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Bitcoin: What will be the next narrative of the Bull Run?

Sat 10 Feb 2024 ▪ 4 min of reading ▪ by Fenelon L.
Getting informed Event

The approval of Bitcoin Spot ETFs and the advent of Ordinals are two major steps toward mainstream adoption. However, network congestion could hinder this momentum. Fortunately, layer-2 innovations like the promising ICP integration could unlock the full potential of the flagship cryptocurrency.

un torraux qui coupe ses chaines ullistant le bull run du bitcoin

New catalysts for mass adoption

The approval of Bitcoin ETFs marked a decisive moment in the crypto’s journey toward widespread adoption. In parallel, the rise of Ordinals has extended the scope of Bitcoin beyond its initial function as a mere payment method, sparking increased interest in the ongoing development of the underlying ecosystem, often described as “Building on Bitcoin.”

However, this surge in popularity faces the recurring problem of limited network capacity, leading to increasing saturation of transactions. Just last year, the explosion of Ordinal inscriptions was responsible for the majority of the volume, causing significant slowdowns and exorbitant fees.

In December 2023, Bitcoin transaction fees reached a notable peak of 23.6 million dollars in one day. And despite stellar activity, about 249,000 transactions remained stuck awaiting validation. At that time, Ordinals accounted for up to 50% of the total daily transactions on the Bitcoin blockchain.

Explosion of Layer-2 innovation

Inspired by the success of Ethereum’s layer-2 solutions, a similar momentum is forming around Bitcoin. Multiple projects are emerging with the aim of extending the functionalities of the original network, while preserving its high level of security.

The advent in 2022 of Ordinals, which allows the inscription of all kinds of data on the Bitcoin blockchain, has greatly energized the developer community. Thus, we are witnessing a creative effervescence comparable to Ethereum’s golden age.

Among the emerging promising technologies, let’s mention the Lightning Network for instant transactions at very low cost, as well as the MintLayer and Stacks sidechains, dedicated respectively to decentralized finance (DeFi) and smart contracts.

In short, this new generation of layer-2 technologies is full of promise. It could unlock all the untapped potential of the Bitcoin network, propelling its development to new heights.

Bitcoin: At the crossroads with ICP and Layer-2 innovations

One of the most promising initiatives is the native integration of Bitcoin with the ICP blockchain. Rather than using inter-chain bridges, this approach allows developers to directly access Bitcoin capabilities through smart contracts.

The ckBTC token resulting from this integration is already a success, with more than a million transactions to its credit. Most importantly, this direct interaction with the base layer effectively resolves the problems of network congestion.

Thus, the ICP integration combines the smoothing of traffic with the addition of sophisticated functionalities on Bitcoin itself. An ideal solution to accompany its growing adoption, both by individuals and by professionals or institutions. And perhaps the missing ingredient to trigger a new historic bull run!

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Fenelon L. avatar
Fenelon L.

Passionné par le Bitcoin, j'aime explorer les méandres de la blockchain et des cryptos et je partage mes découvertes avec la communauté. Mon rêve est de vivre dans un monde où la vie privée et la liberté financière sont garanties pour tous, et je crois fermement que Bitcoin est l'outil qui peut rendre cela possible.

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.