Many people I talk to feel like there's Bitcoin and Ethereum and that's all. The issue with this thinking is you're saying that one blockchain would be able to handle all transactions forever. The amount of data would be massive and simply kick out your hobby style miners, it would mean billions of transactions per second would be needed and all of it would have to be secure and robust with low enough fees that people would be ok with using it in the first place.

To me we are no were near that ever happening at least with the current infrastructure and computing power we have. Now many with faster and larger hard drives becoming more common place it could be an options but it's just too much at the moment for one blockchain to do it all.

Instead what we have are many blockchains that do things well and not so well.

For example...

Bitcoin is more a store of value and the devs have said that's their core focus. Security, changing little and it being a store of value.

While Ethereum was mainly about faster transactions than bitcoin and dawn of layer 2 tokens, NFTs and other asset classes.

Hive would mainly be focused around decentralization and more of a social rewards connection.

Wax for example has mainly focused on NFT system games and that's their niche.

Business Niches

To me a blockchain at least most of them are like a business. You now have to market your blockchain, build products people want to use on your blockchain and have some key components such as fees, speed and ease of use.

A blockchain now has MUCH competition and the days of simply saying your faster than another blockchain or have low to zero fees mines little as well if you don't have the products behind it all to back it up. This is where development becomes one of the most critical components of a blockchain.

Bitcoin Expands To Layer 2's

Bitcoin is starting to get hit heavy and boy do I mean HEAVY!

With the recent advancement in terms of two new systems that have been found for bitcoin. The first being Bitcoin ordinals which allowed for a way to embed data on to the bitcoin blockchain for NTFs for example it also recently found another new advancement called Runes which I went over in detail on my other article on InLeo called Bitcoin Runes what are they?.

This constant new embedding into the blockchain is causing massive fees to happen to the bitcoin blockchain. In fact fees on bitcoin are currently at $13.42 per transaction but was at over $28 per transaction yesterday. These fees are only set to remain high or get worse as more and more embedded injections happen.

Now the idea of a layer 2 scaling solution for bitcoin is that it would group the transactions together to be broadcast on to the network instead of a one time hit like we are currently seeing. So that $28 fee could continue 10 or 100 actions within it brining costs down to $2.80 or $0.28 per transaction. Still a little high when you compare it to other options but a little more reasonable.

The first real move we saw in this was the Lightning network. But there's more now such as Stacks, Rootstock and Liquid of which only Rootstock has EVM capabilities.

I believe as long as fees remain high which they most likely will for Bitcoin as its not on their roadmap to really change it at all (Which is a good thing IMO) but unlike Ethereum I don't believe any real core changes will happen to the Bitcoin blockchain which means it should still remain strong through these layer two solutions being added.

What are you thoughts on new layer two solutions for Bitcoin?

Posted Using InLeo Alpha