At the beginning of last year, the birth of the Ordinals protocol broke the bear market downturn, like a fire in winter, igniting the Bitcoin ecosystem that had been tepid and not paid much attention to. From Ordinals to BRC-20, and then to Atomicals, a series of innovative inscription protocols and asset standards continue to inject new vitality into the Bitcoin ecosystem.

The popularity of inscription assets such as ORDI and SATS has not only pushed Bitcoin inscriptions to an unprecedented upsurge, but also marked the advent of a new era. Before this, the Ethereum ecosystem was the only one in the limelight. After the popularity of Bitcoin inscriptions, more and more users, developers and funds began to pay attention to and participate in the Bitcoin ecosystem. One of the most obvious signs of this change is the emergence of many Bitcoin sidechains and Layer2 projects. At present, there are more than 34 projects on the market that have publicly announced that they will build Bitcoin's Layer2, many of which have completed huge financing. If those that have not yet been made public are included, it is expected that more than 100 projects will participate in the competition.

#比特币 #Layer2 This Hundred Regiments War is bound to be a riot of demons at the beginning, but after the tide recedes, some projects will inevitably stand out. Some of these projects may be good at marketing, and some may rely on solid technology and be the winners of different technical architecture solutions in the Bitcoin Layer2 track. Among these winners, #Nervos CKB will undoubtedly occupy a place. However, before analyzing $CKB 's advantages, we need to clarify a question: What problem does Bitcoin Layer2 solve?

What problem does Bitcoin Layer2 solve?

Ethereum's Layer2 has been developed for so many years, from the initial Sharding, to the later State Channel, Plasma, and finally Rollup became the mainstream. The core of these Layer2 solutions is to improve the performance of Ethereum Layer 1, that is, to package most of the Layer 1 transactions into the Layer2 network to reduce the pressure on the main network.

Bitcoin's transaction processing speed (TPS) is about 7 transactions per second, which is a very low starting point, so any form of Layer2 technology will undoubtedly greatly improve its performance. The biggest problem with Bitcoin at present is that it is not Turing complete. The feature of not supporting smart contracts limits the development of Bitcoin's more complex ecological business. After the emergence of protocols and standards such as Ordinals, BRC-20, and Atomicals, the issuance of assets on the Bitcoin chain is no longer a problem. The pain point now becomes how to make these assets have more application scenarios or more ways to play.

Therefore, the primary task facing Bitcoin Layer2 is to expand Bitcoin’s very limited programming capabilities, which is what we often say: the first layer issues assets, and the second layer does applications. The Layer2 network solves the programming problem.

The current Bitcoin Layer2 track can be roughly divided into several directions, including state channels, client verification & one-time sealing, Rollup, side chains, etc., according to different technical architectures.


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Figure: Classification of Bitcoin Layer2; Source: https://medium.com/@Janenico

Among them, the state channel is represented by the Lightning Network, which realizes low-cost, high-speed and high-scalability transaction confirmation by conducting transactions off-chain (in the channel), and is only submitted to the main chain when the channel is closed. However, the development progress of the state channel is relatively slow, and the complexity of the channel may lead to uncertainty. Client verification and one-time sealing are mainly represented by RGB, with off-chain data storage, on-chain commitment, and client verification, but the disadvantage is that it is slow to progress and smart contracts cannot interact. Rollup is represented by BitVM, Bison, etc. The defect is due to the characteristics of Bitcoin. At present, no project can perfectly reproduce the verification method of Rollup on Ethereum.

The sidechain is an independent blockchain, usually with its own consensus mechanism and a set of independent verification nodes, connected to the main chain through a two-way cross-chain bridge or 2WP. Compared with other technical architecture solutions, the sidechain solution will progress faster. Therefore, in this round of Bitcoin Layer2 Hundred Regiments War, the sidechain solution will become the main battlefield, which will be the direction with the most intense competition, the most projects, and the easiest to see the effect. In this direction, CKB is the most worth looking forward to.

CKB, the most anticipated Bitcoin Layer2

CKB was launched in November 2019, using the PoW consensus mechanism and UTXO model, which is completely isomorphic to Bitcoin. In addition, CKB also has the Axon framework, which can achieve "one-click chain launch".

In the current Bitcoin Layer2 war, especially in the sidechain track, CKB is the most anticipated because it has incomparable advantages over other sidechain solutions in terms of security, expanded Bitcoin programming capabilities, technology accumulation, ecology, etc.

The first is security. Sidechains are independent blockchains that do not inherit the security of the main chain, so many sidechain projects tend to be centralized due to too few nodes. CKB has adopted the same time-tested PoW consensus mechanism as Bitcoin from the beginning to ensure security and decentralization to the greatest extent.

