On December 19, the Bitcoin Ecosystem Year-End Carnival: BTCEco 2024: Year in Review Space, hosted by SatoshiLab and co-organized by Waterdrip Capital, Web3labs, and MetaEra, was successfully held.
Article author: Ada, MetaEra
2024 is coming to an end. This year, we have witnessed the historic moment when Bitcoin broke through the $100,000 mark, and we have also seen more and more listed companies and institutions use Bitcoin as a strategic reserve asset. In order to comprehensively review the achievements of the Bitcoin ecosystem this year, on December 19, 2024, SatoshiLab, together with Waterdrip Capital, Web3Labs, and MetaEra, held an AMA event entitled "Bitcoin Ecosystem Year-End Carnival" to review the latest developments in the Bitcoin market, technological innovations, and the future direction of ecological development. Guests participating in this event include active project parties from popular Bitcoin tracks such as BTCFi, Layer 2, Lightning Network, and infrastructure, as well as investment institutions that pay close attention to the BTC ecological track.
Topic 1: Innovation and Challenges of Bitcoin Financial Services
The guests participating in the first BTCFi discussion session are:
Spencer, Fractal Bitcoin Core Contributor
Kaitai Chang, Co-founder of Yala
Han, CEO of BitFi
Catherine, Business Development, Solv protocol
Ari, Bitsmiley Market Growth Officer
Lionel, Co-founder of DeSyn Protocol
Zhuling Chen, Bedrock core contributor
Taylor Harris, DappOS Community Lead
The guests discussed three topics: sources of income, security measures, and market education and acceptance. Among them, Kaitai Chang, co-founder of Yala, took the lead in sharing that there are two main sources of income for Bitcoin, one is centralization and the other is decentralization. Centralization mainly refers to obtaining income for Bitcoin holders through hedging, arbitrage, etc.; decentralization is divided into Defi and real assets. Defi generates interest by providing users with liquidity for cross-chain staking, interaction, or node verification, while real assets give part of the liquidity to a third party for restricted asset staking, and pull offline income to online feedback. Zhuling Chen, a core contributor to Bedrock, supplemented this issue. He believes that income can also be obtained in the form of interest through trading or lending.
On the issue of security solutions, Taylor Harris, head of the DappOS community, believes that security is a key issue and should not be ignored. The protocol should implement a variety of solutions to ensure security, such as conducting smart contract audits, building a preventive blocking system, and stopping losses in time when abnormal situations occur to reduce losses. Lionel, co-founder of DeSyn Protocol, shared that their project is building a security module, implanting a time lock mechanism to lock the user's BTC wallet address, prevent unauthorized asset transfers, and systematically ensure the security of the cooperation agreement. He believes that doing security well is a very systematic and long-term process.
Regarding market issues, the guests said that BTC's market education was later than ETH's, but it has gradually matured in recent years. With the improvement of wallet security and user experience, the acceptance of large and ordinary users is also increasing. In the future, with the explosive growth of the BTCFi ecosystem, especially in European and American institutions, as long as the risks are clear and the operations are compliant, more and more people will be willing to participate.
Topic 2: How does Layer 2 technology improve Bitcoin scalability?
Guests participating in this session include:
Alisia, Co-founder of Botanix
Eligos Cheung, Head of Market Development, BOB Asia
Luke, Co-founder of Zulu Network
Jeff, Founder of Merlinchain
Charlie, Co-founder of Bitlayer
Baiyu, Partner at CKB
In recent years, with the rapid development of the cryptocurrency industry, Bitcoin, as one of the earliest cryptocurrencies, has gradually shown performance and scalability issues. In order to solve this problem, Layer 2 solutions have emerged. This solution aims to increase the transaction speed of the Bitcoin network, reduce transaction fees, and enhance the security of the system. However, in practical applications, these solutions still face many challenges. In this session, the guests discussed in depth the current status of Bitcoin's second-layer solutions, the challenges they face, and future improvement directions.
In terms of technical issues and solutions, Botanix co-founder Alisia first pointed out the drawbacks of conventional solutions on the market, including high transaction fees and extremely high uncertainty in the development process. Then she shared Botanix's solution, which is to use the Lightning Network to build a decentralized multi-chain Spider chain, which achieves fast and cheap transactions and meets the core requirements of the Bitcoin network. The target audience is Bitcoin holders who have never participated in Defi.
