I don't know when people started calling Bitcoin - digital gold.
I think most people have forgotten Bitcoin's original vision - a decentralized electronic payment system. This vision was outlined in the white paper released in 2008 (Bitcoin: A Peer-to-Peer Electronic Cash System). The main goals in the white paper include:
Decentralization: Bitcoin does not rely on any central authority but rather verifies and records transactions through a decentralized network (i.e., blockchain). Each node (computer) participates in maintaining the security and integrity of the entire network.
No need for trusted intermediaries: Traditional financial systems rely on intermediaries such as banks and payment platforms to ensure the validity and security of transactions. Bitcoin eliminates the intermediary role through cryptographic technology and consensus mechanisms, allowing participants to trust the technology system directly rather than traditional institutions.
Low-cost, high-efficiency payment system: Bitcoin allows users to make almost instantaneous payments globally without paying high bank fees. Especially in cross-border payments and remittances, Bitcoin has advantages over traditional bank transfers.
Privacy protection: Bitcoin transactions are publicly transparent, but the identities of the parties involved are anonymous. The security of transactions is ensured by cryptographic technology, thus protecting users' privacy.
Against currency inflation: The total supply of Bitcoin is limited to a maximum of 21 million coins. This design aims to prevent currency devaluation and inflation, avoiding the currency devaluation caused by excessive money printing in traditional currency systems.
So why hasn't Bitcoin succeeded? The author believes there are two factors.
Firstly, the DeFi summer represented by Ethereum, we must acknowledge Ethereum's scalability and the success of its smart contracts.
However, this seems to lead us down another path, as if we no longer need Bitcoin to develop an electronic payment system. Ethereum's pursuit of becoming a 'world computer,' strictly following the principle of large blocks, and the mindset of 'everything on-chain' have overburdened Ethereum's base layer, forcing it to shift from proof of work (PoW) to proof of stake (PoS). This attempt undermined the principle of decentralization and raised concerns about its effectiveness.
Secondly, the block size of Bitcoin itself limits the number of transactions that can be processed in a given time. As the network grows, this limitation leads to longer confirmation times and higher transaction fees, reducing Bitcoin's efficiency in handling large transaction volumes. Compared to other blockchains, Bitcoin's script language currently lacks the flexibility and expressiveness required for developing complex smart contracts, aside from value transfer.
To address these limitations, various Layer 2 (L2) solutions have been proposed, such as payment channels, sidechains, and Rollups. Most of them aim to scale Bitcoin by processing transactions off-chain, attempting to improve transaction throughput without compromising the security of the base layer.
Among them, Nervos Network adopts a layered architecture, including an L1 blockchain that can be scaled through payment channels and RGB++ (Common Knowledge Base, abbreviated as$CKB ).
As a base layer public chain, CKB can be scaled through payment channels, such as the payment channel framework Perun developed by Polycrypt. By processing transactions off-chain and settling on-chain, these payment channels can support various applications ranging from micro-payments to payment gateways, thereby improving CKB's performance.
Perun leverages CKB's Cell model, where Cells carry capacity, Lock Script, Type Script, and data to manage the channel's state. One of the implementations of the channel (PerunLockScript) can manage access permissions for real-time Cells, while another implementation (PerunTypeScript) can handle the validation logic for state transitions. The transitions from funding the channel to closing it are all managed automatically.
Currently, Perun is still in testing and has not yet launched on the CKB mainnet. Nervos core developers are also working to connect CKB to Bitcoin's Lightning Network, enabling users to exchange BTC and CKB without relying on third parties.
In the near future, the Bitcoin ecosystem will realize its due value. Of course, many idealists will continue to develop more L2s. I still believe that these L2s on CKB will guide Bitcoin back to its original vision - the electronic payment system.
