On August 1, BlockBeats invited Waterdrop Capital co-founder Jademont, exSat Network Marketing & BD, and TerpLayer CEO Eason to discuss the future direction of the crypto market and what opportunities there are. The following is a summary of the transcript of this Space.
Blockbeats: Thank you all for coming to BlockBeats today. Please give a brief introduction of yourselves.
Jademont: Hello everyone, I am Dashan from Waterdrop Capital. I just attended the Ethereum event, but today's theme is the Bitcoin Ecosystem Conference. I regret not being able to attend the conference in the United States due to visa issues, but some colleagues went there. But I have been following the speeches at this conference, and have read the summary reports of almost all speeches, and have also investigated the backgrounds of some speakers. Waterdrop Capital is considered the first wave of Token Funds in China, and has witnessed the ups and downs of China's blockchain industry over the years. Fortunately, we are still active in the market. Two years ago, we began to focus on investing in the Bitcoin ecosystem, and we are very happy to share with you some of the latest developments in the Bitcoin ecosystem here.
Deng Deng: Hello everyone, I am Deng Deng, a long-term value investor of BTC and an explorer in the field of NFT. I am currently responsible for exSat's marketing and business development in the Asia-Pacific region. exSat is a 1.5-layer solution based on the BTC native layer and many Layer 2s. It mainly synchronizes all block data of the BTC native chain through the dual mechanisms of POS (Proof of Stake) and POW (Proof of Work), while providing a decentralized index of the entire chain. The main reason why we developed this project is to create a BTC bionic chain that can run smart contracts and support various Layer 2 accesses. The main purpose is to achieve the extension of the entire BTC ecosystem. Therefore, at the Nashville conference this time, exSat made its debut and took the opportunity to release the test network and officially announced a group of partners. If you are at the conference, you can see that we have booked a fairly large booth. We will introduce the specific content of this project in detail later.
Eason: Hello everyone, I am Eason, CEO of TerpLayer. I am very happy to have the opportunity to introduce our project to you and communicate with you today. TerpLayer is a 1.5-layer protocol built on the Bitcoin network. Some off-chain services and applications are mainly developed based on Bitcoin's first-level network (Layer1). At present, we focus on two technical points. One is based on Bitcoin's visual state tree. We hope to realize the query of Bitcoin's global state through off-chain services, including asset expansion and fast verification. The second is an improved version of Bitcoin cross-chain atomic exchange, which is similar to the mechanism of transaction packaging, and can realize 1: 1 EVM transactions and 1: 1 Bitcoin transactions. It can achieve effects similar to rollback and paired confirmation, that is, both transactions are either confirmed by the network or not. Thank you for the invitation from BlockBeats and give us this opportunity to introduce our project.
Blockbeats: The biggest hot topic in the market recently is the Bitcoin Conference held in Nashville, where Trump also made many "pro-crypto" remarks. Several of our guests have just returned from the event, so today's Space also invites guests to share their overall feelings about the Nashville Conference. What are the highlights of the conference that are worth paying attention to? What impact does Trump's speech at the conference have on the Bitcoin market?
Jademont: First of all, I want to talk about the location of this Bitcoin Conference. This is the first time that the Bitcoin Conference is held in Nashville, instead of Miami. The reason for choosing Nashville is that the headquarters of the organizer of the Bitcoin Conference is here. In addition, Nashville is also the birthplace of American country music and the hometown of the famous singer Taylor Swift.
In the past, the Bitcoin Conference was always held in Miami. Every time, it was like a super party with a very warm atmosphere, but it was also criticized for being too casual and not serious. Another reason was that the mayor of Miami was not friendly to cryptocurrencies, so the organizers decided to move the conference to Nashville. Although the number of participants in this conference was less than before, it is still one of the largest conferences in the global Crypto, with an estimated 20,000 to 30,000 participants, which is larger than other conferences such as TOKEN2049 and Consensus.