Baiyu, a partner of CKB, believes that from the perspective of Ethereum, Bitcoin Layer 2 will have various problems, but from the perspective of Bitcoin ecology, the real challenge is the application layer of the Layer 2 solution. The first is the problem of Bitcoin Layer 2 asset standards, where decentralized consensus leads to a lack of assets; the second is the Lightning Network, which, although promising, still faces many problems, such as the utilization rate of funds. Their solution is to issue native stablecoins and connect to the Lightning Network.
At the same time, Baiyu also shared the team's plans for next year, including incubating a Finnish publishing company to publish books on Bitcoin; launching stablecoins on the first layer of Bitcoin, allowing Bitcoin's first layer assets to enter the Lightning Network and realize atomic swaps to improve speed and experience; and doing mining or payment-related businesses in Hong Kong.
Regarding technical improvements and team plans, Merlinchain founder Jeff said that in 2025, Merlinchain will further improve security and decentralization and deploy full nodes to obtain complete data status. As Layer 2 becomes more decentralized and solutions are improved, users will be more willing to use Bitcoin to generate income, and BTCFi will become more prosperous and more playable.
Topic 3: Lightning Network empowers the future of Bitcoin payments
This session revolves around the Lightning Network, and the participating guests are:
Sumeru Hu, Co-founder of UXUY
Shaun, Partner at YakiHonne
Darius, Co-founder of Lnfi Network
Cipher, Founder of UTXO Stack
John, Founder of BEVM
Bibo, Founder and CEO of BiHelix
Although Bitcoin has made remarkable achievements in value storage and investment, its application in daily payment has been limited by transaction speed and fees. In order to solve this problem, the Lightning Network came into being and is hailed as a key solution to improve the efficiency of Bitcoin payments. In the third session, the guests discussed in depth the current status of Bitcoin and the Lightning Network, the challenges they face, and the future development prospects.
First, each speaker introduced the layout and progress of their respective projects on the Lightning Network. Next, they discussed how to increase the popularity and acceptance of the Lightning Network and Bitcoin infrastructure, and looked forward to the future development of Bitcoin and the Lightning Network in the global payment market.
Among them, Shaun, a partner of YakiHonne, said that the low adoption rate of the Lightning Network is mainly due to the lack of support for stablecoins and the lack of fool-proof products that are easy for users to understand. YakiHonne has been fully upgraded and added a one-click function to generate a Lightning Network wallet. Users can pay directly with their wallets in any consumption scenario when using its products. Through offline connections, they found that many people in the ecosystem have the habit of using the Lightning Network, and in some countries and regions, Bitcoin payments have begun to be accepted by some merchants.
Bibo, founder and CEO of BiHelix, also expressed his views on how to popularize it among users. He believes that the Lightning Network is essentially an extension layer of Bitcoin. To achieve commercial use, a large-scale application ecosystem must be derived. Stablecoins will only be implemented after the application layer problems are solved. Only when assets come first can more applications be implemented.
Although optimistic about the future of Bitcoin and Lightning Network, Cipher, the founder of UTXO Stack, still believes that Bitcoin may become a strategic reserve asset for countries or institutions, but it is difficult to become a mainstream payment tool. As the basis of Lightning Network, Bitcoin chain will be the most mainstream chain application in the future. In the long run, the demand for stablecoin payment accounts for a small proportion. In the future machine-to-machine payment, Lightning Network will become the basis due to its performance and cost advantages, occupying the machine-to-machine payment track first, and then counterattacking the payment between people. It is expected that large-scale application of Lightning Network will gradually appear in the next 3-5 years.
The guests generally believed that Bitcoin and Lightning Network will achieve major breakthroughs in the next 18 to 24 months. In particular, with the introduction of stablecoins and the continuous iteration of technology, Lightning Network is expected to be widely used in the payment field.
Topic 4: Core technologies and challenges in Bitcoin infrastructure construction
In the fourth session on infrastructure, the participating guests were:
Lorenzo, Founder of Unisat
Hanzhi, Co-founder of Nubit
Jeffrey, Advisor, Bool Network
Waiting for the light, exSat Asia Marketing Director
Naka, Satoshi Protocol
Over the past year, the Bitcoin ecosystem has made significant progress in infrastructure development, including developing more accessible APIs, supporting multiple protocols, and improving the reliability and robustness of services. These efforts have laid a solid foundation for the further development of the Bitcoin ecosystem.
