Author | Mu Mu
Produced by｜Baihua Blockchain
In the past year, the Bitcoin ecosystem has developed rapidly. Many people were suddenly enlightened when they heard that the Bitcoin ecosystem also has "smart contracts": "If Bitcoin, which has an unrivaled consensus and a stronger network, has smart contracts, then there will be no need for public chains such as Ethereum and Solana?" This view is quite widespread and has gained the support of many novices and even some financial KOLs, but is it really the case?
01. Bitcoin is supreme
"There are only two kinds of coins in the world, one is Bitcoin and the other is altcoins." Bitcoin supremacists have maintained this view for many years. On the one hand, Bitcoin supremacists are satisfied with their views, while on the other hand, opponents sneer at them and often use them as a satire.
In fact, the reason for such a stubborn view is that Bitcoin has never disappointed people since its birth. From bear to bull, Bitcoin has made a comeback in cycle after cycle. It seems to have become a repeatedly verified fact that makes people have to be convinced and develop a firm belief that the direction of Bitcoin is always right.
If this is the case, then if Bitcoin is as powerful as it is and has its own smart contracts, DAPP can be deployed directly, why is Ethereum needed? And there is no need for Solana! This logic seems to make perfect sense.
Some people objected that Ethereum and Solana represent technological innovations from generation to generation and should be embraced. However, the biggest Bitcoiners have enough reasons to refute: "Innovation also has a price and is prone to failure."
02. It’s not that Bitcoin is right, but its direction is right
The views of most of the biggest Bitcoiners who reject innovative projects such as Ethereum and Solana seem to be correct, but they seem to have missed a very important point, which is that Bitcoin at that time was also an innovation compared to traditional financial projects and even some similar electronic currency projects that were launched earlier. Isn’t the reason why most of the biggest Bitcoiners can reap the benefits of Bitcoin because they embraced this innovation back then?
Why are people now conservative and unwilling to embrace innovations that they could have embraced back then? Perhaps they have a mentality of quitting while they are ahead. It has not been easy to HODL for so many years, and they have finally made it to the present day after struggling hard. They do not want to be swept away by some high-risk innovations. After all, they have seen too many star projects collapse overnight, so they have become cautious.
As mentioned before, Bitcoin was not the only electronic currency innovation of that era. Many institutions, organizations, and even some illegal organizations proposed similar concepts at the time. Some of them were even referenced by Satoshi Nakamoto when he designed Bitcoin. To this day, there are project owners who will say: "I can do everything that Bitcoin can do, and I can also do what Bitcoin cannot do." In fact, it makes no difference.
So has anyone ever thought about why only simple Bitcoin can stand out from these projects and develop sustainably? The same question can be applied to Ethereum and Solana. Why can these innovative projects stand out and be sustainable?
The reason why Bitcoin has gained wide recognition is mainly because its core concept and direction grasp the key points and the rigid needs of the times, and use incentive mechanisms to allow humans to participate in large-scale collaboration in an open manner, bringing about a bottom-up decentralized, free, fair, and transparent value storage platform. This is also the original intention of the encryption project.
There are so many projects now, not all of them maintain the original intention of Crypto. Some are purely innovative concepts packaged and customized for VC and investors' FOMO psychology. They will do PUA, saying that sacrificing a little decentralization can be exchanged for high efficiency and greater value. After all, making money is the bottom line, which touches the hearts of many people.
The current phenomenon is that people hear that the public chain has a big cake and a high valuation, so a group of people flock to build public chains, because this can attract higher investments, be more imaginative, and allow users to spend more money. So don’t ask why it is obviously a valuable project, but it just can’t take off? The fundamental reason is that the direction is wrong, because for projects with the purpose of profit, most of the revenue targets are ultimately users, and the wool can only come from the sheep.
Crypto exists not because of high performance and efficiency or other alternative performance, but because of the decentralization, freedom, fairness and transparency it brings, and the applications that truly meet the needs of Web3 and have landing value. We should pay more attention to applications that solve problems that Web2 cannot solve and the real value behind them.
As mentioned in the previous article "Is the Bitcoin bull market, the most difficult to make money in history, about to end?": In any industry, anyone who does not pursue the correct values of the industry, does not recognize the value of the industry, and enters with the mentality of "cutting leeks" is destined to fail in this career. Even if they taste the sweetness at the beginning, they will soon be eaten back by the market. Many people have forgotten the original intention of Bitcoin and the encryption industry, and the final result of distorted values may be serious misjudgment.
