Zitcoin has been in development since December last year, and the project has finally taken shape, with a clearer direction. Now the ZTC L2 mainnet is online, and it is estimated that after POW (traditional mining machines can mine directly) is completed, the BTC Layer2 token: $ZTC will be issued.
The biggest highlight of Zitcoin after this update is that it has become a BTC Layer2 native Pow public chain, inheriting the fairness of Bitcoin, giving full play to the Pow mechanism, continuing the tradition of Bitcoin, and also has the fastest transaction speed and transaction processing capabilities of the current L2 public chain.
This is what the official said. Translated into human language, it means: Now BTC Layer2 is almost entirely based on the POS mechanism. Users have to stake to participate. Apart from providing funds, miners have nothing to do. This is very depressing, and is also the main reason why several BTC Layer2s that have been launched have failed, because there are not many loyal users. Zitcoin is different. It continues the Pow mechanism, allowing everyone to participate. If you have a mining machine, you can directly switch to a network to mine. If you don’t have a mining machine, you can also mine with a VPS. Moreover, the mining cycle is very long, which is equivalent to a long-term meal ticket.
The recent focus is: players with inscriptions can pledge the inscriptions ZTCY in advance and exchange them for $ZTC, and they can cash out immediately after $ZTC is listed (a benefit for old players).
This article mainly includes the following parts:
1. Does the market really need BTC Layer2?
2. How big is the market for BTC Layer2?
3. Classification of BTC Layer2 projects in the current market
4. What is ZTC and what are its advantages?
5. What stage has ZTC reached in its development?
6. What benefits can we get from ZTC?
1. Does the market really need BTC Layer2?
The revolutionary launch of the Ordinal protocol has made BTC Layer2 possible, allowing developers to develop on BTC just as they expand the ecosystem on ETH. In terms of technology, there are no longer any barriers to BTC Layer2.
BTC has been used as a payment function for more than ten years, but the activity on the chain is not very high. With the halving of BTC, the activity on the BTC chain will further decrease.
The lack of on-chain activity is actually harmful to Bitcoin.
Taking Bitcoin halving as an example, the current reward of 6.25 BTC per block will be reduced by half, which will directly lead to a significant reduction in miners' income. If the income is not enough to cover the expenses, the number of miners will be greatly reduced, the degree of decentralization will be reduced, and the vulnerability to attacks will increase accordingly.
There are only two solutions to avoid this:
The price of Bitcoin increases (even if the price of Bitcoin doubles, the block reward income will just be balanced with the current level);
Active BTC on-chain activities bring more transaction fees — and this has been verified by the Ordinals protocol and BRC20.
Obviously, the BTC network needs ecological empowerment. The increase of Dapps on the chain not only brings economic benefits to miners and makes up for the losses after halving, but also increases the number of full nodes and increases network security.
2. How big is the market for BTC Layer2?
The capital volume of Bitcoin has reached trillions, but the Bitcoin Layer2 market has not yet been activated.
1. Bitcoin Layer2 and Ethereum Layer2
For comparison, when Ethereum's market value was 200-300 billion, the total value of ERC-20 tokens was also 200-300 billion. BTC is a trillion-dollar market, but the total market value of BRC tokens is less than 10 billion. There is still 99 times of space between more than 10 billion and 1 trillion dollars. Although this 99 times cannot be filled in a short period of time, this is a potential market that no one can ignore.
Most Bitcoin Layer2 projects are just getting started, and there is no real leader yet. Currently, there are more than 100 projects working on the Bitcoin Layer2 track:
2. BTC Layer2s Valuation
Regarding Layer 2, there are a lot of industry-specific data, and the most successful one is ETH. Here is a rough example:
?Ethereum’s market cap is $400 billion, and Layer2s on Ethereum account for about 10% of that market cap, so the valuation is about $40 billion.
?Bitcoin’s market cap is $1.3 trillion, which means Bitcoin Layer 2 could have a market cap of $130 billion.
This is not just the author's fantasy. The Spartan Group drafted an article titled "Bitcoin Ecosystem: Opening the Curtain of the Trustless Financial Era" in December 2023, which mentioned: Bitcoin is no longer just a store of value or an asset, Bitcoin is realizing its significance as infrastructure in an expanding economy.