In May this year, David Bailey, CEO of Bitcoin Magazine, held an Asian Bitcoin Conference in Hong Kong. When we had dinner together, David Bailey mentioned that he was an advisor to Trump's campaign team and would give Trump some advice, including the development of Bitcoin mining in the United States and the inclusion of Bitcoin in the US dollar reserves. So in fact, we all knew about it in May, but I was a little skeptical at the time because it was too big a deal. It was incredible that the Federal Reserve would use Bitcoin as a reserve of the US dollar. Now Trump has announced these plans, even though he has not yet been elected president, so these plans are still uncertain. But in any case, this is a very big step forward.
However, I personally think that we need to clearly realize that politicians may not be our ultimate goal. Although Trump's policies are good for cryptocurrencies in the short term, and we hope that he can be elected and bring better policies, in the long run, we should rely more on those who truly believe in Bitcoin and are willing to buy Bitcoin and hold it for a long time. Whether it is ETFs or American politicians, I think these are short-term. We can support them now and fight for them, but in the long run, our common goal should be those who truly believe in the value of Bitcoin.
I want to talk about the Bitcoin ecosystem. At the Bitcoin Conference, more discussions still focus on Bitcoin itself, rather than the Bitcoin ecosystem. But according to the information we have, in the booth area and the entire conference schedule, the prime time is still given to some policy-related, mining-related or political speeches, and most of the time is used to discuss Bitcoin itself.
The Bitcoin ecosystem is still in a relatively discordant position. However, it is worth noting that the Bitcoin ecosystem has made significant progress compared to last year. Last year, the Bitcoin ecosystem was basically zero. If we compare it to the previous Bitcoin conference, there were almost no related projects. Whether it was a speech or a booth, there might be only a few sporadic ecological projects, such as the Lightning Network. But this year, there are already several projects related to the Bitcoin ecosystem, including Bitlayer. Basically half of the projects in the exhibition area are mining-related, and the other half are Bitcoin ecosystem-related projects.
In summary, the Bitcoin Conference is still the largest conference in the cryptocurrency community. I attended the EDCON conference in Japan and found that most speeches were not well attended. Even when Vitalik gave a speech, the venue was not full, with only a few hundred people, just like an ordinary meet-up. However, the venue of the Bitcoin Conference had more than 10,000 people, and a total of 20,000 to 30,000 participants, which shows that Bitcoin is still very popular.
Second, the Bitcoin ecosystem has made great progress, but I think there is still room for further development. I think the importance of projects related to the Bitcoin ecosystem will be further enhanced at the summer conference. Why? Because several major projects in the Bitcoin ecosystem have not yet been launched, and most of them will have to wait until autumn to be launched. So I am still confident in the overall Bitcoin ecosystem.
Waiting for the light: I haven’t been to the Bitcoin conference myself, but our entire team’s technology and overseas market operations, including our CMO, are basically based in the United States, so I received a lot of real-time news broadcasts. I was curious why Bitcoin was placed in a relatively niche place like Nashville? I asked my American colleagues at the time, and they were also confused. I think Nashville is a traditional art capital and also the center of American country music. Through the pictures sent by my friends, I felt that Nashville’s clean and tidy streets and the city atmosphere coincided with the freedom and equality of the entire Crypto.
This Bitcoin conference is different because of Trump's attendance. There is a saying that Bitcoin has never needed politicians, but now politicians obviously need Bitcoin very much. From the trend of the entire market, except for the last day, the short-term price slightly broke 70,000. In general, no matter what the politicians said or promised, everyone was very calm. Another factor is Harris, another competitor of Trump. She is actually a more extreme left person. She has a more repressive attitude towards digital currency. It should be that some venture capital companies on Wall Street have recently jointly supported Harris and demanded that there must be a trustworthy financial management. In this environment, coupled with the data from the polls, Trump's winning rate is not particularly outstanding, and he even fell behind at one point, so there is also uncertainty.
