At the end of the article the day before yesterday, I wrote the following paragraph:
"The crypto ecosystem cannot always rely on Bitcoin. In the future, for the crypto ecosystem to fundamentally change our lives, there must be real application innovations and new business models."
Additionally, I also wrote:
"It is very regrettable that the Bitcoin ecosystem has almost stalled in application innovation after protocol innovation."
Today's article is a continuation of my thoughts on the two paragraphs above.
Although it is still difficult for us to judge when the crypto ecosystem will have innovations that can truly change our lives, I have been paying close attention to this progress and gradually feel that this pattern can still be discovered from some details and signs.
In order to avoid bringing personal biases into this thinking, I try to reverse this question:
After years of practice and exploration, is it possible to judge which ecosystem is least likely to experience application innovation?
Following this line of thought, I am starting to have some concerns about the Bitcoin ecosystem.
In this bear market, we have seen a vigorous wave of protocol innovations in the Bitcoin ecosystem, witnessing a large number of new assets and concepts generated from these protocol innovations.
Now looking back at these newly emerging protocols, assets, and concepts, I believe that they essentially still have not deviated from the path opened up by early Bitcoin explorers, which is innovation based on Bitcoin's on-chain storage, or in other words, they are still revolving around on-chain storage.
And once this innovation relying on on-chain storage ends, the application innovation in the Bitcoin ecosystem will come to an abrupt halt.
Although developers have proposed the layer-two expansion of Bitcoin and added powerful virtual machines on it, unfortunately:
Or the applications created using these functions are just a replica of Ethereum's applications;
Either everyone simply does not use these functions for application innovation.
Among them, especially the second point 'everyone does not use these features for application innovation' is a point that the Bitcoin ecosystem should be very vigilant and concerned about.
Why am I so concerned about the second point?
Because it reflects the subconscious positioning of ecological developers or communities towards a blockchain ecosystem. Once this subconscious is formed, it is very difficult to change.
Moreover, apart from asset issuance, can innovations relying on on-chain storage continuously promote the application innovation of crypto technology in other fields?
I don't think so.
Otherwise, there wouldn't be an Ethereum white paper.
Isn't what Ethereum is trying to do just to expand the core framework of Bitcoin, turning it from simple on-chain storage (or basic script functionality) into a Turing-complete on-chain computer?
Therefore, for the Bitcoin ecosystem to develop, there must be application innovations based on smart contract functions born, developed, and grown within its ecosystem.
Once we delve into this, there are several typical cases in this bear market that we should pay attention to.
Recently, MEME coins on Solana have been very popular, and a significant reason for this popularity is the emergence of the one-stop service MEME platform pump fun.
Although Pump fun cannot be considered a major innovation, it greatly integrates the entire process of MEME issuance and improves the efficiency of MEME issuance, which is a nice micro-innovation.
In addition to pump fun, a MEME coin called GOAT, operated and promoted by AI agents, has also appeared on Solana. The special significance of this token lies in combining AI applications with the Solana ecosystem.
These are relatively good application innovations on Solana since this bear market.
What about the Ethereum ecosystem?
I believe that two relatively good application innovations have appeared in this bear market:
One is Facaster, which is growing in the social field;
The other is AI agent-based applications, such as Aether on Base and the platform Virtual that provides services for AI agents.
Did these applications use any brand new blockchain technology?
No.
They are merely combinations with other applications or integrations of existing tools and processes, more about innovations in application models.
Can the existing Bitcoin ecosystem provide the technology needed for such innovation?
Of course, it can.
The layer-two expansions of Bitcoin can now technically support such model innovations.
But no one does this.
Or when people initially came up with such ideas, they did not consider implementing them on Bitcoin and its layer-two expansions, but still considered implementing them on smart contract public chains.
This either means that no one in the Bitcoin ecosystem has such ideas;
Either that means when people have such ideas, they subconsciously do not consider Bitcoin.
For many years, we have been emphasizing that the infrastructure of Bitcoin is insufficient and its functionality is not strong, so one team after another in the Bitcoin ecosystem has tirelessly proposed new layer-two expansions and new solutions.
In fact, although the infrastructure of Bitcoin is still not ideal in terms of security, its functionality is already sufficient, fully supporting smart contracts just like Ethereum.
However, under such circumstances, some seemingly interesting small innovations and small experiments have still not occurred in the Bitcoin ecosystem.
Can this indicate some signs?
If we think further: in the future, when people have new ideas and new thoughts, will they still not consider Bitcoin and instead prefer existing smart contract public chains?
The innovations mentioned above are still just small innovations from some small teams or even individuals.
Besides them, we also know that many large teams like Sony, exchanges, Bored Apes, Uniswap, etc., are building their own layer-two expansions based on Ethereum. In this case, when these large teams want to innovate, will they choose the Ethereum layer-two expansions they built themselves or the Bitcoin ecosystem?
I think the answer is self-evident.
If individuals, small teams, large companies, and institutions all default to choosing non-Bitcoin ecosystems for application innovation, we have to ask this question:
Where are the application innovation teams in the Bitcoin ecosystem?
Or when you, I, and others have a small idea in the application field that requires the use of smart contract functions, will you, I, and others consider existing smart contract public chains or think about Bitcoin's layer-two expansions?
What impresses me deeply is: when the innovations in the Bitcoin ecosystem began to show signs during this bear market, the entire ecosystem's followers cheered: Bitcoin is starting to have an application ecosystem, it is no longer just 'digital gold', but can become a platform for building applications like Ethereum. This makes one unconsciously raise Bitcoin's upper limit to an exciting position.
However, once Bitcoin loses the support and development of an application ecosystem and reverts to being merely 'digital gold', can its upper limit still be raised to that coveted position?
Next Saturday, November 9th at 8 PM, we will conduct an online communication in the Twitter space.
The link to the space is: https://x.com/i/spaces/1vOxwrOlEAWJB