With just this simple method, you can actually identify 90% of the "unscrupulous" projects on the market.
03. With the development of Bitcoin ecosystem, Ethereum and Solana can still thrive
1) Diversified needs
Before the emergence of Ethereum and Solana, Bitcoin was not alone. There were also a large number of early altcoins that were active around it. This was determined by the market's diversified needs. Of course, each project has its own value. We can at least divide these projects into three categories:
Digital Gold
There is only one project that can be called digital gold, Bitcoin. In the global environment, the rigid demand for digital gold is beyond words.
Durable goods
Ethereum and some sustainable Web3 infrastructure and applications such as DeFi have solved problems that Web2 cannot solve. When EVM becomes the standard for most smart contract public chains on the market, Ethereum has become an indispensable part of Web3. Such projects have long-term value and are durable goods.
Fast Moving Consumer Goods
Meme allows emotional value to be stored, but many emotions, including some new concepts, come and go quickly, just like a piece of paper, which has a certain life cycle. You cannot expect it to be used repeatedly, nor can you expect it to provide value in the long run.
The first two can be used as medium- to long-term targets, while the latter can only be a one-time investment, otherwise it is easy to get stuck and unable to get out.
2) Technological innovation
This is not the first time that the Bitcoin ecosystem has been proposed to introduce smart contracts. There have been many attempts as early as the early days of Bitcoin (such as colored coins), and the exploration has continued to this day.
There were many technical bottlenecks in the early days. At that time, it was almost impossible for Bitcoin to directly introduce powerful smart contracts without abandoning the original technical route. After all, if the code and route were changed drastically, the developers would have scattered long ago, and it would be impossible to have the strong consensus today.
Originally, Vitalik Buterin proposed the idea of introducing smart contracts in the Bitcoin community, but due to opposition from the Bitcoin core, Vitalik Buterin decided to start anew, and later Ethereum was born.
In recent years, Bitcoin has maintained a stable technical route, while Ethereum has brought many innovations, such as smart contracts, POS, EIP1559, etc., especially Rollup Layer2, which solves the scalability problem.
The current Bitcoin ecosystem, except for some innovations in Lightning Network and Stacks, most of the technical solutions of Ethereum's Rollup are directly borrowed. Has anyone thought about whether this is really applicable?
Take ZK-Rollup as an example. It was originally a Layer 2 solution designed for smart contract platforms such as Ethereum. After Zk-Rollup calculates the zero-knowledge proof off-chain, it submits it to the Ethereum chain for direct verification and settlement. However, Bitcoin itself cannot directly verify the zero-knowledge proof. Some project parties have tried to add another layer of middleware in the middle, such as an oracle, to force this process through. However, this behavior is tantamount to taping a bull's horn to a horse's head and forcibly transforming it into a "unicorn."
04. Bitcoin itself does not support smart contracts
Bitcoin smart contracts are currently just a slogan for related ecological projects. The smart contracts here are all implemented through ecological projects. Bitcoin itself does not support smart contracts, and it is highly likely that it will not be upgraded to support them in the future, because "you can't have your cake and eat it too." If you want to make pure digital gold, there can be no smart contracts.
First, the UTXO data structure itself cannot achieve a state as complex as the Ethereum account model; secondly, as a smart contract platform, while the ecosystem is developing, it is also constantly reducing inflation, causing BTC as a transaction fee to become more and more expensive, so that the high cost will inhibit the development of the ecosystem.
As mentioned above, Bitcoin smart contracts refer to Bitcoin ecosystem project smart contracts, but the security, reliability and even scalability of smart contract projects implemented through layering are not as good as the Ethereum ecosystem. The Ethereum ecosystem has always been the largest "export" destination for Bitcoin. WBTC, tBTC and Coinbase's cbBTC are entering the Ethereum ecosystem in different forms to participate in DeFi. From a layered perspective, Ethereum is already the largest and most widely used side chain of Bitcoin. In fact, the innovations of the Ethereum ecosystem, including scalability, interoperability, and account abstraction, have long been at the forefront of the industry, and a number of Bitcoin ecosystem projects that "copy homework" can only follow behind.
05. Summary
The Bitcoin ecosystem, Ethereum ecosystem, Solana ecosystem, and more and more innovations in the future, as long as they maintain the original intention of Crypto and create real value around the values of Web3, they all have their rationality of existence. You take the sunny road, I take the single-plank bridge, and we all have a bright future.
