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one in recent announcement, best in slotsThe infrastructure company is upgrading BRC-20s to power some of the most popular Bitcoin applications and wallets like Xveres and Liquidium.
Dubbed BRC2.0, it is expected to go live on the Bitcoin testnet in Q1 of 2025, aiming to bring “smart contracts” to BRC-20s, enabling them to compete with Bitcoin sidechain designs.
In short, the “BRC20 Programmable Module” is designed to “unlock infinite new use cases for native assets on Bitcoin – including seamless DeFi, RWAS, DaoS, stablecoins, and more – using the Multisig Bridge.” Or rely on L2.”
After many years in space, we can all agree that we’ve heard promises like this before. However, metaprotocols have a distinct advantage: they are completely on-chain, rather than relying on completely separate chains with new trust assumptions. Sure, metaprotocols may not be the best way to decentralize the token economy on Bitcoin, but they are a start.
The runs suffered from extremely high expectations prior to their launch, and this is an opportunity for BRC to make a comeback. No matter your stance on tokenization on Bitcoin, competition between different standards will ultimately bring greater efficiency and reduce on-chain bloat—something we can all agree is desirable.
The real question is: For regular Bitcoiners who use Bitcoin purely as a monetary network, do we really need to go through this again? On-chain congestion, useless pump-and-dump schemes, skyrocketing fees…
My answer is: absolutely!
The mempool has been “dead” for the better part of the last six months.
First of all, as Bitcoiners, we are supposed to support free markets. Additional fee-paying users are literally the best possible outcome for Bitcoin’s survival. Miners are making another halving right now, and the only way to keep mining profitable is to stop centralization in the hands of subsidized actors (be it government or financial markets—yes, issuing unlimited loans to buy machines is what miners will do forever. Will not work).
For reference, according to spicySolana validators experienced a record influx of over 100,000 Sol worth approximately $25.8 million in fees and tips due to intense trading activity of Trump and Melania tokens.
Second, Pandora’s box has already been opened. Tokens on Bitcoin are here to stay. If users desire additional programmability, who has the right to prevent it? (Aside from the pro-censorship thinkbowise, of course.)
As Bitcoin’s ecosystem evolves, the introduction of the BRC-20 upgrade presents a compelling case for why it could eclipse the run token standard. There are several reasons here:
- The primary attraction of BRC2.0 lies in its promise to increase efficiency. With smart contract functionality, BRC-2.0 tokens can handle complex operations directly on the Bitcoin blockchain, potentially reducing the need for additional layers or sidechains. This can lead to more compact transactions, reducing on-chain bloat, a problem that has been criticized due to their initial promotion and subsequent congestion. This efficiency could be a game-changer for Bitcoin’s scalability, offering a streamlined approach to tokenization without changing the security or decentralization of the core protocol.
- BRC2.0 is designed to integrate with the existing Bitcoin infrastructure. Thanks to collaborations with the likes of Layer 1 Foundation, it can improve user experience and interactivity. Unlike RUN, which faced challenges in user adoption due to complex mining processes and poor UX, BRC2.0 aims to provide a more user-friendly interface for token creation and interaction. This could lead to wider acceptance and usage, making Bitcoin a more attractive platform for developers and users.
My default position on anything new related to Bitcoin is always caution. We’ll have to wait for the actual specifics of this new protocol to be revealed, but I’m excited about the potential for more efficient DeFi use cases on Bitcoin – not just on lesser chains.
If you’re still skeptical, I’ll leave you with this question: If tokens are immutable on Bitcoin, what’s the bad thing?
- Metaprotocols using Bitcoin’s block space in exchange for fees, without changing the rules of the network?
- Or Bitcoiners competing chains to access the same token markets, in order to centralize their hard-earned Bitcoins?
As a Bitcoin Maxi, I want all the fees. I want all users. The Bitcoin maxis should be the fee revenue maxis, as long as the core ethos of the underlying network remains unchanged (given the feline malarkeys).
my tl; Dr.
- Wait and see what BRC2.0 has to offer. Will it actually become programmable in a way that is safe enough for Bitcoiners?
- If BRCS makes a real comeback, the run may become irrelevant, especially with better UX.
- Let miners rejoice with Dezeen fees.
- Tokens on Bitcoin without changing the rules are better than tokens on Bitcoin that require new opcodes or changed rules.
- Grateful for all the Gigabrain devs building Bitcoin apps instead of Vaporware Chain.
This article is a TakeThe opinions expressed are solely those of the author and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.
The articles I write may discuss topics or companies that are part of my firm’s investment portfolio (UTXO managementThe views expressed are solely my own and do not represent the opinions of my employer or its affiliates. I have not received any financial compensation for taking these. Readers should not consider this content as financial advice or an endorsement of any particular company or investment. Always do your own research before making financial decisions.
