machine that can run smart contracts written in Solidity language. The design goal of RVM is to be compatible with the security and decentralization of Bitcoin, while improving the scalability of smart contracts.

According to the data displayed on Rootstock's official website, its ecosystem lockdown TVL currently reaches $300M, with over 100 deployment projects covering multiple fields such as Swap, cross-chain bridges, lending, oracle machines, payment channels, wallets, etc. It is one of the high-quality protocols with a relatively complete Bitcoin L2 ecosystem.
 
## To Sum Up
The expansion of the Bitcoin In_script_ion ecosystem is unstoppable, and the L2 network of Bitcoin will also experience vigorous development in the future. The past year indicates that in the Bitcoin bull market, <a href="/th/price/ethereum-eth" target="_blank" class="blog_inner_link">Ethereum</a> and EVM chains may lose their dominant position, while the Bitcoin ecosystem is expected to become the center of the new generation of crypto finance.

With the improvement of various technological facilities and the participation of more users, the Bitcoin In_script_ion and L2 project will also be launched in large numbers in 2024, further enriching the Bitcoin ecosystem.

Analogous to the ecosystem evolution path of the previous bull market, the DeFi Summer of 2020 originated from Ethereum and created many wealth effects through new models such as liquidity mining.

Subsequently, the infrastructure boom opened up new tracks such as NFT and GameFi. The in_script_ion originated from Bitcoin and went through early on chain pioneering, Unisat launch, and CEX entry, completing early market preaching and capital accumulation.

The further popularity of Bitcoin in_script_ions is due to the global spread of the Chinese world, which has driven the development of infrastructure and even L2 in_script_ions on Bitcoin.

Furthermore, the two tracks of In_script_ion and L2 not only compete in technology and philosophy, but also rely on each other to promote the value discovery of Bitcoin. In the future, there will be a trend of dual dominance.

Although there are still many controversies, the Bitcoin ecosystem is taking off unstoppably. Whether it is in_script_ions/runes or L2 scalability solutions, these projects will face fierce competition, and the production of a large number of projects will undoubtedly carry more use cases and further unleash the charm and value of the Bitcoin network.

<div class="blog-details-info">
<div>Author:**Carl Y.**, Gate.io Researcher
<div>Translator:Joy Z.
<div class="info-tips">\*This article represents only the views of the researcher and does not constitute any investment suggestions.
<div>\*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.
</div>

แชร์