No matter how much Trump supports BTC, if he is not elected, everything is just a blank check. However, from Trump himself to the speeches of large Wall Street investment institutions such as BlackRock, we can see an obvious hint that everyone will compare the market value of BTC with gold and believe that the market value of BTC is expected to exceed that of gold in the future. I think this is actually a more positive point compared to Trump's inauguration. Frankly speaking, I think being too political is not in line with the original intention of BTC decentralization. The recent topics surrounding ETFs and BlackRock have weakened the original early builders of the BTC ecosystem to some extent. Although this direction cannot be said to be wrong, in the short term, it cannot really promote the development of the entire ecosystem. As Dashan said, it has attracted more people's attention to BTC itself. I think that if BTC is to rise and then drive the common development of the entire BTC ecosystem and other crypto assets, it needs to rely on the construction of Crypto natives.
Eason: I might have gone to the conference in Miami in the past, because I could meet some old friends in the mining industry. But this time I chose to catch up, and some of the speeches were very attractive to me. I agree with Dashan's point of view. In fact, I didn't even watch Trump's speech seriously. Although I have a good impression of him, I think he has a legendary experience and has the potential to be a great man, and I hope he can be elected. But after all, he is a politician, and in my opinion, politics is the dirtiest thing in the world, followed by finance. This is my personal opinion.
Therefore, I don't believe that what a politician says when facing a specific group is completely credible. His speech may just be to get our votes or for some political purposes. I would also like to mention that there was another person at the conference-Snowden. I listened to his entire 32-minute speech very carefully. Although his speaking ability is not as inflammatory as Trump's, his appeal is still very strong. His point of view is that many people are new to Crypto. What is your purpose orientation, what are you going to fight against, and what should you pay attention to? He made a more obscure discussion on the rule makers, rule breakers and consensus level. I still recommend industry practitioners to think about these contents. Because politics has begun to pay attention to the ecology of cryptocurrency and Bitcoin.
He also mentioned that this year's bull market may be a watershed, which may determine whether the future of Bitcoin or cryptocurrency is a niche field or an area that the general public can accept. In this process, there may be some compromises and changes. He also mentioned some concerns about the Bitcoin ecosystem. From 2013 to now, in 11 years, Bitcoin has not made much progress in encryption security and personal privacy. The team has only made two major updates in this decade: Segregated Witness and Taproot Script. But there has not been much progress in further exploring individual user privacy behavior and on-chain behavior.
I personally think that the most important development direction of Bitcoin ecology at this stage may be PSBT (Partially Signed Bitcoin Transaction). I am a fanatic of PSBT. Other directions, including better behavior hiding algorithms, are also worth paying attention to. I am not sure whether this development direction is good or bad for the encryption, security and personal property protection of Bitcoin. I think the Bitcoin ecology is now at a critical point, and the next two or three years may determine whether it is a niche industry or a field that everyone can accept. Finally, I still recommend everyone to listen to Snowden's speech. I learned a lot from it myself.
Related reading: " Full text of Snowden's speech at the Bitcoin Conference: Bitcoin's privacy is decreasing, and machine learning will be used to review transactions "
Blockbeats: After the Bitcoin halving, the price went up all the way, breaking the previous high and reaching $73,000. But afterwards, due to various reasons, the overall market experienced a series of pullbacks. Trump’s speech at this Bitcoin conference did not cause a significant increase in Bitcoin. So I would like to ask all the guests to share this question. What are the necessary conditions for Bitcoin to reach a new high? Or in other words, what are the most critical factors in the current market environment?
Jademont: I also recommend that you watch this speech. You don't have to watch Trump's video, but you must watch Snowden's speech. This speech mentioned a key point, Bitcoin does not represent privacy. Many people mistakenly believe that Bitcoin transfers are private, but this is not the case. Although I don't have specific data, at the end of last year, the FBI released a report stating that 65% of Bitcoin has been marked, that is, the identities of these Bitcoin holders have been linked to real-name IDs. Therefore, current Bitcoin transfers are not completely private.
