Following the launch of the first US spot bitcoin exchange-traded fund (ETF) in January and last month's Halving event, cryptocurrency investors have been waiting for the next big catalyst to propel bitcoin to newer heights. beyond its current record of $73,700, set in March. 14.
According to a recent Bloomberg bitcoin-developers-tout-programmability-as-the-catalyst-for-the-next-rally” target=”_blank” rel=”noopener nofollow”>reportFor a growing chorus of developers, the answer may lie in improving the cryptocurrency's core blockchain with greater programmability.
The next chapter of cryptocurrencies?
bitcoin has long been seen primarily as “digital gold,” doing little more than basic transactions. In contrast, the ethereum network has earned a reputation for its smart contract functionality, with applications ranging from loans and borrowing to yield farming.
A wave of new upcoming projects is working to bring this type of programmatic flexibility to the bitcoin blockchain. Using techniques like the “Ordinals” protocol to embed data in the smallest unit of btc (the satoshi), developers are opening up new possibilities for creating tokens, smart contracts, and even decentralized applications (dApps) directly on the bitcoin network.
“It's a big unlock for bitcoin,” said Kyle Samani, co-founder of cryptocurrency investment firm Multicoin Capital, which recently led a $7 million funding round for Arch, a startup that is building a programmable platform on top of bitcoin.
According to the report, Arch, which is expected to be open to all developers starting this month, will allow applications built on the Solana blockchain to be ported to run on btc. About 20 teams are building Ordinal-based applications for lending, decentralized exchanges, and stablecoins.
Layer 1 Foundation is also developing a programmable module for the BRC-20 metaprotocol, which stores executable code directly on the bitcoin blockchain.
This approach is said to take advantage of btc's relatively longer block confirmation times, 10 minutes (compared to ethereum's 12 seconds), to allow for more complex calculations.
Can bitcoin's DeFi Ecosystem Overshadow ethereum?
Despite these advances, not everyone is convinced that bitcoin's programmability is the key to its next rally. Jeff Garzik, a former btc core developer, believes that Layer 2 scaling solutions will ultimately win because they can offer cheaper transaction costs than running applications natively on the network.
Still, proponents of programmable btc are betting that this new wave of decentralized finance (DeFi) applications could be a major growth driver. Toby Lewis, founder of OrdinalsBot, stated:
bitcoin's DeFi ecosystem could grow to become the largest of all cryptocurrencies. It is possible that the bitcoin DeFi ecosystem could grow to trillions of dollars in market capitalization in the coming years, and appears to be one of the main drivers of cryptocurrency growth in this cycle.
If these predictions come true, the community may have found the long-awaited catalyst to spark the cryptocurrency's next big price surge.
At press time, the largest cryptocurrency by market capitalization, is trading at $67,300, an increase of more than 7% in the last seven days.
Featured image from Shutterstock, chart from TradingView.com
