I’ve been thinking about this a lot lately: Bitcoin Layer 2 institutions need to start holding Bitcoin in their vaults. It makes perfect sense for them not to do so.
and Apparently I’m not the only one.
As someone who has watched this space develop, let me explain why Bitcoin Layer 2 institutions should listen to it. sire And I.
For many years, Bitcoin has been known as the “digital rock” – a solid store of value but nothing more. But now with the explosion of Bitcoin’s second layer, Bitcoin has become a “programmable rock.” These layers add functionality like smart contracts and scaling solutions, making Bitcoin more versatile than ever before.
But here’s the thing: These projects raise millions of dollars from venture capital firms and investors, and most of that money ends up in fiat currencies like the US dollar. This is a big mistake.
Why? Because fiat is an ice cube that melts. every year, He loses 5-10% of its value due to inflation. The longer you keep it, the less it is worth. Bitcoin, on the other hand, has a compound annual growth rate (CAGR) of about 70%. If these institutions kept their treasuries in Bitcoin instead of fiat currencies, their runway would not only stay the same, but grow.
Imagine having 70% more resources each year to fund developers, grants and projects. This is the kind of edge that can make or break a Layer 2 ecosystem.
Okay, okay, I get it – Bitcoin is volatile, and these fundamentals need some stability. For this reason, maintaining the runway for 3 to 4 years makes sense. It would help cover short-term needs. But the rest? It should be in Bitcoin. In the long run, this strategy can double or even triple these organizations’ runway, giving them the time and resources they need to succeed.
There is precedent for this too. He remembers Eos? They raised $4.2 billion In 2018 it is said to have been purchased 164,000 Bitcoin With her. Today, Bitcoin is worth around $16 billion, although EOS itself has fallen off the map. Now, imagine if Bitcoin Layer 2 organizations did the same thing but actually used their Bitcoin to grow and maintain their ecosystem. The potential is huge.
Ultimately, these foundations depend on Bitcoin. They believe in its future, so why not keep it in their closets? Bitcoin is the best store of value out there. If you are running a Bitcoin Layer 2 basis, stop holding low-value fiat currencies, and start holding Bitcoin. It’s not just a smart move, it’s just that the It moves.
This article is a takes. The opinions expressed are entirely those of the author and do not necessarily reflect the opinions of BTC Inc or Bitcoin Magazine.
Comments are closed, but trackbacks and pingbacks are open.