3. Classification of BTC Layer2 projects in the current market
The BTC Layer2 industry has been exploring and launched the concept of "Bitcoin layers" as early as 2018. This concept represents a key shift in the development of Bitcoin and solves its scalability challenges.
So far, “Bitcoin layers” have borrowed from Ethereum’s layered architecture and have formed a three-dimensional solution, covering Layer 2, Layer 3, Data (data layer), Application (application layer)…
Many developers are innovating on Bitcoin layers. These innovations have made many attempts to overcome the inherent limitations of BTC and introduced many features to the emerging Bitcoin layers.
According to incomplete statistics, by June 2024, more than 200 BTC Layer2s are being developed or are in preparation. Based on their different operating mechanisms, we divide BTC Layer2 into the following 6 types:
? The first type is Bitcoin test chain. The product of the Bitcoin expansion dispute, the expansion led to the most serious fork of BTC, and the birth of BCH (which forked out BSV again). After the fork, BTC CORE continued to maintain the BTC main network, but the network congestion caused by BTC small blocks really made users very rogue, which led to the subsequent Segregated Witness and Raiden Network.
? The second type is Rollup. It has the largest number and the most serious homogeneity. Most of them use modular methods to deploy EVM chains and become new rollups, and basically use the POS consensus mechanism.
This solution is used because the development threshold is low, the start-up is fast, and it can be completed in a few months, so a wave of development will occur.
? The third type is multi-signature cross-chain bridge + EVM. This type of project is basically the same as the second type, but it innovates in the verification method. Since it is still developed using modular components, many projects will first build a POS+EVM main network to develop the ecosystem first, and then slowly work on the subsequent technical sections.
This is the model that capital prefers: "make money first, then do things; make money while doing things."
?The fourth type is the BTC L2 solution based on Taproot. The main features are the introduction of the Schnorr signature algorithm + MAST contract + the latest BTC script technology. Each technology increases the privacy, scalability and composability of the blockchain. Currently, only BEVM is doing this.
?Fifth, focus on BTC staking. This type of solution is an improvement of the second and third solutions. Inspired by the success of Eigenlayer on EHT, the developers thought they could run it again on BTC.
The mechanism is also very simple, that is, to use BTC as a pledged asset in POS, and introduce a BTC re-pledge concept similar to Eigenlayer. For example, babylon. ZTC is a POS+POW model.
?The sixth type: UTXO+client verification.
Like the Bitcoin sidechain, the UTXO+ client verification solution has poor scalability and a high entry barrier, but it is more secure and decentralized, and can attract more miners to participate. Currently, few developers are working on this single model (Nervos is working on it), but if a few unicorns emerge, it is still very promising.
These six solutions all have their own advantages, but there are still various problems that have not been solved.
If there is a project that is compatible with "three" and "six", which can not only meet the scalability requirements and go online quickly, but also ensure better security and decentralization, miners can also enter the market seamlessly, while ensuring that the block speed is around 1 second, and the TPS can be among the top three in the entire network, then wouldn’t the prospects be much better?
4. What is ZTC and what are its advantages?
1. What is ZTC?
ZTC (Zitcoin) is a Layer 2 with the architecture of "multi-signature cross-chain bridge + EVM" and "UTXO + client verification". It adopts a dual GAS consumption model, which can not only help the BTC ecosystem, but also enable the native currency ZTC to achieve deflation.
In terms of the trade-off between decentralization and capital efficiency solutions, ZTC introduced a new token: $ztc, which adopts a hybrid consensus mechanism of POS and POW. By integrating the consensus algorithms of zero-knowledge proofs (ZKPs) and STARKs (ZK-SNARKs/ZK-STARKs), it improves transaction speed and efficiency (1s block), and achieves a balance between decentralization and capital efficiency. The ZTC public chain adopts a dual GAS model, and the V2 version adopts a BTC and ZTC dual GAS consumption model. Users can choose independently, which helps the BTC ecosystem and ZTC complete the deflation model.
In terms of the trade-off between capital efficiency (Scalability, verification efficiency) and security (Security), ZTC uses zkVM (zero-knowledge virtual machine) based on the Halo2 proof system to ensure the synchronization between Layer 2 status and the Bitcoin main network, and all Layer 2 status updates are verified by the zero-knowledge proof (ZKP) validator implemented by BitVM.
