bitcoin Maxis is patting itself on the back after the launch of the Taproot Assets protocol for bitcoin and Lightning. And they are absolutely right to do so.
Lightning Labs' mainnet Alpha launch last month was big news. Until now, ethereum and Tron dominated smart contracts. Now, with this latest protocol, bitcoin is poised to challenge its dominance and bring new vigor to the network. This new feature will equip developers with the tools necessary to make bitcoin a multi-asset network, allowing users to hold real-world assets like gold on the bitcoin blockchain, marking a critical moment for the evolution of bitcoin. bitcoin.
But Lightning's Taproot assets have even broader consequences than they initially received. With the upcoming bull market heating up on the sidelines, demand for various use cases is intensifying. This will create huge opportunities for both networks and developers. A diverse ecosystem will not only expand the global reach of blockchains, but will also foster an environment of interfunctionality that itself will generate new use cases.
bitcoin may have entered a new stage in its development, but it is not just bitcoin that will benefit from this. Instead of viewing Web3 as a zero-sum game, isn't it time we eschew maximalism in cryptocurrencies and welcome an industry that supports a broad and healthy ecosystem?
ethereum or bitcoin? Or none?
The ethereum platform has been, until now, the de facto platform for ethereum–eth/#statisticChapter”>smart contracts and DeFi. As the world's largest cryptocurrency by market cap, if bitcoin extends its role beyond simply being a store of value and ventures into the realm of smart contracts, it could upset ethereum's position. But this does not mean that it will definitely become a leader in this field.
With the pace of technology pushing Web3 to the forefront of many sectors, innovation houses around the world are racing to keep up with the demand for Web3 solutions. An isolated network cannot hope to build the future of Web3 alone. Rather than viewing the development of a second major multi-asset chain as a change in Web3 ranking, this is rather an opportunity for the industry to diversify.
Ryan Gentry, director of business development at Lightning Labs, shared his thoughts in a recent interview on how Taproot Assets will contribute to a “web-like network of tunnels” that increases the network's capabilities: “When I think about the lightning network from an infrastructure perspective, I think of it in the same breath as electric power networks , pipelines, fiber networks. “This is mission-critical infrastructure, or it will be mission-critical infrastructure for the world.”
This idea of a network of tunnels spanning the Web3 reminds us of Metcalfe's law, a term initially proposed by Bob Metcalfe, inventor of Ethernet, who described the network effect as a centripetal force that It makes networks more valuable the more things they connect. Essentially, the more people who join a network, the more likely other people will join. Social media is the biggest example of this, but this phenomenon will become increasingly important on Web3 as we witness the emergence of greater use cases.
While it is true that the network effect can help existing projects and networks maintain their competitive advantage, the demand and popularity generated by one group can also have a similar impact for others.
Diversification is key to Web3 success
Web3 thought leaders in the space were quick to share their opinions on Taproot Assets, primarily focusing on how this will benefit bitcoin's scalability. But while many Web3 experts may converge on bitcoin as a standard, the reality is that the future of Web3 is broader than most of us will ever experience. Antoni Trenchev, co-founder of Nexo, spoke about the broader implications of Taproot Assets in a recent cheep: “Think about the overall scalability of the ecosystem – imagine how many more users and transactions blockchain companies can process with a second major multi-asset chain. This is a hidden gem for adoption. It is not bitcoin OR ethereum, it is bitcoin AND ethereum.”
Those who believe that bitcoin is the only blockchain-based digital asset that will be needed in the future cannot foresee the use cases that will require niche blockchains as well as major multi-asset chains to support them. Beyond financial solutions, Web3 is experiencing a boom that is pushing it into almost all areas of technology, revolutionizing the entire economy. Hundreds of billions of capital are locked up in bitcoin, much of it as a passive store of value, and demand for use cases around bitcoin is increasing. Rather than competing with bitcoin, other Layer 2 protocols, such as Stacks and Liquid Network, provide novel use cases for bitcoin holders. And many more Layer 2s are emerging, seeking to tap into the hundreds of billions of capital that currently sit idle.
Surviving the new digital age
As the economic landscape of our world changes, driven by advances in artificial intelligence, machine learning and other technologies, it is increasingly clear that Web3 will be a centrifugal force in the new digital age, opening the door to new innovations and business models. This large-scale adoption will require diverse networks and infrastructure that support future use cases. As important as healthy competition is for disruption, the industry must ensure that it also champions inclusivity and fosters the community on which it was built. bitcoin maximalists, or anyone who believes in a single-chain monopoly, need to take a step back and look at the bigger picture: network scalability is not as valuable as ecosystem scalability. Having more than one major network is not only valuable, it is essential for Web3 to grow and its many startups to have a better chance of success.
This is a guest post by Sadie Williamson. The opinions expressed are entirely their own and do not necessarily reflect those of btc Inc or bitcoin Magazine.