CKB's mining algorithm is the self-developed Eaglesong. After April 2020, CKB smoothly transitioned to the era of ASIC mining, passing the most dangerous moment of the PoW chain. The mining machine currently used by CKB is produced by Bitmain, the world's largest ASIC mining machine manufacturer. The current total network computing power of CKB is about 158 ​​PH/s, and it successfully experienced the first mining output halving in November last year.

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Figure: CKB computing power; Source: https://talk.nervos.org/t/ckb-weekly/7306

In terms of expanding Bitcoin programming capabilities, CKB has generalized the UTXO model and named it the Cell model. Like UTXO, Cell is also a transaction output, but Cell generalizes the amount in UTXO and corresponds to the capacity and data, thus turning the original space for storing integers into a space for storing arbitrary data. At the same time, there are LockScript and TypeScript in the Cell data structure. The former mainly reflects ownership, while the latter can customize many rich functions, such as implementing the Covenant (restrictive clause) function that is not available on Bitcoin. In the Cell script, developers can also specify cryptographic primitives according to their needs, which is very flexible. In short, the Cell model continues the basic philosophy of Bitcoin UTXO, making it easy for the CKB chain to inherit the simplicity and security of Bitcoin, and through clever modifications, Cell has the ability to support smart contracts.

In addition to the highly flexible Cell model, CKB's virtual machine is also very powerful. It uses the open instruction set RISC-V, which supports developers to develop smart contracts in any language. As long as they are compiled into the RISC-V binary format with a suitable compiler, they can be executed. It is not only efficient, but also a variety of cryptographic algorithms, whether it is Bitcoin's original Secp256k1 or the later introduced Schnorr, can be directly ported to the CKB blockchain for operation.

In terms of user experience, the CKB mainnet is fully compatible with BTC addresses and wallets, which allows users of the Bitcoin ecosystem to enter the CKB ecosystem without feeling anything. The inscription protocol Omiga on CKB already supports the Bitcoin wallet UniSat. Users of the Bitcoin ecosystem can directly use the UniSat wallet to deploy, mint, and transfer inscription assets on the CKB chain. In contrast, when users of the EVM sidechains with account models switch from the Bitcoin ecosystem to the EVM sidechain, they have to switch wallets, which is very fragmented in terms of user experience.

More than four years of technical accumulation and gradual improvement of infrastructure are also one of the reasons why CKB deserves attention. On the one hand, CKB has the Axon framework of "one-click chain launch", and various Bitcoin inscription communities, such as Ordi, Sats, and Rats, can easily launch their own BTC Layer3 on CKB. On the other hand, CKB's development tools are also becoming more and more perfect. In addition to the various toolkits and SDKs contributed by the core development team, the community team is also actively contributing, such as the PW SDK made by the Lay2 team for building CKB dApp, and Kuai made by the MagickBase team to significantly reduce the threshold for dApp development.

In terms of ecology, CKB is also far ahead of other sidechains. The JoyID wallet uses biometric technology (fingerprint/face scan) to create and manage wallets. Users can use it without any blockchain knowledge, and it supports multiple chains. It is more powerful than the MetaMask wallet in terms of functionality, and is not inferior to Web2 applications in terms of user experience. CKB has its own DID system (.bit), which also supports multiple chains and Passkey. It is more powerful and compatible than the Ethereum domain name service ENS in terms of functionality, and has received $13 million in Series A financing. The inscription protocol Omiga and the NFT protocol Spore Protocol, which stores data completely on the chain, are both online. Other infrastructures such as DEX and cross-chain protocols are already in the testnet stage and will be launched in the near future. Khalani, a decentralized full-chain liquidity protocol that provides infrastructure for Defi, is also in the testnet stage.

In short, CKB, with its excellent security, innovative technical solutions, rich technical accumulation and increasingly improved ecosystem, will become the most anticipated Bitcoin Layer2. CKB will not only provide new possibilities for the expansion of Bitcoin programming capabilities, but also provide developers and users with a safe, flexible and friendly blockchain environment. With the further maturity of technology and the continuous development of the ecosystem, CKB will undoubtedly play an increasingly important role in exploring the frontier of Bitcoin Layer2.

References:

1. The explosive inscription track is the fuse for the Bitcoin ecosystem to return to its peak:

https://www.chaincatcher.com/article/2109579

2. Is the new form of BTC L2 a flash in the pan, or is it a rebirth?

https://www.theblockbeats.info/news/50323

3. Bitcoin Ecosystem Note: Bitcoin Layer2, Ordinals, BRC20 and Lightning Network

https://medium.com/@Janenico/Bitcoin Ecology Note-Bitcoin Layer2-Ordinals-BRC20 and Lightning Network-34f7fb7dc4a8

4. Cell Principle

https://nervosbook.github.io/book/zh/cell.html

5. Bitcoin L2 succession battle: origin, turning point and CKB’s choice

https://www.xiaoyuzhoufm.com/episode/65ae29ec0f5dec41d43c5a56