In tracking and managing all Layer 2 states, ZTC uses a unified UTXO (unspent transaction output) model. In addition, ZTC also introduces a trusted oracle mechanism to ensure that only inputs/outputs of lock/unlock scripts that comply with the Layer 2 protocol specification are allowed, thereby maintaining the security and stability of the system.
ZTC transfers most transactions to off-chain processing by introducing State Channels and Sidechains. This method can greatly reduce the burden on the main chain, thereby significantly increasing transaction speed and reducing transaction costs. ZTC will continue to optimize the consensus algorithm to ensure that the network can maintain efficient and stable operation even when transaction volume surges.
2. Basic Architecture of ZTC
As mentioned above, the current BTC Layer2 is divided into 6 types, most of which are developed using the single model of "multi-signature cross-chain bridge + EVM".
Most of them use modularized methods to deploy EVM and use the POS consensus mechanism to become new rollups. Some projects will innovate in the verification method, but generally they will first build a POS+EVM mainnet to develop the ecosystem first, and then slowly work on the subsequent technical sections.
This is the model that investors prefer: "earn money first, then do business; earn money while doing business." This solution is used because the development threshold is low and the start-up is fast, and it can be completed in a few months.
ZTC is based on the architecture of "multi-signature cross-chain bridge + EVM" and "UTXO + client verification". The UTXO + client verification solution has a high implementation threshold, better security, and a high degree of decentralization, which can attract more miners to participate.
ps: It is reported that ZTC has obtained US$5 million in financing.
The ZTC public chain plan is as follows:
ZTC V1 (sidechain version): During the launch of V1, the ZTC public chain will focus on the performance, security, and usability of the sidechain. Through continuous testing and optimization, it ensures that the sidechain can meet the needs of users and provide developers with rich development tools and API support.
ZTC V2 (UTXO client verification version): The launch of V2 will further enhance the performance and user experience of the ZTC public chain. Through UTXO client verification, users can trade faster and more securely and enjoy a smoother blockchain experience. At the same time, ZTC will continue to optimize and improve the UTXO client verification mechanism to ensure its stability and reliability in various scenarios.
The ZTC public chain is launched in phases, mainly to gradually verify and improve its blockchain technology and provide users and developers with a more mature and stable blockchain platform. Through the iteration and optimization of the two versions V1 and V2, ZTC will continue to promote the development and application of blockchain technology and contribute to the prosperity of the entire blockchain ecosystem.
3. What are the advantages of ZTC compared with other BTC Layer2?
ZTC has introduced many innovative mechanisms based on the Layer 2 solution, such as:
High-performance consensus algorithm can ensure the fastest block generation within 1 second;
Decentralized Oracle: ZTC’s decentralized oracle system ensures seamless integration of on-chain data and off-chain real-time information;
SWAP (Swap Protocol): ZTC supports the SWAP protocol, which allows users to seamlessly exchange assets on the chain without the involvement of a third-party intermediary.
UTXO Client-Side Validation: In subsequent versions of ZTC, the UTXO client-side validation mechanism will be introduced. This mechanism allows users to verify the validity of transactions locally, reducing dependence on centralized verification services and further improving the security and privacy of the system.
Dual GAS model: The ZTC public chain adopts a dual GAS model. The V2 version adopts the BTC and ZTC dual GAS consumption model. Users can choose independently, which helps the BTC ecosystem and ZTC to achieve deflation.
POS+POW Consensus Nodes: ZTC uses a hybrid consensus mechanism of POS and POW. POW ensures the security and decentralization of the network, while POS improves transaction speed and energy efficiency.
Withdrawal and force-withdrawal: In the POS stage, unlike other Layer 2, staking means locking the position. Any assets pledged in ZTC can be withdrawn at any time.
Here comes the key point. ZTC uses POS+POW consensus nodes, which means that any mining machine in reality can participate in mining without the need to configure other equipment.
4. ZTC Token Economy
Token name: ZTC
Total amount: 23.3 billion ZTC
ZTCY inscription exchange (10%): The initial 10% ZTC will be exchanged through ZTCY inscriptions;
Interactive Airdrop (5%): Through interactive airdrop activities, users can receive additional ZTC rewards.
