In addition to the highly anticipated ETF, this year the Bitcoin ecosystem has seen a new surge of development vitality and opportunities. The emergence of the Ordinals protocol has brought a wave of new energy to the entire Bitcoin ecosystem, giving rise to the BRC20 protocol and igniting a surge in interest. Meanwhile, new technologies such as BitVM and BitStream have garnered widespread industry attention, bringing new hope to the vitality of the Bitcoin ecosystem.

At the same time, the BTC ecosystem is rapidly expanding. New projects continue to emerge from various fields such as DeFi, Wallets, Marketplace, BRC20, Ordinals, and Infrastructure, accelerating the expansion of BTC's ecosystem.

From the "Jubilee" plan of the Ordinals protocol to the launch of the ARC20 token standard, the rise of the BRC20 token standard, and the distribution of Taproot Assets, to the new computation on Bitcoin by BitVM, and the decentralized file hosting incentivized by Bitcoin payments through BitStream, TinTinLand has compiled the recent hot trends in the BTC ecosystem to provide you with an in-depth understanding of the current ecosystem and to explore the infinite potential demonstrated by the latest technologies.

Ordinals Protocol:Income Increase, "Jubilee" Plan in Progress

In January of this year, the Ordinals protocol was launched on the Bitcoin mainnet by Bitcoin core contributor Casey Rodarmor. This protocol allows users to create Bitcoin versions of NFTs—referred to as "digital artifacts" on the Bitcoin network—supporting JPEG images, PDFs, videos, or audio content. Similar to many NFT projects on the Ethereum network, these "digital artifacts" will be minted on the Bitcoin network.

Currently, Ordinals' inscription income continues to rise. According to data from Dune on November 13th, the cumulative fee income from Bitcoin NFT protocol Ordinals' inscriptions reached 2433.5 BTC, approximately $90,286,981. The current total inscriptions amount to 40,089,490 pieces.

On November 14th, the founder of the Ordinals protocol, Casey, stated that the official Ordinals protocol is considering a "Jubilee" at Bitcoin mainnet block height 820512. Starting from the selected block height, new inscriptions will be processed, turning inscriptions that would have been marked as "cursed" into "blessed" inscriptions, giving them positive numbers, which may mean that cursed inscriptions will face discontinuation. Cursed inscriptions are actually inscriptions that were unrecognizable in the early version of ord.

The Ordinals protocol is still evolving and has garnered widespread attention from the community. After the Bitcoin SegWit upgrade, the Ordinals protocol allows for more information to be included in a single block's content by segregating witness data. Earlier this year, the project opened up new pathways for asset transfers by inscribing data such as images, text, and audio on Bitcoin's satoshis. In October, the Ordinals protocol also underwent a major update, releasing version v0.10.0, which added various features such as batch inscriptions, adding metadata, and inscription number endpoints.

ARC20:A Token Standard More in Line with the Spirit of Bitcoin

Ordinals is not a perfect protocol, and three months after its launch, an anonymous developer introduced the Atomicals protocol in September of this year to address its shortcomings. Its basic unit "atom" is composed of Bitcoin's smallest unit, sat, meaning that each unit of the ARC-20 token is always backed by 1 sat, achieving 1 Token = 1 sat, which is more in line with the original spirit of Bitcoin technology.

The ARC20 token standard provided by the Atomicals protocol also garnered significant community attention in September of this year. The Atomicals protocol is dedicated to driving token innovation on the unspent transaction outputs (UTXO) of Bitcoin. Unlike Ordinals, which was initially designed for NFTs, Atomicals rethinks the way to create centralized, tamper-proof, and fair tokens on the Bitcoin network. ARC20 is the first protocol to mint inscriptions through PoW, allowing everyone to participate in mining. Through the Atomicals and ARC20 protocols, users can issue and trade their own tokens on the BTC network without relying on other blockchain platforms. This has brought more functionality and possibilities to the Bitcoin ecosystem, making token issuance and usage more flexible and convenient.

