Crypto is about to change from the ground up. Thanks to rollups and BitcoinOS’s technology, Bitcoin can now power any blockchain application — including everything built on alternative Layer 1s (aka “altchains).
With this game-breaking technology, Bitcoin will undergo an explosion of innovation much like the altcoin system before it – but at a much greater scale and speed.
Why Non-Bitcoin L1s Exist
We’ve said it before, but it bears repeating: chains like Ethereum and Solana only exist to fulfill the roles that Bitcoin was, until now, technically incapable of.
Namely, these chains were built for programmability and scalability respectively. They’re designed to be large shared computers capable of running software on top of a blockchain network – and this they do very well.
The Ethereum Virtual Machine (EVM), in particular, has become the standard for working with smart contracts. There’s been an incredible amount of useful (and not-so-useful) experimentation in this ecosystem over the past decade.
The role of these L1s has been similar to the one that Linux played in the early days of personal computing. We can think of any of them as a sandbox operating system for builders to tinker with and figure out what’s possible with this new technology.
Ethereum solved programmability, and networks like Solana tagged along with derivative, lower-resolution versions of it. We built blockchain networks to run a bunch of experimental software, albeit slowly. The next question was how to do this at scale and get web3 applications in the hands of everyday users who are used to the speed and accessibility they get from web2 applications.
Revisiting the Scalability Trilemma
Scalability, however, was a tough puzzle to solve. Developers were long stumped by the blockchain trilemma – the challenge for a blockchain network to simultaneously achieve scalability, security, and decentralization.
The crypto community spent years experimenting in search of a way around this issue. Ethereum tried many different approaches including sharding and sidechains, though these methods proved either technically infeasible or overly centralizing. While L1s like Solana have achieved high scalability at the base later, the network’s centralized infrastructure has led to multiple network outages.
Eventually, the Ethereum community settled on rollups as the best way to scale with minimal tradeoffs. ZK rollups specifically are an optimal Layer 2 solution for running software off-chain while maintaining all of the security and decentralization guarantees of the Layer 1 chain they’re running on.
Rollups were such a good solution that the Ethereum community decided to pivot to a modular approach for scalability. The agreement was that Layer 2 networks would take care of scaling, and Layer 1’s mission would be to keep the network secure and decentralized.
Rollups Can Work Better on Bitcoin
The beauty of rollups as a scalability solution, however, is that they can be implemented on almost any network. They’re not particular to any ecosystem and they can make any blockchain network scalable, including Bitcoin. More importantly, they allow any blockchain network to run software, too — even software that’s impossible to build at the base layer alone.
For rollups to work, an L1 blockchain must be capable of zero-knowledge cryptography. For well over a decade, Bitcoin was thought incapable of such a technical feat. However, in July 2024, the BitcoinOS team announced that it had finally verified the first ZK proof on the Bitcoin mainnet, completing the verification process at block 853626.
This changed everything. In one block, Bitcoin went from a payments-only blockchain network to a network that could support all of the programmability in other networks, at scale, via ZK rollups. Not only do rollups allow us to deploy any VM on Bitcoin, but they establish a new paradigm for how we can upgrade Bitcoin, now and in the future, without depending on base-layer hardforks or softforks.
Crossroads: Do We Need Anything Besides Bitcoin Now?
What happens when we can run decentralized applications, at scale, on any blockchain network thanks to rollups? It means that the crypto ecosystem can pivot from fragmentation into consolidation, uniting its development on a single network.
The choice of which L1 to use boils down to two things:
- Which network is better at guaranteeing security and decentralization?
- Which network has a better hold on the market?
Regarding the first point, Bitcoin’s hashrate security is overwhelmingly superior to any other blockchain, and has no meaningful rivals. Furthermore, its small block size and absence of centralized leadership make it a picture of decentralized stability, and the most dependable foundation for building digital financial infrastructure that lasts for centuries.
When it comes to market forces, the answer is even simpler. After 15 years, BTC is still more valuable than every other cryptocurrency combined despite its historically limited programmability.
Bitcoin is the largest, most robust network by almost every meaningful metric including market capitalization, live time, network activity, or number of active nodes. It boasts immense network effects that altchains simply cannot overtake.
Until now, Bitcoin’s only limits were related to limited programmability. But that’s about to change with rollup bridges, and the BitSNARK technology that BitcoinOS just took open-source. All software created to run on programmable altchains will be reconstructed on specialized Bitcoin rollups, and be supported by a network that was designed to be secure and decentralized.
But that’s not all. All rollups built atop BitcoinOS will also be seamlessly interoperable. They will share users and liquidity, thereby strengthening Bitcoin’s network effects and avoiding the fragmentation issues plaguing the crypto ecosystem today.
As such, BitcoinOS will unite the crypto ecosystem around Bitcoin’s superior capital and userbase, with all rollups feeling like an effortless extension of Bitcoin itself – the ultimate blockchain.
Bitcoin’s Generational Opportunity
Thanks to BitcoinOS, crypto investors will soon be able to access top-tier applications in the Bitcoin ecosystem, using BTC alone as their gas token.
Builders will also flock to Bitcoin, as deploying applications on the largest chain means access to a wider user base, more available capital, and better infrastructure.
There’s a saying for situations like these: if you can’t beat them, join them. As Bitcoin makes its ultimate comeback, altchains are already eager to plug in and deploy as rollups on BitcoinOS, strengthening the rich functionality and dominance of the Bitcoin network – and all of crypto by extension.
This is a radical change that many in crypto aren’t prepared for. But with change comes tremendous opportunity – one which includes a massive capital rotation back into the Bitcoin ecosystem.
BitcoinOS will usher in a new generation of programmable assets, kickstarting a new wave of tokens and opportunities built atop the world’s best blockchain.
Next up, we will discuss the history of altcoin ICOs, where they’ve gone wrong, and the promise coin offerings still hold for the future of crypto. Stay tuned!
