At the most recent bitcoin++ developer conference in Austin, TX, Alex B. of bitcoin Magazine sat down with Michael de Boltz and Tiero of Ark Labs to discuss the latest developments in the bitcoin technology ecosystem, particularly focusing on the Lightning Network, Liquid and emerging technologies like Arca.
The journey and challenges of lightning
Reflecting on the Lightning Network's journey, Michael shared insights into the challenges they face, especially in high-fee environments. “The biggest blind spot that was glaringly obvious recently was that in a high-fee environment, Lightning tends to hurt a lot,” he said. He explained the difficulties posed by rate increases and the need for better preparation and solutions, such as moving operations to different chains through submarine exchanges.
Tiero highlighted the underappreciated challenge that Lightning infrastructure presents. He pointed out the need for innovative designs that use Lightning to connect multiple layers, including Fedimint, Liquid and Ark, to improve the user experience. “Lightning will always be the way to connect all these new ideas,” Tiero said.
Liquid's controversial role
Despite its relatively modest adoption compared to other technologies, both Michael and Tiero acknowledged that Liquid has proven to be a stable and reliable platform. “Liquid has been around. It's known and it's survived. It still exists today,” Michael said, noting the platform's resilience and reliability over time. This stability is crucial for developers looking to create and experiment with new solutions without the risk of frequent interruptions.
Ark Labs' Tiero expanded on the advantages of sidechains like Liquid, highlighting their ability to reduce congestion on the bitcoin mainchain. “Having a sidechain with clear tradeoffs can alleviate pressure on the mainchain,” he said, emphasizing that Liquid's architecture offers several benefits, including lower transaction fees and faster processing times. This can be particularly beneficial in high-fee environments, where moving operations off the main chain can generate significant cost savings.
Michael also addressed the competitive landscape of new blockchain propositions, stating that Liquid's established track record offers a level of trust and predictability that newer solutions may lack. “In the grand scheme of the new proposals coming, I think Liquid is here to stay at least for quite some time.”
Emerging standards and interoperability
Discussing fragmentation within the ecosystem, Michael de Boltz outlined the critical role his company could play in providing liquidity across different chains and services. This ability to facilitate exchanges between various layers of bitcoin, such as Lightning, the main chain, and Liquid, is crucial to maintaining a fluid and interconnected ecosystem. By offering these services, Boltz helps bridge the gaps between different platforms, making it easier for users to move assets seamlessly.
Michael also highlighted the importance of maximizing competition between service providers to ensure users receive the best rates on the market. “Ultimately, an open specification would make sense, but we are at a very early stage in this process,” he said, highlighting the need to experiment before moving toward standardization. This experimentation phase allows for the identification of best practices, which can then inform the development of standardized protocols.
Ark Labs' Tiero echoed Michael's sentiments, adding that the diversity of user needs makes it difficult to establish universal standards at this stage. “Each company has its own user and sensitivity towards its user.” He suggested that a larger, more diverse ecosystem would justify efforts toward standardization, but until then, companies need the flexibility to innovate and respond to their specific user bases.
Both agreed that the current priority is to allow companies to experiment and innovate freely. “We can move much faster if we can test things ourselves and see where they go,” Michael said. This approach allows for rapid iteration and adaptation, fostering a stronger and more resilient ecosystem in the long term.
Innovating with ARK
Ark Labs' Tiero gave an exciting insight into his latest project, Ark. “ARK is still in a post-idea stage.” The goal, he explained, is to create a protocol that integrates seamlessly with existing technologies like Lightning, ensuring that it can effectively meet the needs of its users.
“We managed to show that it's feasible, that it's working. And I think the next step will be to really try to understand what are the real use cases for which the demand is huge,” Tiero said. By focusing on practical applications and real user needs, ARK aims to create a robust, easy-to-use protocol that addresses the current limitations of the ecosystem.
Experimentation is a key part of ARK's development strategy. Tiero emphasized the importance of testing in flexible environments like Liquid before finalizing detailed specifications. “Let's go where it's super flexible and Liquid has introspective code at the highest level so you can actually do recursive pacts,” he explained. This approach allows the team to explore the full potential of the protocol and make necessary adjustments based on real-world applications and feedback.
Michael pointed out the uncertainties surrounding ARK's future use cases and liquidity requirements. “This is also again an unknown. In theory, it is interesting for service providers who have liquidity anyway,” he said, emphasizing the need for further exploration and development.
Optimism for the future of bitcoin
Concluding the discussion, both Tiero and Michael expressed a strong sense of optimism about the future of bitcoin layers and pact technology. Tiero, in particular, was optimistic about the advances being made in pact technology, seeing it as a transformative force for improving protocols like ARK and Lightning. “I'm very, very optimistic after these two days because, for the first time, all the people who work with Covenant in production or in general, are very, very knowledgeable about the subject.” He welcomed the opportunity to bring together experts to discuss and refine these ideas in a collaborative environment conducive to groundbreaking innovation.
They also praised specific proposals, such as Rusty Russell's restoration project, which aims to methodically improve bitcoin's scripting capabilities. “Rusty's model really gives us something to talk about, a framework of what these pacts mean from a computational perspective and, as I said, restoring the bitcoin script to its former glory in a safe and sensible way,” he said. Michael.
