The Bitcoin narrative is finally here in 2024 and with tons of developers building on Bitcoin this year, you should probably consider your next move in building on Bitcoin too!
Bitcoin's blockchain network provides a robust foundation for developers to build decentralized applications and solutions.
With upgrades like Taproot and supporting infrastructure, Bitcoin enables possibilities beyond just payments, like Ordinal NFTs and BRC20 tokens.
Read More: Top 7 DeFi Projects Using Bitcoin [2024 Review]
We currently provide direct support for builders looking to launch their products with our Launchpad.
In this article, we will dive deep into the top 5 reasons you should build on Bitcoin.
Building on Bitcoin refers to developing decentralized applications (dApps), smart contracts, and other solutions utilizing the blockchain as their foundational infrastructure.
Bitcoin was created to be "peer-to-peer" cash, enabling users to transfer value across the world to each other without the permission or censorship of centralized authorities such as banks or governments. Bitcoin was built to be simple, robust, and secure against government attacks. It hasn't changed much at all from when it began operating in 2009.
As crypto evolved developers who wanted to experiment with programmable blockchain technology created L1 such as Ethereum, while Bitcoin remained primarily a "store of value" comparable to holding digital gold. Developers and projects have sought to expand Bitcoin's capabilities without changing the core protocols through Bitcoin layers built on top of Bitcoin.
Read More: Top 5 Bitcoin Ordinal Marketplace | 2024 Reviewed & Tested
It wasn't until early 2023 when the Ordinals Protocol, and its mass popularity, shifted Bitcoin from purely a money layer into a data layer. The Ordinals Protocol enabled users to inscribe up to 4MB of data onto a satoshi, the smallest unit of Bitcoin, to create on-chain NFTs and eventually BRC20 tokens. This has opened the door to the possibility of building crypto ecosystems founded on Bitcoin's blockchain network.
By developing Bitcoin layer solutions, developers could create innovative decentralized solutions for finance, asset management, identity, supply chain tracking, etc—turning Bitcoin into both a valuable money layer and a data layer.
However, Bitcoin's base layer in its original form did pose certain limitations regarding transaction speeds, costs, and advanced scripting capabilities required for complex dApp development. Over the years, dedicated developers have constructed supporting infrastructure solutions to expand Bitcoin's capabilities.
January 2009: The first Bitcoin transaction.
January 2018: Lightning Network was introduced to enable lightning-speed Bitcoin transactions.
January 2021: The Stacks 2.0 goes live. Stacks make it possible for developers to build on top of Bitcoin. Stacks enabled us to build the best-in-class Bitcoin DeFi platforms where anyone can trade and earn Bitcoin securely.
January 2022: The launch of ALEX Bitcoin DeFi protocol on Stacks. ALEX enabled swapping, staking, yield farming, and access to emerging Stacks projects on its launch. ALEX would grow to become the top Stacks project and go on to become the most valuable Bitcoin DeFi protocol per CoinGecko.
May 2023: The launch of the B20 Orderbook on ALEX. B20 is the first Orderbook DEX for BRC20 tokens. B20 enables users to take Bitcoin L1 assets and use them with L2 programmability and scalability where they could place limit and market orders with instant confirmation through roll-up technology. The final settlement is always on Bitcoin.
Coming in 2024... sBTC, the most trust minimized representation of Bitcoin yet implemented on the smart contract layer. Create Bitcoin DeFi products backed by the most secure, decentralized blockchain and activate the world's largest and most liquid crypto economy.
Read More: sBTC: Design of a Trustless Two-way Peg for Bitcoin
Fun Fact: Transaction costs on the Bitcoin network can be far less expensive than Ethereum network fees, but that may change depending on network congestion.
Now that you know where Bitcoin is heading, building on top of Bitcoin should be a no-brainer!
Bitcoin remains the "king" of crypto in market cap, security, track record, and decentralization. The clearest value proposition in crypto is that Bitcoin has a market cap of over $500B, and less than .01% is deployed in DeFi. Ethereum, by comparison, has 27% percent of its $200B market cap in DeFi.
The reasons Bitcoin's DeFi TVL has lagged so far behind Ethereum are Bitcoin's fundamental limitations: Bitcoin's slower block times of ~10 minutes and, crucially, its lack of programmability. The inability of the Bitcoin L1 to support smart contracts has severely constrained its DeFi potential.
That's all changing now, thanks to Layer 2 solutions like Stacks. ALEX is at the cutting edge of this paradigm shift, building a Bitcoin DeFi layer where L1 assets are programmable and scalable.
Ordinals marked a paradigm shift in the history of crypto. Bitcoin became more than "sound money;" it was transformed into the ultimate data layer. For the first time, satoshis weren't sold just for their monetary value but for the information inscribed onto them.
Bitcoin blockspace is the most secure, indestructible, and valuable blockspace in crypto. In addition to Ordinals creating on-chain NFTs that are true "digital artifacts," inscription data has enabled new use cases we are actively helping develop.
The most successful has been the BRC20 standard, created as an experiment by @domodata to test if fungible tokens could be created on a fundamentally non-fungible blockchain (as every satoshi is numbered). BRC20 has been massively popular, accounting for 24M out of 29M ordinal inscriptions to date.
