Author: The Edge Podcast Compilation: Cointime.com 237
Background Information:
DeFi Dad (Host) - Host of The Edge Podcast, Educator, 4RC Investor
Nomatic (Co-host) - Co-host of The Edge Podcast, 4RC investor
Muneeb Ali (Guest) - Co-founder of Stacks, developer of Bitcoin layer-2, CEO of Trust Machines
Stacks - a Bitcoin Layer 2 network that brings smart contract functionality to Bitcoin without modifying Bitcoin itself
Muneeb Ali: Bitcoin's Potential and Rising Fees
1. Muneeb Ali is the co-founder of Trust Machines and Stacks. He has extensive experience in the Bitcoin industry and has built several protocols and applications on Bitcoin. He is also a key figure in George Gilder's book Life After Google.
2. Muneeb is engaged in the training of cryptography engineers and computer scientists, and has a strong interest in Internet open protocols and large-scale distributed systems.
3. In the process of building his shared office space, he and his partners became more interested in Bitcoin and began to experiment. From this they created a Bitcoin-based DNS system and realized the potential of using the Bitcoin blockchain as the foundation of a truly decentralized internet.
4. Muneeb believes that Bitcoin is the most mature and stable cryptocurrency, which enables other ecosystems to conduct more experiments. He sees Bitcoin as having the potential to be durable and more decentralized.
5. Muneeb values Bitcoin's immutability and ability to resist censorship, which are essential for certain applications, such as currencies and domain names.
6. He talked about Bitcoin’s resilience in the event of a Bitcoin-related company or organization shutting down. Unlike other cryptocurrencies such as Solana, the disappearance of a single entity will not affect the existence and operation of Bitcoin.
7. DeFi Dad believes that the predictability and reliability of the Bitcoin network is the source of its value.
8. Muneeb stated that the increase in Bitcoin network fees in 2023 reflects the increase in the use of the Bitcoin network. He stated that the scalability trend has moved towards layer-2 solutions, as evidenced by the rise of layer-2 on Ethereum.
9. Muneeb stated that the price of Bitcoin has been undervalued and inefficiently used for many years. He believes that the surge in Bitcoin network fees in 2023 shows that Bitcoin will be able to fund its own security in the future.
10. He suggested that there is a lot of potential in the current Bitcoin market. He compared the relative capitalization and layer-2 market size of Bitcoin and Ethereum.
11. Muneeb said that the current Bitcoin layer-2 market is small, which provides opportunities for developers and startups. He has noticed some developers switching from ethereum to bitcoin.
12. Nomatic agrees with Muneeb's assessment of Bitcoin's market potential. He also believes that the rise of Ordinals, a method of attaching more data to the bitcoin chain, expands bitcoin's potential uses.
13. Muneeb believes that Ordinals are a new foundation for the development of the Bitcoin network. People are already using it to create domain name systems, archive services and token standards, he said.
14. Muneeb said Ordinals will have staying power because people are using it to inscribe valuable assets on the Bitcoin chain. He noted that the rise of second-layer solutions will require tools to move assets between different layers.
Understanding Layer 2 in Bitcoin: An Introduction to Blockstream and Stacks as a True Layer 2
1. Muneeb talked about the concept of the second layer in Bitcoin and how it was introduced by Blockstream. He explained that if bitcoins are moved from the main chain to other places, it is usually considered a second layer. He mentioned the concept of a "true second layer," which relies solely on the security of the first layer.
2. Muneeb recognizes the confusion over whether or not Stacks is a second layer to Bitcoin, explaining that it can meet one of two criteria for a true second layer. He points out that the term can be confusing to the general public, who often use the term layer-above-L1 to simply mean layer-two.
3. Muneeb said that while Stacks is not as secure as the Bitcoin network, it does offer certain advantages.
4. Muneeb stated that one of the biggest bottlenecks to the growth of the Stacks ecosystem is the inability to easily transfer $ BTC into it. He mentioned that work is underway to speed up the process and make it more secure.
5. Muneeb talked about the speed of transactions in the Bitcoin network, which can be slow and unpredictable. He mentioned that this could pose a potential problem for DeFi users who are used to faster transaction times on other networks.
6. Muneeb said that the Stacks ecosystem is working hard to solve the problem of improving transaction speed and reliability, which he believes is crucial to building a successful DeFi ecosystem on Bitcoin.
7. Nomatic asked Muneeb about the current status of Stacks and its mainstream protocol.
8. Muneeb mentioned a mainstream smart contract called Proof of Transfer (PoX), which obtains the consensus of BTC tokens by locking STX tokens. He mentioned that there is currently $300 million in value locked in PoX smart contracts and that approximately $100 million in Bitcoin has been generated over the past year.
9. He said that Bitcoin holders want decentralized products, and that this can be achieved in a transparent way through smart contracts. He said the Stacks ecosystem uses a different language called Clarity, which is safer and more precise.
10. DeFi Dad asked Muneeb about the functionality of the STX token within the Stacks ecosystem. Muneeb said STX tokens are used to pay transaction fees, and in future upgrades, it will be used as financial collateral to keep signers honest.
11. Nomatic asked Muneeb about compliant token offerings with Stacks and an update on tokens marked as securities on platforms like Binance and Coinbase.
12. Muneeb explained that they want to be compliant and that their disclosure with the SEC helps make the project more transparent and decentralized. He mentioned the challenges facing decentralization, but he believes it is necessary in the industry.
13. DeFi Dad asked Muneeb about how to get DeFi users new to Stacks started.
14. Muneeb recommended Hiro Wallet, D'CENT, and Xverse as wallets that can be used, and mentioned applications such as Alex and an NFT market called Gamma. He also mentioned the way to enter the Stacks ecosystem through the Magic Bridge function.
