At the recent Bitcoin++ Developer Conference in Austin, Texas, Bitcoin Magazine’s Alex B. sat down with Boltz’s Michael and Ark Labs’ Thiero to discuss the latest developments in Bitcoin’s technology ecosystem, with a particular focus on the Lightning Network, Liquid, and emerging technologies like FLAC.
The journey of lightning and its challenges
Reflecting on the Lightning Network’s journey, Michael shared his insights into the challenges it faces, especially in high-fee environments. “The biggest blind spot that’s been glaringly apparent lately has been like in a high-charge environment, where lightning tends to do a lot of damage,” he said. He detailed the difficulties posed by higher fees and the need for better preparation and solutions, such as moving operations to different chains via submarine swaps.
Tero highlighted the underappreciated challenge posed by Lightning infrastructure. He noted the need for innovative designs that use Lightning to connect different layers, including Fedimint, Liquid and Ark, to enhance the user experience. “Lightning will always be the way to connect all these new ideas,” Tero said.
The contested role of the questioner
Despite its relatively modest adoption compared to other technologies, both Michael and Tero acknowledge that Liquid has proven to be a stable and reliable platform. “The liquid has been around the block. It’s known and it’s been around. It’s still around today,” Michael stated, noting the platform’s resilience and reliability over time. This stability is critical for developers looking to create and experiment with new solutions without the risk of frequent disruptions.
Ark Labs’ Tiero expanded on the benefits of sidechains like Liquid, highlighting their ability to reduce congestion on the Bitcoin main chain. “Having a sidechain with clear swaps can relieve pressure on the mainchain,” he said, stressing that Liquid’s architecture offers distinct benefits, including lower transaction fees and faster processing times. This can be particularly useful in high-fee environments, where moving operations off the main chain can result in significant cost savings.
Michael also addressed the competitive landscape for new blockchain proposals, emphasizing that Liquid’s established track record provides a level of trust and predictability that newer solutions may lack. “In the grand scheme of things regarding the new proposals to come, I think Liquid is here to stay for at least a long time.”
Emerging standards and interoperability
Discussing fragmentation within the ecosystem, Michael from Boltz explained the critical role his company can play in providing cross-chain liquidity and services. This ability to facilitate swaps between different Bitcoin layers, such as Lightning, Main Chain, and Liquid, is essential to maintaining a smooth, interconnected ecosystem. By offering these services, Boltz helps bridge the gaps between different platforms, making it easier for users to transfer assets seamlessly.
Michael also stressed the importance of maximizing competition between service providers to ensure users receive the best market rates. “Eventually, open specifications will make sense, but we are still very early in the process,” he noted, highlighting the need for experimentation before moving toward standardization. This experimentation phase allows for the identification of best practices, which can then guide the development of standardized protocols.
Ark Labs’ Tiero echoed Michael’s sentiments, adding that the diversity of user needs makes it difficult to establish global standards at this stage. “Every company has its own user and sensitivity to its user.” He suggested that a larger, more diverse ecosystem would justify efforts to standardize, but even then, companies need the flexibility to innovate and respond to their specific user bases.
They both agreed that the current priority is to allow companies to experiment and innovate freely. “We can move much faster if we can try things ourselves and see where it goes,” Michael said. This approach allows for rapid iteration and adaptation, fostering a stronger and more resilient ecosystem in the long term.
Innovate with ARK
Tiero from Ark Labs provided an exciting glimpse into their latest project, Ark. “ARK is still in the post-concept stage.” He explained that the focus is on creating a protocol that integrates seamlessly with existing technologies such as Lightning, ensuring that it can effectively meet the needs of its users.
“We’ve been successful in showing that it’s doable, that it works,” Tero noted. “The thing I think the next step is going to be really trying to understand the real use cases that are in high demand.” By focusing on practical applications and real user needs, ARK aims to create a robust and easy-to-use protocol that addresses current limitations in the ecosystem.
Experimentation is a key part of ARK’s development strategy. Tero stressed the importance of testing in flexible environments such as Liquid before finalizing detailed specifications. “Let’s go to where it’s very flexible and Liquid has introspective code at the extreme level so you can really implement recursive conventions,” he explained. This approach allows the team to explore the full potential of the protocol and make necessary modifications based on real-world applications and feedback.
Michael noted the uncertainties surrounding ARK’s future use cases and liquidity requirements. “It’s also like the unknown unknown again. In theory, this is interesting for providers who have liquidity anyway,” he said, stressing the need for further exploration and development.
Optimism about the future of Bitcoin
At the conclusion of the discussion, both Theroux and Michael expressed a strong sense of optimism about the future of Bitcoin layers and covenant technology. Teru, in particular, was optimistic about the progress made in Covenant technology, seeing it as a transformative force for enhancing protocols such as ARK and Lightning. “I’m very optimistic after these two days because for the first time, all the people who work with Covenant in production or in general, are very knowledgeable about the topic.” He celebrated the opportunity for experts to come together to discuss and improve these ideas in a collaborative environment conducive to groundbreaking innovation.
They also praised specific proposals, such as the Rusty Russell Restoration Project, which aims to systematically enhance Bitcoin’s script capabilities. “The Rusty model gives us something to talk about, a frame of reference for what these conventions mean from an algorithmic perspective, and like I said, you can actually restore the Bitcoin script to its former glory in a safe and sensible way,” Michael said.