The importance of Ordinals to the Bitcoin ecosystem is hard to understate, with nearly half of all Bitcoin transactions in August consisting of inscriptions.
Bitcoin now resembles the early days of ERC20 tokens, and if history rhymes, the opportunity is massive. What if Ethereum was the test, and the most successful experiments were coming home to Bitcoin? Where would you want to build?
Beyond smart contracts, bridging, and security, one more facet is crucial to enabling Bitcoin DeFi: transaction confirmation speed. While Bitcoin's 10 to 15-minute block confirmations serve many purposes admirably, they fall short in the fast-paced world of DeFi.
To meet the demands of DeFi users and participants in early 2024, expect Stack's Nakamoto Release. This groundbreaking development will slash confirmation times from the current 10 to 15 minutes per block to a mere five seconds per block. This puts Bitcoin in line with Ethereum's transaction speeds, marking a game-changing enhancement for user experience.
Bitcoin is the most secure network in human history. Without the security and immutability unique to Bitcoin, DeFi will never achieve mass adoption. DeFi needs Bitcoin; with the security and immutability unique to Bitcoin, DeFi will be trusted enough to onboard $360 trillion in real-world assets.
And trust isn't something that has a launch date, trust doesn't come from a white paper; trust has to be earned and battle-tested over time. Bitcoin has a track record going back to 2008; it hasn't been exploited, the network hasn't had downtime, transactions haven't been reversed, it has survived multiple 80% drawdowns, and its core protocol is still very much the same as on day one. And PoW is at the core of success because PoW is to trust in the laws of physics. It anchors Bitcoin to the physical realm. We believe DeFi needs Bitcoin because trust and security are paramount for mass adoption.
ALEX launched a standalone DeFi but has evolved into the finance layer on Bitcoin, focused on seamlessly merging L1 assets with L2 programmability. Builders are encouraged to build Bitcoin DeFi on ALEX, where they will find the required funding, technology, community, and platform. The Bitcoin Lab ecosystem fund has been specifically created to address each of these facets:
Funding: The fund provides not only capital but also serves as a seal of approval, instilling confidence in other potential investors.
Technology: ALEX provides composable blocks of codes, APIs, and technical support to turn ideas into products, ensuring projects come to market successfully.
Community: A thriving community stands ready to engage with and support projects building on ALEX.
Platform: ALEX offers a platform where projects can launch, grow, and access a network of partners, including market makers, infrastructure providers, and exchanges.
The ALEX Layer forms a complete value chain, immensely attractive to both builders and community members.
It's a win-win scenario where projects find not just financial support but also a nurturing environment to thrive and hit the ground running through unified liquidity across applications.
Bitcoin holds immense potential for the development of decentralized finance (DeFi) apps that replicate traditional financial services in a transparent peer-to-peer manner.
DeFi solutions built on Bitcoin's blockchain can enable lending platforms, derivatives trading, insurance, wallet services, and more.
In case you missed it, ALEX is also a DeFi built on top of Bitcoin.
By incorporating Bitcoin assets and smart contract capabilities offered by layers like Stacks, DeFi apps can conduct programmable and automated transactions. This eliminates rent-seeking intermediaries while enhancing efficiency and interoperability.
Developers can harness Bitcoin to develop open and inclusive financial products that grant underbanked populations access to essential services. Regulated institutions can also leverage Bitcoin's network to develop compliant and secure decentralized finance applications.
Bitcoin provides a robust and immutable foundation for creating non-fungible tokens (NFTs) - irreplicable digital assets representing ownership of unique items like art, music, collectibles, virtual real estate, and more.
NFTs minted on Bitcoin can take advantage of its security and reduced risk of network downtime to reliably record ownership and trade digital collectibles and assets. Bitcoin NFT projects also gain access to crypto-savvy user groups already present on Bitcoin's network.
Read More: Top 10 Ordinal Inscriptions Project in 2024
Furthermore, solutions like Stacks enable metadata attachments to NFTs minted on Bitcoin, opening up possibilities like dynamic NFT art and tokenized in-game assets. The reliability and reach of Bitcoin's ecosystem can propel innovative NFT use cases.
Through Bitcoin layer solutions that provide scalability and smart contract support, developers can build feature-rich decentralized applications (dApps) on the Bitcoin blockchain beyond just DeFi and NFTs.
These can include decentralized identity platforms, supply chain trackers, trustless voting systems, verifiable credentials, tokenized securities, real estate, transparent auditing tools, as well as apps for e-commerce, social media, and data storage.
Bitcoin enables all the benefits of dApps, like removing central authorities and intermediaries while retaining user control over assets and identity. Building on Bitcoin also allows leveraging its security and community support for accelerated dApp adoption.
Bitcoin's stability, security, mainstream adoption, and supporting infrastructure make it the foremost foundation for building decentralized apps. Although originally intended solely for peer-to-peer payments, Bitcoin now enables a new generation of developers to use it as the foundation for creating decentralized and trustless applications that were not previously possible.
From DeFi to NFTs to identity management, Bitcoin's capabilities empower developers to build an open and programmable financial system and digital economy. By tapping into the platform's strengths, developers can pioneer dApps that deliver greater transparency, inclusion, and user control to their target audiences. Building on Bitcoin unlocks a future driven by digital independence and decentralization.
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