A top-of-the-line Layer 2 (L2) solution for Bitcoin could open the door to a major new industry in the cryptocurrency world.
Bitcoin's potential is already obvious: its total capitalization exceeds $2 trillion and is on track to overtake gold, the world's largest asset.
Why BTC L2 Could Open a New Major Market in Crypto?
1. Underestimation of size — BTC L1 is a non-programmable layer, which means that BTC L2 has more potential for development than ETH L2.
2. Safety will determine the winner in the race as it will be a major factor in the development of BTC L2 versus ETH L2.
3. Underestimating the development potential — projects are already being developed on BTC L2, which many have not even heard of.
This article is an explanation of what can be done on BTC L2 compared to ETH L2 and what project can give us such a future.
Advantage of BTC L2 over ETH L2
Speed over security – ETH L2 strategy.
ETH L1 is a fully programmable layer on which most products are built. ETH L2 is designed to make ETH L1 transactions faster and cheaper, which is why the security and reliability of ETH L2 solutions are greatly reduced. This is why 97.5% of liquidity is on ETH L1, since ETH L2 cannot provide the necessary level of security for holders of large assets, so users choose high fees for the sake of reliability.
This choice of ETH L2 towards speed, at that time, was made in order to accelerate its development and influence on the market, since it was a free niche, and additional security did not have such a meaning for degens. It is also necessary to understand that now ETH L2, such as Optimism, Arbitrum, etc. are not optimized for security and are unlikely to change their strategy, since it is simply not profitable for them.
BTC L2 Potential?
Large assets have been needing a new L2 for a long time. They need a reliable, fast and cheap solution to their problem, because if you keep your funds on L1, you will not be able to use your assets the way you want - the speed and cost of transactions will suffer.
BTC L2 opens up a huge market of opportunities where large players can store their capital in a safe place, while being able to move it quickly at low gas costs.
Since BTC L1 is a completely non-programmable layer, this opens up even more possibilities for programming on BTC L2:
1. High scalability and programmability
2. Greater security capabilities
3. Future speed increases
4. Storage of capital
5. The New DeFi Industry
But it is important to understand that the development of such serious solutions for BTC required very large resources to discover new technologies, on the basis of which the development of BTC L2 will be possible. Teams capable of programming such solutions spend a huge amount of money and time. Unfortunately, many L2 solutions on BTC cut security in favor of speed and user loyalty, since most will not notice the difference.
BTC - Decentralization as a Foundation
It is important to remember that decentralization is the main advantage of BTC over other blockchains on the market, and in the near future it opens up huge potential for development not only for cryptocurrencies, but also for the mass user, because it is thanks to the L2 solution that it will be possible to:
1. Pay with BTC instead of traditional currency, where the bank will no longer act as an intermediary
2. Freedom to transfer funds without delays
3. Complete anonymity
And all this will be available with the development of a competent L2 solution for BTC.
BTC L2 Innovators
Strata BTC — a project developing a new solution for BTC L2, from Alpen Labs — the team that has been developing L2 since 2022.
It will be in a few weeks launched testnet Strata, and within this year it will fully enter the mainnet.
Results
To sum it up, a well-designed solution for BTC L2 can completely change the idea of crypto and create a new meta, just like Arbitrum did in its time, giving birth to the meta of retrodrops. This means that we must definitely follow the development so as not to miss a possible future lifechange.