In May this year, we invited two Bitcoin core developers to come to Hong Kong for exchanges. They were studying Bitcoin's privacy transfer technology. Simply put, it is to put all transfer transactions into a pool, shuffle them, and then output them. Many Bitcoin core developers are paying attention to this issue.
Regarding the price of Bitcoin, I think it is very simple. Bitcoin has been rising in the long run, although there will be fluctuations in the short term. For example, the recent decline may be because someone sold and wanted to buy at a lower price. Therefore, I am not very interested in short-term price fluctuations. In the long run, the price of Bitcoin will rise.
There are several key points to note: First, the interest rate cut in September is a very clear positive factor that will definitely drive the rise of Bitcoin. Second, there is the question of whether Trump will be elected. Trump's election will promote the rise of Bitcoin, but even if he is not elected, Bitcoin will not fall because the base of Bitcoin holders is large, and no party will abandon these voters.
The long-term logic and fundamentals of Bitcoin have not changed, but have become stronger. Even if Trump is not elected, the trend of countries reserving Bitcoin will not change. Whether the United States reserves Bitcoin or not, other countries will definitely do so. Therefore, I personally judge that the price of Bitcoin will definitely exceed $100,000 by the end of this year or the beginning of next year at the latest. If anyone is willing to bet with me, you can send me a private message.
Deng Deng: I agree with what Dashan just said. In the long run, BTC will definitely rise, which is actually very similar to the trend of gold. Whether it is the mining cost of gold or the policy impact of various countries, gold is bullish in the long run. Therefore, it is natural that politicians now compare BTC with gold.
As for when the price will rise, if you are used to looking at data, you can notice that the recent on-chain turnover of BTC between $65,000 and $67,000 has hit a record high. This shows that in this price range, the long-short game is very fierce. After the turnover in this range is completed, a price consensus may be formed in the short term, and then in the long run, the trend is upward. As long as there is no black swan event, there is a high probability that it will rise steadily.
Powell mentioned the September interest rate meeting in his speech in the early morning. Although he did not explicitly say that the interest rate would be cut, there is a certain possibility. If we enter a cycle of interest rate cuts, it will be good for liquidity. According to the cycle after halving in previous years, it will enter a new high in about one to one and a half years after the halving. Therefore, there is no need to worry too much about the current fluctuations.
On the technical level, BTC's pain points have always existed. This round of bull market was driven by BTC, and the craze for runes has made everyone pay attention to BTC again. ETFs also had an impact, but the initial popularity came from the promotion of runes. However, although the new products temporarily attracted attention, they ultimately failed to surpass their competitors, and runes also had similar problems.
There are some shortcomings in the BTC native on-chain assets. It is very difficult to achieve a technical breakthrough. It may take a long time to settle, and it may not even happen in this cycle. But are there other solutions? In fact, there are. For example, companies like exSat have taken into account the experience of the previous rounds of bull markets, aiming to solve some on-chain asset interaction problems, including the problem that the index of runes and plaintext cannot be decentralized.
Eason: Today we are going to discuss an important topic, the price of Bitcoin. My personal opinion is that the ugliest thing in the world is politics, and the second is finance, and the price of Bitcoin is closely related to finance. You might as well think about a realistic question: Is the price of Bitcoin determined by market buying and selling behavior, or can it be controlled by some people? I personally think that the price of Bitcoin is indeed controlled by some people.
For example, during the last bull market, the March 12 incident clearly showed that the Bitcoin dealers changed hands from China to Wall Street in the United States. Although Bitcoin is mined, there is no constant formula to measure its value, because Bitcoin does not require physical delivery and can be traded 24 hours a day around the world, making it a perfect financial transaction subject. Therefore, the price of Bitcoin will either return to zero or rise to an extremely high level.
In the future bull market, the price of Bitcoin actually depends on whether the market makers, exchanges and retail investors reach a consensus. If everyone thinks it will rise, the price will rise all the way. As for how much it can rise, it mainly depends on the people who push the price up and their combined efforts.