For developers, the programmability of ARC20 has brought a more convenient development experience. The ARC20 standard is written in Solidity, a programming language specifically designed for writing smart contracts, providing core functions such as token issuance, token transfer, and token value management. By using the ARC20 standard, developers can more easily create and exchange digital assets without worrying about legal and compliance issues related to tokens. The ARC20 standard also provides tools such as the ARC20 standard client, allowing developers to more easily deploy and operate ARC20 tokens on the Ethereum blockchain.

Compared to BRC20, Atomicals and ARC20 seamlessly integrate the issuance and trading of tokens with the BTC network, reducing the need for third-party sorters, increasing the decentralization and security of the system, and giving users more control, which is more in line with the culture of the BTC community. Overall, the ARC20 standard provides a simple, secure, and globally applicable way to create and manage digital assets, making it a good choice for developers and token holders.

BRC20:Trading Frenzy, Centralization Risks Cannot Be Ignored

The concept of BRC20 inscriptions may be the hottest topic in the recent BTC ecosystem. Currently, the highest market value of inscription assets is mainly the BRC20 series, and the surge in related inscription prices has also sparked continued attention from the community and various stakeholders in the BTC-related track.

Inspired by the minting of NFTs by the Ordinals protocol, developer @domodata conceived the creation of the BRC20 token standard in March of this year, using ordinal inscriptions of JSON data to deploy token contracts, mint tokens, and transfer tokens, aiming to establish a specific format of JSON data packets to be inscribed on the BTC chain through Ordinals and managed through off-chain indexing platforms.

After nearly a year of eruption, silence, and resurgence, major exchanges have announced support for the BRC20 protocol, and many BRC20 token prices have reached new highs, with the market value of Ordi exceeding $400 million and daily trading volume reaching $800 million. The Brc20-swap launched by UniSat provides more abundant liquidity for decentralized trading of top BRC20 tokens.

The emergence of the Ordinals and BRC20 standards has been praised by Ethereum founder Vitalik Buterin as a significant advancement in Bitcoin technology and ecosystem, and the community believes it has achieved a "fair launch".

It is important to note that BRC20 has certain centralization risks, potential issues such as network congestion and dust attacks are completely unsupported by Bitcoin purists.

The BRC20 protocol treats inscriptions as a ledger for recording the deployment, minting, and transfer of BRC20 tokens. Since smart contracts cannot run on Bitcoin, BRC20 tokens cannot query the relevant information of the current tokens through program execution. Therefore, BRC20 records all deployments, minting, and transfer operations of BRC20 tokens by using centralized servers to retrieve Bitcoin blocks. This centralized settlement process may lead to different platforms having different results when querying the token balance of a particular account. Although all operations are recorded on the chain, the verification of these operations is the responsibility of a specific client. Therefore, the entire BRC20 ecosystem still needs to further achieve decentralized indexing services.

Taproot Assets:Expanding Asset Distribution and Circulation

In October, Taproot Assets v0.3 was released on the mainnet alpha version, laying the foundation for issuing stablecoins and other assets on Bitcoin. According to Lightning Labs, the current release version supports on-chain functionality, and support for the Lightning Network is also on the way. The Lightning Network is a bidirectional payment channel network built on top of the Bitcoin blockchain, aiming to achieve fast and low-cost microtransactions.

Taproot Assets is a protocol released by the Lightning Labs development team, which records various assets by writing information into UTXO scripts on the Bitcoin network. Therefore, Taproot Assets can be used to issue tokens, NFTs, and various other assets on the Bitcoin network, aiming to create and trade various digital assets on the Bitcoin network. This protocol integrates with the Lightning Network, expanding the channels for distributing and circulating assets. Elizabeth Stark, CEO and co-founder of Lightning Labs, believes that Taproot Assets will help lead the "Bitcoin revival", making the Lightning Network a multi-asset network and further solidifying Bitcoin's position in the "internet of money" field.

