Bitcoin is about to undergo a major upgrade? A brief introduction to Bitcoin’s soft fork Thunderbolt

Original author: 527 (X: @Eth527 )

This is a hardcore article, but I have observed that a huge narrative is quietly brewing. Many people don’t know that BTC has completed a significant soft fork, Bitcoin Thunderbolt, which means that Bitcoin has introduced native programmability. Those who understand will naturally understand what this means, and those who don’t will understand after reading this article. Big things are coming!

1. The Dilemma of Lack of Native Scaling Solutions

Bitcoin is renowned worldwide for its unparalleled security, but the limited scalability has prevented the value of assets on the Bitcoin chain from being fully realized. The launch of the Ordinals protocol has stimulated peoples expectations for Bitcoins expansion potential and brought new development opportunities to the Bitcoin ecosystem. In this context, multiple expansion plans have emerged, trying to release the potential of on-chain assets and promote the prosperity of the on-chain ecosystem.

However, existing expansion plans often sacrifice the originality of Bitcoin and introduce additional trust costs and security risks. Although these plans attract a small number of users through incentive mechanisms and stimulate a certain market enthusiasm in a short period of time, as the incentives fade, these participants also lose interest and gradually leave. For example, Babylon, which recently suffered a Waterloo, withdrew more than 21 million US dollars worth of BTC from the agreement just 24 hours after the airdrop went online. The reason is that Babylons technical solution requires BTC to be locked in exchange for side chain assets, and the main chain Bitcoin assets cannot be used directly. This path weakens the appeal to native Bitcoin users, and participants leave as soon as the airdrop is in hand.

The same is true for another popular project, Bitlayer, which was promoted as the fastest growing Bitcoin Layer 2. However, after its crazy incentive mechanism ended, the boom was gone because participants were more concerned about short-term gains rather than long-term use in the ecosystem. Because Bitlayer users need to convert BTC into on-chain tokens through a custodial bridge, this means strong reliance on third-party custody and potential risks. Once it is unprofitable, users will quickly transfer their BTC.

In summary, it turns out that scaling solutions that deviate from nativeness have very limited appeal to Bitcoin users and are not real solutions.

2. Native Enhancement: The Real Direction of Bitcoin Expansion

Experts are increasingly aware that only by working directly on the Bitcoin protocol level can we truly break through the bottleneck. Among them, the ideas represented by @nubit_org are attracting attention. Nubit has promoted Bitcoin Thunderbolt, a soft fork of the Bitcoin base layer, which directly modifies the Bitcoin protocol to provide higher transaction speeds and programmability. For example, through UTXO Bundling technology, the transaction speed is 10 times faster than traditional Bitcoin; for example, the introduction of OP_CAT opcodes supports the development of applications directly on Bitcoin to achieve native programmability; for example, Goldinals integrates standards such as BRC-20, Runes and Ordinals to unify asset protocols; and BitMM realizes trustless on-chain transactions.

This expansion is on the main chain, that is, native BTC can directly participate in smart contracts and transactions without the need for cross-chain packaging substitutes. Nubits native expansion solution does not require a traditional cross-chain bridge, its verification is completely completed on the chain, and there is no third-party custody risk.

3. Comparison of the advantages and disadvantages of the paths

In order to help readers better understand the differences between native expansion solutions and other expansion solutions, we have made a table for you to see:

Combining these, we can find that the advantages brought by native are all-round: no intermediary is required in terms of security, the trust cost is almost zero, the liquidity of Bitcoin is not wasted in asset utilization, and the ecological development resonates with the growth of Bitcoin. Of course, the challenge of the native solution is that it is difficult to implement, and it often requires consensus from the Bitcoin community (such as soft fork upgrades) to be implemented. This makes the native path slower in advancement and requires strong technical demonstration and community mobilization capabilities.

IV. The Importance of “Nativeness” to Bitcoin’s Value Capture

In addition to the feasibility of the expansion plan, nativeness is also very important for promoting the value of the Bitcoin ecosystem.

1. Security spillover effect:

Non-native expansion solutions allow a large number of transactions and fees to occur on other chains, and only a small number of lock/unlock transactions can be seen on the Bitcoin mainnet. Bitcoin itself does not gain revenue from these Layer 2 transactions, and in the long run, it cannot directly improve the security and value support of the mainnet. Native expansion solutions allow transactions to occur on the Bitcoin mainnet, and each transaction brings fee income to Bitcoin miners, thereby strengthening the security budget and computing power stability of the Bitcoin network. This effect is particularly critical for Bitcoin to maintain security only through fees after the future halving.

2. Value attribution:

Babylon and Bitlayer both have their own native tokens, which serve as payment fees or governance functions. Part of the ecological value is captured by these new tokens, diluting BTCs position as the only value carrier. For example, Babylon users are more concerned about the price and income of BABY tokens rather than the price of BTC itself; running DeFi on Bitlayer may bring fire to the contract tokens and governance coins on its chain, while BTC only exists as collateral. In the long run, if Bitcoins innovation dividend is taken away by other tokens, it will not be ideal for pure BTC investors. The native expansion plan uses BTC directly as the pricing and settlement asset for all applications. Whether issuing tokens, NFT or running decentralized applications, BTC is consumed at the bottom. The demand for BTC rises with the prosperity of applications, and BTC holders benefit from this ecological growth.

In general, native means that the value of Bitcoin itself can participate and amplify, while non-native means that the value may spill over. For investors who believe in the long-term value of Bitcoin, the native solution is undoubtedly more in line with their interests.

5. Final Words

By comparing the existing expansion solutions, the native expansion path shows its unique advantages, which not only solves the bottleneck of Bitcoin expansion, but also maintains the security and trustlessness of Bitcoin. This huge innovation is nurturing a narrative with great explosiveness, which is very worthy of further analysis and follow-up by all investors. As the implementer of Bitcoin Thunderbolt, Nubit represents the native expansion that has brought a major upgrade to Bitcoin, becoming the first Bitcoin project recognized by HSBC in its latest report.

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