Looking back at the last bull market, the cost of Bitcoin was about $6,000, and the price was eventually raised to $60,000 or $70,000, and then a large number of shipments were made for profit. This is the conclusion drawn after the fact through the analysis of on-chain data and K-line trends, which shows traces of market operations. Although we cannot fully predict future trends in the current market environment, I still remain optimistic. If you are not under much financial pressure, you can consider holding Bitcoin for a long time. Wall Street will definitely not miss such a good trading target, and they will pull the price of Bitcoin to a staggering height in this round of bull market.
Blockbeats: Could you please share the current progress of the project or the roadmap for the next stage, including which projects you have recently cooperated with? What do you think is the most critical cooperation in the future Bitcoin ecosystem?
Waiting for the light: Many people may not have heard of the exSat project before, because we have been focusing on technology research and development in the early stage and have not publicized it. It was not until last week at the Nashville conference that we officially announced our brand and project content for the first time. The Nashville conference just ended, and we actually started marketing only a week or two ago.
exSat is positioned as a Docking Layer, which is similar to a dock, allowing different "ships", which may be decentralized exchanges (DEX) or second-layer networks, to gradually dock and connect to our platform. We copy the consensus mechanism and block data of the Bitcoin (BTC) protogenesis chain to establish a complete real-time mapping layer, which runs through smart contracts. This mapping layer can realize functions that cannot be completed on the protogenesis chain, such as asset issuance, decentralized indexing, and docking with the second-layer network.
Recently, we have just launched the test network, and currently multiple mining pools and verification nodes have been connected, including Spider Mining Pool, Everstake, Hash Cloud and Bitget, etc. We have adopted a dual consensus mechanism of Proof of Work (PoW) and Proof of Stake (PoS), which is designed in consideration of the fact that miners are currently under great survival pressure due to halving.
Miners have always been a mysterious and important existence in the Bitcoin ecosystem, but due to the monopoly of the market, some small miners can no longer bear the contradiction between Bitcoin price fluctuations and mining costs. Many miners, especially in North America, have begun to turn to the field of AI. This is not a good thing for the long-term stability of the Bitcoin ecosystem, so we think it is very important to pay attention to the interests of miners.
exSat has invited many mining pools to participate in our on-chain activities. By providing data and conducting block packaging activities, miners can obtain additional income. In addition to the income from Bitcoin itself, this is also a guarantee of the interests of miners and is also conducive to the stability of the Bitcoin ecosystem.
At present, our project is still in the first stage, that is, building consensus. We plan to launch the mainnet in mid-to-late September. After the mainnet is launched, we will launch a modular BTC Rollup solution to accept access from third-party programs, including most of the second-layer networks. We hope to be like a Tmall mall, allowing all Layer2 in the BTC ecosystem to enter our mall like different brands, and we provide them with security solutions and financial custody solutions. Ultimately, we hope to achieve full interaction of on-chain assets, rather than limited to interaction between Layer2. This will promote the prosperity of the entire BTC ecosystem.
Eason: TerpLayer mainly focuses on Bitcoin Layer1 and some EVM ecosystems. At the same time, we also cooperate with mining pools on the technical level. Everyone knows that the two largest mining pools on Bitcoin are Foundry and Antpool.
Some time ago, I discovered an interesting phenomenon. Because we develop applications based on Bitcoin, we are worried about block rollbacks and forks. I noticed that Foundry would fork a block about every seven days, and then overwrite the Antpool block with a higher hashrate. This situation lasted for three weeks, and Antpool lost a lot of Bitcoin.
Antpool approached me to ask about the data. After a period of observation, the person in charge of Antpool confirmed that Foundry was carrying out a long block attack, which might be due to Foundry's technical advantages.
Foundry’s strategy is that after mining a block, it does not broadcast it immediately to let all mining pools mine together, but waits until the computing power is concentrated to a certain extent. Since Antpool has a higher computing power, the computing power of other mining pools has decreased, so Antpool is always caught in the crossfire. Every time Antpool broadcasts a block, it is covered by Foundry. This situation is difficult to handle because there is no direct evidence to accuse Foundry.
