Under the upsurge of Ordinals and BRC-20, take stock of the four directions of Bitcoin scalability development

Original title: "  Under the upsurge of Ordinals and BRC-20, take stock of the four directions of Bitcoin scalability  "

Original source: Top 4 Directions of Bitcoin Ecosystem Scalability

Original compilation : Gwei Research

The emergence of Ordinals NFT and BRC-20 tokens has once again pushed the scalability of the Bitcoin ecosystem to the forefront.

At present, the supporters of the Bitcoin ecology are divided into two factions: conservatives believe that Bitcoin must maintain its pure monetary nature, It is only used as a store of value and does not require other forms of scalability; radicals believe that Bitcoin needs to be expanded, and only in this way can it have more native application ecology and promote its large-scale and sustainable development.

The two parties seem to be unable to agree on each other's opinions, so is it possible to satisfy both conservatives and radicals at the same time? , and at the same time allow Bitcoin holders to choose freely according to their own needs?

Next, I will discuss the possibility of Bitcoin from four perspectives: scalability level, decentralization, ledger security, and implementation difficulty Four directions of scalability development, and discuss their development trends.

Non-upgradeable Scaling

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No-upgrade expansion refers to not changing the existing technical system of Bitcoin, only using Bitcoin Existing features to achieve specific types of scaling.

Representative technologies include RGB and Bitcoin Script. RGB is a scalable and encrypted smart contract system that can run directly on the Lightning Network, but all the data it generates exists outside the Bitcoin transaction (off-chain), which means the security of the entire ledger The security of the Bitcoin mainnet cannot be relied upon.

Ordinal is implemented using Bitcoin Script (Bitcoin Script) to add extra data and The smallest unit of Satoshis (Sats) is assigned a unique serial number. This approach offers only minor improvements to Bitcoin's scalability. There is currently a wave of hype around Bitcoin NFTs and BRC-20 tokens in the market, but the sustainability of their value remains to be seen.

In addition to the functions given to Sats by third parties, from the perspective of the Bitcoin main network, the data attached to various scripts are The meaningless garbled characters caused a waste of Bitcoin block space and transaction congestion, which also caused strong dissatisfaction among some Bitcoin community members.

In general, the non-upgradable expansion technology solution is decentralized, and does not require the support of the Bitcoin community in terms of implementation difficulty Overall consensus, but at the same time, RGB fails to rely on the consensus security of the Bitcoin mainnet, and the scalability of Bitcoin transactions through scripts is very limited.

Sidechain

The second method is a side chain, which creates a separate chain and links it to Bitcoin through a specific cross-chain technology mainnet.

It used to be a popular and relatively easy-to-implement Bitcoin expansion solution, mainly because sidechain projects could issue their own Tokens, as their value increases, can generate community and market interest. However, major players in such schemes have had some problems scaling Bitcoin.

Projects such as Liquid (BlockStream), Stacks and Rootstock map BTC to the side chain through a two-way cross-chain bridge, which is their common features, but there are also subtle differences.

Liquid is more like a Bitcoin alliance chain composed of large institutions, and the BTC mapping and conversion between the side chain and the main network requires the multi-signature agreement of these institutions.

Stacks is a Bitcoin sidechain technology that issues new tokens, and its PoX protocol is a method that allows miners to stake STX And then come to pledge the agreement of BTC. However, how the protocol achieves decentralized distribution remains to be studied.

Rootstock adopts the side chain technology of merged mining, and the cross-chain transmission of BTC is carried out by multiple signatures of multiple institutions Control (BTCrBTC).

However, the side chain nodes are not accessible to everyone, and the ledger consensus depends on the management of some centralized institutions, resulting in decentralization This may be the main reason why sidechain scaling solutions have been tried many times but have not yet achieved mass adoption.

Upgrade-based Scaling

Upgraded expansion refers to the need to upgrade the technical architecture or technical system of the Bitcoin network. A representative example is BIP-300/301 proposed by the LayerTwo Labs team. Its expansion concept is called Drivechain, which essentially uses Rollup to expand.

Currently, LayerTwo Labs' approach is to directly hard fork a PoW main chain with BIP-300/301. When the Bitcoin community reaches a consensus and approves this main chain, the Bitcoin main network will be upgraded to BIP300/301.

In general, LayerTwo Labs' solution can ensure the decentralization of Bitcoin and solve the expansion problem. However, its expansion and upgrade requires the consensus of the Bitcoin community, and under the current overall atmosphere of the community, it is extremely difficult to upgrade the Bitcoin mainnet.

One-way Transfer

Bitcoin's two-way transfer is a commonly used method in cross-chain and side-chain scenarios. The transfer-to-transfer expansion scheme was proposed by the Hacash community and the Hacash.com team. The principle is to irreversibly transfer Bitcoin to a new chain that is theoretically more decentralized and more mature in technology, and then adopts a multi-layered approach for scalability.

The first layer of Hacash can realize the one-way transfer of Bitcoin, and transfer the BTC on the Bitcoin chain to the Hacash chain . During the transfer process, the user's private key remains unchanged, and the same private key can be used to directly use Bitcoin on the Hacash chain, and the control of BTC has not been transferred to any other entity.

Based on the Hacash chain, there are Layer 1 and Layer 2 payment networks, and the Hacash.com team also proposed Layer 3 multi-chain scalability sexual infrastructure. Bitcoin can be used for instant payments at Layer 2 and for application scaling at Layer 3. The essence of Layer 2 is to use state channels for instant payments, and the essence of Layer 3 is to use multi-rollup and multi-rollup's customizable scalability methods. In general, the Hacash chain that accepts BTC one-way transfers still uses a pure PoW consensus mechanism, and anyone can run a full node.

On top of this, layers 2 and 3 address scalability issues. Anyone can choose to transfer their BTC to the Hacash mainnet, and it is up to each Bitcoin holder to decide whether they need scalability, and the implementation difficulty is relatively low compared to other solutions.

Summary

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There are four main ways to scale the Bitcoin ecosystem: no-upgrade scaling, sidechains, upgradeable scaling, and one-way transfers. Non-upgradable expansion cannot achieve strong scalability and ledger security at the same time. There is a problem of centralization in the side chain. It is difficult to implement upgraded expansion. One-way transfer is relatively good in the four evaluation dimensions, but it has not received widespread attention from the market. .

In the past decade, Bitcoin was created with the goal of a decentralized currency, the store of value has proven to be It works at its core, and theoretically doesn't need any extensions to make it happen. How to achieve scale while maintaining the ability to store value of Bitcoin, and even after digging out 21 million pieces, to achieve sustainable development in the future will undoubtedly be the main direction of Bitcoin's future development.

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