The guests emphasized the importance of infrastructure construction and shared the work results of the past year. For example, Lorenzo, the founder of Unisat, shared that in the past year, Unisat has packaged the details of Bitcoin development, provided more accessible SDKs and APIs, completed the support and integration of a series of protocols from BRC20 to ROS, processed about 10 billion API requests per month, and the number of active keys is about 4,000-5,000. These developments not only improve the service quality of the Bitcoin ecosystem, but also provide developers with better tools and support.
Regarding the future development direction, the guests generally believe that the Bitcoin ecosystem will experience a lot of demand growth. Lorenzo also mentioned that as the Bitcoin ecosystem develops, developers' demand for rapid development tools will increase. The Unisat project also plans to expand its influence through tracks such as BTCFi in the coming year. This shows that the future development of the Bitcoin ecosystem will focus more on meeting the actual needs of developers and users.
Security and compliance are key factors in the development of the Bitcoin ecosystem. Guests mentioned the importance of cross-chain interoperability, the implementation of payment scenarios, and privacy and compliance technologies. The Protocol project plans to promote the development of cross-chain interoperability through its native stablecoin and decentralized index. This shows that the industry attaches great importance to improving the security and compliance of the Bitcoin ecosystem.
In order to increase user participation, the guests suggested providing more application scenarios and incentives. exSat Asia plans to encourage developers to explore new applications through hackathon activities and financial support. This shows that by increasing user participation and incentive mechanisms, the development of the Bitcoin ecosystem can be further promoted.
Topic 5: Exploring investment trends and future opportunities in 2024
The final discussion on investment trends included:
Jack Kong, Founder of Nano Labs
Jademont, CEO and Managing Partner, Waterdrip Capital
Eric, CMS Holdings Bitcoin Ecosystem Investor
Jennie, Bitcoin Ecosystem Partner at Web3Labs
Albert, CEO of Bitcoin Startup Club
In this session, cryptocurrency investors focused on discussing the current status of the Bitcoin ecosystem, future prospects, technological innovation and its impact on financial investment, and also explored the possible impact of different national policies and the challenges and opportunities in the future. Participants were generally optimistic and believed that technological innovation and infrastructure improvement are the key to the sustainable development of the Bitcoin ecosystem.
At the meeting, Jademont, managing partner of Waterdrop Capital, introduced his observations on the Bitcoin ecosystem. He pointed out that since the beginning of last year, the Bitcoin ecosystem has become more popular, and after a peak period, it has been slightly quiet, but it is expected that the ecosystem will soon usher in an explosion. He mentioned that many leading projects have good data, showing positive signs of the ecosystem. In addition, many listed companies have begun to use BTC as company reserves, showing the market demand and potential for Bitcoin.
When talking about the development direction of the BTC ecosystem in the next 2 to 3 years, Jademont believes that the most noteworthy development direction may be the improvement and enhancement of infrastructure. Despite the continuous market innovation based on Bitcoin, the Bitcoin ecosystem still needs to improve its expansion capabilities and user coverage compared to other platforms. Although technologies such as the Lightning Network have made progress, the technical threshold and user base are still in the early stages. In addition, in the short term, projects within the BTC ecosystem may become an opportunity for the ecosystem to explode, especially products that can attract more users and funds to participate. For the future, the community is optimistic about products that can provide a good user experience.
Jennie, Bitcoin Ecosystem Partner at Web3Labs, believes that regulatory policies have a significant impact on the cryptocurrency market and determine the speed of ecological development to a certain extent. The US policy has given traditional institutions more confidence, driving a large amount of funds and users into the ecosystem, which has a positive effect on the development of the cryptocurrency industry. At the same time, she also believes that the Bitcoin ecosystem opportunities and scalability in emerging markets are increasing. From an investment perspective, attention should be paid to technical capabilities and ecological development paths.
During the discussion, the guests also explored the possible impact of ETFs on the Bitcoin market and its halving cycle. On the one hand, the introduction of ETFs is believed to make the Bitcoin market more stable and attract more traditional institutional investors to participate, which may change the volatility and cyclical characteristics of Bitcoin. On the other hand, regulatory policies and compliance requirements increase the challenges for entrepreneurs. Overall, the discussion focused on how ETFs affect the stability and investor structure of the Bitcoin market, as well as the potential impact of this change on the market cycle.
The perfect conclusion of this AMA is inseparable from the profound and detailed speeches of the guests. They gave us a deep insight into the development of the industry and made us feel the passion of the bull market. The future is promising!