We discussed with Antpool how to solve this problem. Should we increase the gas fee in a step-by-step manner to ensure that a transaction can be accepted in the pool, or should we go directly through the mining pool? In fact, both Foundry and Antpool want to cooperate with us, saying that for such high-value Bitcoin transfer transactions, we can directly help you bypass the mining pool and package them directly. However, we think this is not in line with the spirit of blockchain, so we are still hesitant. During this period, Bitcoin block rollbacks and forks have occurred frequently. Remind everyone that if you are engaged in Bitcoin development, you should pay attention to this situation.
BlockBeats: Mr. Dashan is an investor. Would you mind sharing with us which projects or directions in the Bitcoin ecosystem you are paying attention to recently? Can you also tell us which projects you have invested in?
Jademont: We have invested in quite a few projects in the Bitcoin ecosystem, about 30 or 40 in total. We invest according to the rhythm. Before last summer or autumn, we mainly invested in Bitcoin Layer 1 projects. From the end of last year to the beginning of this year, we paid more attention to Bitcoin Layer 2, especially EVM Layer 2.
Because Ordi and Sats performed very well last year, they attracted a lot of attention, and everyone first focused on the assets on the first layer. However, as the number of assets on the first layer increased, people gradually discovered that the performance of the first layer was limited, the block size was limited, and the processing capacity was limited. This resulted in the gas fee becoming very high once a lot of people poured in, which was unacceptable to small and medium-sized investors, and the gas fee might even be higher than the asset itself.
This gave rise to the development of Bitcoin's Layer 2. The reason why EVM's Layer 2 rose first was because Ethereum's Layer 2 had already demonstrated it, and EVM's technology was relatively mature, so it was relatively easy to bring EVM's technology online. Of course, some people question whether Bitcoin's Layer 2 lacks innovation by copying EVM's solution, but in fact, many of Ethereum's Layer 2's technical difficulties and cores were also discussed in the Bitcoin community. For example, the technologies of Plasma and OP were discussed and verified on the Bitcoin forum, then developed on Ethereum, and finally returned to the Bitcoin community for use. There is no so-called plagiarism.
Many EVM Layer 2 projects such as Merlin, BVM, B2 Network, BitLayer, etc. have been launched recently, which is also our investment focus at the beginning of the year. However, as the number of EVM Layer 2 projects increases, homogeneity has become serious. We have invested in four or five such EVM Bitcoin Layer 2 projects, covering various aspects, such as those focusing on ZKVM, focusing on side chains, and focusing on multi-signatures. It is very certain that Bitcoin's EVM Layer 2 will explode in the fall, because several projects have raised 500 million to 800 million US dollars, or even higher. They have raised so much money, and they will definitely go online and create a wave of popularity. So I don't doubt the potential of EVM Bitcoin Layer 2.
But as a VC, we need to look further ahead, at least half a year to a year. We are now focusing on the application of Taproot based on the Lightning Network. Taproot became a star at this Nashville conference. Taproot recently released mainnet, which can issue assets on the Lightning Network, especially stablecoins. We expect stablecoins to be issued on the Lightning Network in the fall, which means we can achieve 1 million TPS of stablecoin transfers. Currently, the most mainstream stablecoin is on the TRON chain, but the fees of the TRON chain are already very high. The Lightning Network is not only 10 times faster than the TRON chain, but the cost is only 1% of the TRON chain, which will truly benefit the crypto.
So we have recently invested in some infrastructure projects around the Lightning Network, such as BitTap's wallet, and some other payment application projects based on the Lightning Network, a total of seven or eight. This is a trend we are optimistic about in the next six months to a year.
I think in this bull market, until the end of next year, the Lightning Network and the smart contract platform RGB will definitely shine. This is our judgment, whether it will come true or not depends on time.
Blockbeats: Could you please share your views on the overall Bitcoin ecosystem? For example, what will be the first to explode in the next round of Bitcoin ecosystem, what is the competitive landscape of Layer 2, whether there will be another explosion of Rune Inscriptions, etc.