The biggest difference between Taproot Assets and BRC20 and ARC20 is that the token issuance process of Taproot Assets requires owners to mint tokens in advance before distributing them. However, users must run a Bitcoin full node and Taproot Assets client themselves, or use third-party services, and the transaction records of tokens need to rely on third-party indexers for storage, posing potential centralization risks.

The development team has stated that after the release of Taproot Assets, they will focus on developing the Lightning Network into a multi-asset network, allowing users to send and receive their chosen currencies on the Lightning Network once the protocol's payment channel functionality is completed, utilizing existing Bitcoin liquidity as a global routing currency and exchange medium.

BitVM: Computing Anything on Bitcoin

Bitcoin has always been a benchmark in the crypto space, but there has been a persistent issue of insufficient capability to execute complex, Turing-complete smart contracts. The emergence of BitVM is accelerating the solution to this problem.

In October, Robin Linus, the project lead of ZeroSync, released the whitepaper "BitVM: Computing Anything on Bitcoin", in which he pointed out that BitVM can achieve Turing-complete Bitcoin contracts without changing Bitcoin's consensus rules. It can execute almost any arbitrary computation and use that computation to perform Bitcoin transactions on-chain, conduct offline computations, and leave no trace on the chain.

BitVM, short for Bitcoin Virtual Machine, integrates Optimistic rollups, Fraud Proof, Taproot Leaf, and Bitcoin Script. As an intermediate layer, BitVM speeds up transaction speed and reduces the burden on the Bitcoin blockchain. This is particularly valuable for tasks requiring complex computations or smart contracts, as they can be verified externally before making any permanent decisions. This setup also ensures the integrity of the blockchain while paving the way for advanced and secure operations.

Compared to Ethereum's EVM, BitVM focuses on bilateral contracts and processes most of its tasks off-chain. This approach has minimal impact on the Bitcoin blockchain and reduces transaction costs. However, BitVM's design imposes certain limitations in complex multi-party scenarios, whereas Ethereum's EVM performs better in this regard.

You can view the original BitVM whitepaper here: BitVM Whitepaper

BitStream: Decentralized File Hosting Incentivized by Bitcoin Payments

In November, Robin Linus published "BitStream: Decentralized File Hosting Incentivized by Bitcoin Payments", proposing a decentralized file hosting incentive protocol called BitStream, providing a sustainable alternative.

For example, a user may only upload a video once, incurring a one-time fee, but if the video becomes very popular and is downloaded 100,000 times, the server's bandwidth costs may far exceed the initial upload revenue. BitStream's pay-per-download method provides a solution: it allows servers to charge for each download, ensuring that revenue expands with the popularity and demand for the content, creating a balanced and profitable ecosystem.

The whitepaper mentions that BitStream addresses the imbalance in the current hosting economy, aligning server profits with content demand—servers are compensated for providing network services, i.e., file distribution. The Bitstream system utilizes Bitcoin payment channels, including Lightning Network, Liquid, Chaumian ecash, Fedimint, or Cashu, to enable fast microtransactions for file access. In Bitstream's design, file verification is facilitated using Merkle trees, promoting the uniqueness and security of hosted data. By breaking down files into hashed components, the system can quickly verify the accuracy of transmitted content.

Bitstream offers a variant of traditional data hosting methods, proposing an incentive system for decentralized file hosting without relying on trust or complex cryptography, but its practical application is still to be observed.

You can view the original BitStream whitepaper here: BitStream Whitepaper

Conclusion

The development of these new technologies has opened a new chapter for Bitcoin, making BTC transactions more efficient and endowing the BTC ecosystem with more data programmability and transaction convenience.

As the absolute leader in the crypto market, Bitcoin's market value accounts for more than half of the total market value of the entire crypto market. However, beneath the bubble, only a return to the essence of technology and innovation can attract more developers to try to enter the Bitcoin ecosystem, ushering in a Web3 Summer where various tracks flourish in this "Spring of Inscriptions".

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