Following the launch of the first spot Bitcoin exchange-traded funds (ETFs) in January and the halving event last month, cryptocurrency investors have been waiting for the next major catalyst to push Bitcoin to new heights beyond the current record of $73,700, which was set in March. 14.
According to the latest Bloomberg a reportFor a growing group of developers, the answer may lie in improving the underlying cryptocurrency blockchain with greater programmability.
The next chapter in cryptography?
Bitcoin has long been viewed primarily as “digital gold,” doing little beyond basic transactions. In contrast, the Ethereum network has gained a reputation for its efficiency Smart contract Jobs, with applications ranging from lending and borrowing to yield farming.
A wave of new upcoming projects are bringing this kind of programming flexibility to the Bitcoin blockchain. By using technologies like the “Ordinals” protocol to encapsulate data into the smallest unit of BTC (a satoshi), developers are said to open up new possibilities for creating tokens, smart contracts, and even decentralized applications (dApps) directly on the Bitcoin network.
“It's a big step in unlocking bitcoin,” said Kyle Samani, co-founder of cryptocurrency investment firm Multicoin Capital, which recently led a $7 million funding round for Arch, a startup building a platform. Programmable platform On top of Bitcoin.
According to the report, Arch, which is expected to be opened to all developers as early as this month, will allow applications built on the Solana blockchain to be ported to run on Bitcoin. About 20 teams are building pecking order-based applications for borrowing and lending, decentralized exchanges, and stablecoins.
The Layer 1 Foundation is also developing a programmable module for BRC-20 metaprotocol, which stores executable code directly on the Bitcoin blockchain.
This approach is said to take advantage of Bitcoin's relatively longer block confirmation times, of 10 minutes (compared to 12 seconds for Ethereum), to enable more complex calculations.
Can Bitcoin's DeFi Ecosystem Overtake Ethereum?
Despite these developments, not everyone is convinced that Bitcoin's programmability will be key Next gathering. Jeff Jarzyk, former Bitcoin core developer, believes that Layer 2 scaling solutions will win out in the end because they can provide cheaper transaction costs than running applications locally on the network.
However, proponents of programmable Bitcoin are betting that this new wave of… Decentralized finance DeFi applications can be a major driver of growth. Toby Lewis, founder of OrdinalsBot, said:
Bitcoin's DeFi ecosystem could grow to the largest in all cryptocurrencies. The Bitcoin DeFi ecosystem could grow to trillions of dollars in market capitalization over the next few years, and appears to be one of the main drivers of cryptocurrency growth in this cycle.
If these predictions come to fruition, the community may have found the long-awaited catalyst to ignite the next big spike in cryptocurrency prices.
As of press time, the largest cryptocurrency by market cap is trading at $67,300, up more than 7% in the past seven days.
Featured image from Shutterstock, chart from TradingView.com