Jademont: Recently, the Bitcoin ecosystem seems to be less popular than it was six months ago. This is normal. No ecosystem can continue to rise. I don’t express my views on the Bitcoin ecosystem on X. I think the Bitcoin ecosystem needs a dormant period before it can usher in a greater outbreak. It is expected that in the fall, the Bitcoin ecosystem will usher in the second or third wave of outbreaks.
The main reason is that some big projects will be launched in the fall, including Babylon, BOB, Mezo, BVM, BitLayer, etc., with a total market value of about $5 billion. The technology of these projects is basically ready, and they are keeping a low profile in the summer to wait for the market to pick up and the price of Bitcoin to rise.
In addition, I often communicate with people in other ecosystems, and I feel that the main narrative of the current bull market has not yet been born. The past bull market was dominated by ICO and DeFi, but there is no similar engine at present. Although some projects such as Solana and various memes are very popular, they are not the engine of the bull market and lack a driving effect.
The Bitcoin ecosystem has the highest certainty because it can cross the bull-bear cycle and seize the traffic of the public chain and Ethereum. The Bitcoin ecosystem has only begun to prosper since the Taproot upgrade in 2021. If this upgrade had happened in 2014, Vitalik might not have created Ethereum at the time. I also met a team in Japan that implemented smart contracts on Layer 1, achieving the goal that Vitalik failed to achieve that year.
After years of development and multiple upgrades, Bitcoin can now support some new projects. But I am not particularly optimistic about these new projects because I think the timing has been missed. If these attempts were made in 2013 or 2024, it might be possible to achieve "all chains return to one", with only Bitcoin existing. There was no Ethereum back then, but now there is not only Ethereum, but also other public chains and technologies. It is not feasible to use the technology and narrative of 10 years ago to do what is happening now.
Bitcoin's Layer 2 technology, whether it is EVM's Layer 2 or native Layer 2 such as the Lightning Network, can already achieve all the functions that public chains can achieve. Therefore, we may no longer need so many public chains. At present, the market value of all public chains combined is 300 to 400 billion US dollars, while the market value of the Bitcoin ecosystem has just exceeded 10 billion, a 30-fold gap, which has nothing to do with the market conditions. Even in a bear market, other public chain ecosystems have a market value of 200 to 300 billion. If half of these market values are transferred to the Bitcoin ecosystem, it means that the Bitcoin ecosystem will continue to expand by more than 10 times.
Current mainstream projects such as exSat may increase by at least 10 times, which may be the most certain Alpha in this bull market. I am not sure whether the Bitcoin ecosystem can drive the growth of the entire crypto, but Bitcoin is the most likely, because it is the most legitimate, and Western mainstream funds will also pay attention to the Bitcoin ecosystem first.
I recently met a Japanese who downloaded a Bitcoin wallet after buying Bitcoin for the first time. He first came into contact with the assets of the Bitcoin ecosystem and DotSwap. In the future, he may find Uniswap nothing new because he has already come into contact with it when playing with the Bitcoin ecosystem. This kind of situation will happen a lot in the future, and everyone should have confidence in the Bitcoin ecosystem.
For Layer 2 projects, it is important to clearly identify who the target users are. They should not be Bitcoin extremists. Projects should seek fans in the Ethereum ecosystem and Layer 1 ecosystem, especially those public chains that were once called Ethereum killers. Most of them are now half-dead. Their only way out is to join the Bitcoin ecosystem, or if they have ecological applications, turn themselves into Bitcoin ecological applications as soon as possible. Bitcoin has a very solid foundation and it will not disappear, so there is no need to worry about the problem of public chains failing.
Deng Deng: I think the development of the entire ecosystem needs to be supported by the belief in BTC prices. So I will start with the BTC price. In the most recent round of market cycles, I found that the increase in BTC is actually gradually compressed in each halving cycle. In the past, we might have seen a hundredfold increase, but with the participation of ETFs, the BTC market will become more stable. Now, not only should we pay attention to macroeconomic data and the dynamics of the Federal Reserve, but the inflow and outflow of ETFs will also affect market sentiment. Therefore, I think the violent bull market in the past will not appear in this cycle.