POS+POW and ecological reward output (50%): The remaining 50% ZTC will be produced through POS and POW mechanism ecological rewards.
5. What stage has ZTC reached?
In addition to the public chain, ZTC is also preparing to build a basic ecosystem to attract more developers to deploy DAPP on the public chain and jointly build a prosperous ecosystem.
The basic functions that ZTC officially deploys or plans to deploy are: oracle, launch platform, cross-chain, DEX...
It is impossible to complete so many things at once. The current progress is as follows:
1. Completed
(1) ZTC Mainnet — Now online
(2) Oracle — Completed
(3) SWAP — Enabled, any token can be exchanged on the platform
(4) Staking — Already enabled (POS mining), staking can earn on-chain points, which can be exchanged for public chain tokens.
Three days after the staking function was launched, due to the “deposit and withdraw at any time” mechanism, the TVL has reached 761,500 US dollars without any media promotion of the project, relying entirely on community communication.
In addition to basic assets such as BTC, ETH, USDT/USDC/USDE, BNB, TRX, OP and ZTC, ZTC also supports memecoins such as DOGE, PEPE, ORDI, STAS, RATS, PIZZA, etc. In the future, runes and runes may also be staked.
You can get on-chain points (checkable at any time) by doing quality checks, and the points can be exchanged for public chain tokens.
2. Upcoming Activities and Features
(1) Social mission airdrop activities
(2) Token blind box: the official website currently has no real functions, and it is estimated to be similar to interactive tasks, which contains a set of points and some tokens;
(3) NFT, similar to the Genesis NFT (12 zodiac signs), is a qualification certificate that gives bonuses to tasks after holding it, and can also be traded on the NFT market. There are dozens of NFT series, each with 12 pieces.
(4) Launchpad — A platform for fair token sales built by the platform, with a built-in anti-rat trading mechanism, allowing everyone to obtain other token quotas on a fair basis.
(5) Node mining — can be deployed, traditional mining machines can be switched to mine, and the nodes can obtain an additional income of 1–2% of the total amount per day.
3. Off-chain work that the project owner may be doing
(1) Financing. ZTC has already laid a solid foundation technically. Now it only needs to launch community interaction and get more people in to get the flywheel going. Getting the community in requires some dividends, and the project owner may already be raising funds.
(2) The coin will be listed on an exchange. After the project announces the financing, it is expected that the next step will be listing on an exchange, which may take three months. By that time, we will have received the airdrops and mined the mines we wanted to mine.
6. How can we make money on ZTC?
The above introduces the environment and prospects of BTC Layer2, and analyzes the basic functions and technical advantages of ZTC. Finally, we should make a summary.
ZTC is still in its early stages. The platform coin $ZTC has not been issued yet and has not been listed on an exchange. This gives us many opportunities. The bonuses we can participate in are:
(1) Inscription $ZTCY exchange for $ZTC tokens (recent focus)
$ZTCY is an inscription token launched by ZTC during the testnet stage. The mint price was 80U at that time, and the highest price was raised to 10 times. Currently, 90% of the total amount of $ZTCY has been destroyed.
Since $ZTCY can be exchanged for the platform currency $ZTC, there is a lot of room for operation. We can scan the $ZTCY inscription when the $ZTCY market has a large drop to prepare for the platform currency ZTC in the later stage.
(2) Staking Mining
At this stage, you can get points by staking assets on the platform, and the points can be exchanged for $ZTC airdrops later (points are on-chain points, data can be checked)
Supported pledge assets include: BTC, ETH, USDT/USDC/USDE, BNB, TRX, OP and ZTC, as well as memecoins such as DOGE, PEPE, ORDI, STAS, RATS, PIZZA, etc.
(3) Node mining (officially still under testing, expected to be open soon)
Traditional mining machines can be switched to mine, and the nodes can earn an additional 1-2% of the total daily income.
If you don’t have a mining machine, you can use a VPS to mine. This is equivalent to zero-cost mining, with a larger allocation and high expected returns, but a long cycle.
(4) Pay attention to community activities
ZTC is in its early stages, no tokens have been issued yet, and the community is small. It is estimated that there will be many community airdrops and other interactions, and we can all participate.
That’s all for today;
ZTC official website: https://zitcoin.io/
ZTC blockchain browser: https://ztcscan.com/
