in Last adand Best in slotthe infrastructure company that powers some Bitcoin applications and Bitcoin wallets like Xverse and Liquidium, has revealed that its BRC-20s are getting an upgrade.
Called BRC2.0, it is expected to go live on the Bitcoin Testnet in the first quarter of 2025, with the aim of bringing “smart contracts” to the BRC-20S, allowing them to compete with Bitcoin Sidechain designs.
In short, the “BRC20 Programmable Module” is designed to “unlock infinite new use cases for native assets on Bitcoin – including seamless Defi, RWAS, DAOS, Stablecoins, and more – without relying on multiple bridges or L2S.”
After so many years in space, we can all agree that we’ve heard promises like this before. However, metaprotocols have one distinguishable feature: they are completely serial, rather than relying on completely separate chains with new trust assumptions. Sure, metaprotocols may not be the best way to decentralize Bitcoin’s token economy, but it’s a start.
Runes suffered from dramatically high expectations before its launch, and this is an opportunity for BRCS to make a comeback. Regardless of where you stand on tokens on Bitcoin, competition between different standards will ultimately bring greater efficiency and less bloat on the chain—something we can all agree is desirable.
The real question is this: For regular Bitcoiners who use Bitcoin purely as a monetary network, do we really need to go through this again? Congestion on the chain, useless pump and fragmentation schemes, high fees…
My answer is: Absolutely!
Memball has been “dead” for the better part of the last six months.
First, as Bitcoiners, we are supposed to support free markets. Having additional users to pay fees is the best possible outcome for Bitcoin’s survival. Miners have just passed through the other half, and keeping mining profitable is the only way to prevent centralization in the hands of subsidized actors (whether governments or financial markets – yes, miners issuing unlimited loans to buy machines won’t last forever).
For context, according to CoindeskSolana validators saw a record influx of over 100,000 SOL, worth $25.8 million, in fees and tips due to intense trading activity for Trump and Melania tokens.
Second, Pandora’s box has already been opened. Tokens on Bitcoin are here to stay. If users want additional programming ability, who has the authority to stop it? (Apart from the pro-cracker Thinkbois, of course).
As the Bitcoin ecosystem evolves, the introduction of the BRC-20 upgrade makes a compelling case for why it might outperform the Runes standard. Here are several reasons:
- The initial appeal of BRC2.0 lies in its promise of enhanced efficiency. With smart contract functionality, BRC-2.0 features can handle complex operations directly on the Bitcoin blockchain, potentially eliminating the need for additional layers or side companies. This could lead to more consolidated transactions, reducing on-chain bloat, an issue with Rune that has been criticized for initial hype and subsequent congestion. This efficiency could be a game changer for Bitcoin, providing a streamlined approach to tokenization without changing the security or decentralization of the underlying protocol.
- BRC2.0 is designed to integrate with existing Bitcoin infrastructure. Thanks to collaborations with the likes of the Layer 1 Foundation, it can improve user experience and interoperability. Unlike Runes, which has faced challenges in user adoption due to complex mining processes and poor UX, BRC2.0 aims to provide a more user-friendly interface for token creation and interaction. This could lead to wider acceptance and use, making Bitcoin a more attractive platform for developers and users alike.
My default stance on anything new related to Bitcoin is always caution. We’ll have to wait until the actual details of this new protocol are revealed, but I’m excited by the prospect of more efficient Defi use cases on Bitcoin — not on fewer chains.
If you’re still skeptical, I’ll leave you with this question: If tokens on Bitcoin are inevitable, what’s worse?
- metaprotocols using Bitcoin block space in exchange for fees, without changing network rules?
- Or Bitcoiners plugging hard-earned bitcoins into centralized, competing chains to access the same token markets?
As Maxi Bitcoin, I want all the fees. I want all users. Maxis Bitcoin Maxis should be Maxis for fees, as long as the basic ethos of the underlying network remains unchanged (looking at Litmeyyyyers).
tl; D.
- Wait and see what BRC2.0 has to offer. Will it really become programmable in a way that is secure enough for Bitcoiners to trust?
- Runes may become irrelevant if BRCS makes a real comeback, especially with better UX.
- Let miners rejoice with Degen fees.
- Tokens on Bitcoin without changing the rules are better than tokens on Bitcoin that require new opcodes or modified rules.
- Grateful to all Gigabrain Devs for building Bitcoin apps instead of Vaporware chains.
This article is a takes. The opinions expressed are entirely the author’s and do not necessarily reflect the opinions of BTC Inc or Bitcoin Magazine.
Articles I write may discuss topics or companies that are part of my firm’s investment portfolio (Robo management). The opinions expressed are solely my own and do not represent the opinions of my employer or its affiliates. I do not receive any financial compensation for these takes. Readers should not consider this content as financial advice or an endorsement of any particular company or investment. Always do your own research before making financial decisions.
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