If we look back two months ago, the BTC price fluctuated between $60,000 and $64,000, then accumulated energy between $64,000 and $67,000, and finally formed a consensus range between $65,000 and $66,000. Next, I think the next round of price fluctuations will be between $70,000 and $74,000. Similarly, the overall fundamentals are still very good. In addition to Trump, Russian oil has recently expressed its acceptance of Crypto settlement. This shows that at the national level, the acceptance of Crypto is gradually increasing.
Looking ahead to 2024, as Trump said, many people are just beginning to understand BTC. If everyone understands BTC and the market is well educated, this is the real beginning. The current price is around $64,000, which I think is a very good buying point. When everyone thinks that this thing is valuable and bullish in the long term, this forms the belief of the entire ecosystem.
As for the BTC ecosystem, it has a kind of fundamentalism. From the perspective of asset issuance, many BTC OGs hold BTC for a long time and do not pay attention to other assets because they think other assets are not native enough. When inscriptions and runes came out, although everyone had expectations, in fact, even if runes later made some optimizations to the liquidity and issuance model of inscriptions, the impact was not very large.
In the end, BTC’s native assets have a very embarrassing problem, that is, there is a lack of applications that can support its market value. This has had a certain impact on the development of the entire ecosystem. Although many Layer 2 solutions have emerged, after experiencing a situation of a hundred schools of thought at the beginning of this year, Layer 2 has performed very poorly recently.
These phenomena have consumed the consensus of BTC to a certain extent. According to the information revealed by Dashan, the Layer 2 solution will be ready in autumn. I think this is a very positive thing for the entire ecosystem and will drive up the price of BTC.
What exSat is doing now is to extend the consensus, introduce miners and validators into a new consensus layer, and then issue and interact with on-chain assets. Our token issuance fully complies with the fair launch principle of BTC, there is no pre-mining, and a halving mechanism is added. In addition, the stablecoin project launched on the Lightning Network mentioned by Dashan is also included in our overall plan.
Frankly speaking, I am not a technical person. When I first heard the R&D team talk about these plans, I felt that they were either impossible or too big. However, I think that whether it is Layer 2 or other technologies, one or more resource integration platforms like Docking Layer are needed to avoid the consumption of resources and consensus and truly expand the potential of the entire ecosystem. Even if it is not exSat, there will be other project parties to do this.
Eason: Simply put, the current Bitcoin ecosystem is relatively separated from Bitcoin itself. In other words, the rise in Bitcoin prices does not necessarily lead to the rise of tokens within the ecosystem. This is a problem that needs to be solved. We are also working with some teams recently. They hope to conduct business on the Bitcoin ecosystem and also need our technical support.
We are also exploring an economic model that can be associated with Bitcoin price fluctuations. Bitcoin price growth is relatively stable, but if our economic model can reflect Bitcoin price fluctuations in our assets through some mechanism, such as Bitcoin rising 1%, our assets rising 100%, that would be very beneficial. We hope to capture the spillover funds brought about by the rise in Bitcoin prices. This is also an issue that we are discussing a lot with our peers and partners.
I am more optimistic about the stablecoin track. Bitcoin may be the only blockchain based on POW consensus that can issue assets. The Bitcoin ecosystem is very suitable for issuing stablecoins, and the Bitcoin ecosystem or Bitcoin layer actually needs stablecoins to solve and make up for financial shortcomings. After all, native transactions cannot always be based on Bitcoin because it is too expensive.
Bitcoin will gradually replace other tokens with shorter life cycles, such as meme coins, and the growth of other tokens cannot be compared with Bitcoin, which means that introducing stablecoins into the Bitcoin ecosystem is the key to solving this problem. In general, we believe that the next outbreak point may be around stablecoins in the Bitcoin ecosystem.
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