After Bitcoin core developer Luke publicly issued a message boycotting inscription on December 6, Bitcoin godfather Adam Back recently put forward a different view. He believes that one should not try to kill Bitcoin Inscription, because issuing assets on the Bitcoin chain brings huge benefits to Bitcoin miners and is valuable to the long-term stable development of Bitcoin, while the network congestion problem caused by Bitcoin Inscription, This can be solved by developing the second layer (L2) of Bitcoin.
Adam Back is no stranger to everyone. His invention of Hash Cash (digital cash) in 1997 directly inspired Satoshi Nakamoto to create Bitcoin, so he is called the Godfather of Bitcoin. Block Stream, the company he founded, is a world-renowned Bitcoin development company and a key driver of all major Bitcoin upgrades (including Segregated Witness and Taproot upgrades).
Given his huge influence in the Bitcoin community, this tweet sparked widespread discussion, with people beginning to think about the impact between Bitcoin inscriptions and L2 solutions, as well as the new development opportunities that L2 will bring to Bitcoin and on-chain assets.
The relationship between Bitcoin inscription and L2
To understand the relationship between Bitcoin Inscription and Bitcoin's L2, we first need to review the history of asset issuance. From 2016 to 2019, Ethereum became the mainstream platform for issuing assets in the crypto industry, and the ERC20 token standard became mainstream, just like today's Bitcoin issuance standard Brc20 and other XRC20. The ICO boom in 2017 can be said to be more ferocious than the current inscription momentum.
Of course, most ERC20 tokens have skyrocketed and plummeted, and many have eventually become worthless, and the various XRC20 tokens that are popular now are likely to face a similar fate. However, between 2016 and 2019, in addition to the generation of various air tokens, there also emerged token-based decentralized finance (DeFi) protocols, such as MakerDAO, Uniswap, etc. These protocols have experienced bull and bear markets, and finally ushered in an explosion in the DeFi summer of 2020, and they are still a model of decentralized applications.
From this historical perspective, can Bitcoin Inscription or other XRC20 tokens also build decentralized applications? The answer is yes, and this is an inevitable trend. However, since Bitcoin's design goal is simplicity and security, Bitcoin cannot directly support decentralized applications, so Bitcoin's second-layer solution becomes necessary.
Bitcoin Inscription 1.0 to 2.0
Looking at the development of Bitcoin Inscription from its birth to the present, we can divide it into two stages: Bitcoin Inscription 1.0 and 2.0. The gameplay of Bitcoin Inscription 1.0 is relatively simple and direct: conceiving narrative, FairMint (fair launch), community Fomo, narrative failure, and a mess. There are many narratives described by inscriptions, such as cross-chain bridges, decentralized exchanges (DEX), oracles, and issuance platforms. But if these applications are really to be realized, deploying them on Bitcoin's second-layer solution may be the best choice.
The proposal of the Bitcoin Godfather seems to give us a glimpse of how Bitcoin Inscription 2.0 will work: issuing assets based on Bitcoin, issuing tokens through FairMint, and moving inscription assets across to L2. This is an interesting idea. This model allows inscription applications to play a greater role in the Bitcoin ecosystem and capture the value of the application or protocol itself through tokens.
Summarize
Adam Back's point of view is to look at the development of inscriptions and Bitcoin ecosystem from the perspective of a builder, and he provides a practical solution - developing Bitcoin L2. On the other hand, developers like Luke seem to have "technical cleanliness", and when they see a new thing like inscriptions, they just kill it with one blow and resolutely strangle it.
If the conclusion that "Bitcoin needs L2 more than Ethereum" was put forward before the Bitcoin Inscription became popular in 2023, not many people would understand and accept it. However, with all kinds of Inscription assets flying around today, especially for those teams that have issued Inscription assets and hope to continue to build, Bitcoin's L2 solution has almost become the only solution for the future development of Inscription. Because this not only provides better scalability, lower transaction fees and faster transaction confirmation speed, but also combines with Bitcoin, a global digital currency, to further expand its scope of application and influence.
