Could Bitcoin outgrow its role as a payment system with scaling solutions like ZK Rollups?

Could Bitcoin outgrow its role as a payment system with scaling solutions like ZK Rollups?

Bitcoin: More than a cryptocurrency?

Bitcoin, the world's largest cryptocurrency, has long been known for its importance in the financial sector. However, some enthusiasts believe that Bitcoin has the potential to be more than just a means of conducting transactions.

During a Twitter event on July 6, Ethereum co-founder Vitalik Buterin highlighted the importance of scaling solutions for Bitcoin, saying that the introduction of technologies like ZK Rollups could expand Bitcoin's capabilities beyond that of a pure payment system.

Strange Bitcoin politics

While Buterin acknowledged Bitcoin's dominance in the cryptocurrency space, he highlighted one of its biggest challenges. He emphasized that Bitcoin has “really weird politics” that he finds difficult to get comfortable with. This observation sheds light on the social dynamics and decision-making processes within the Bitcoin ecosystem.

Buterin, Eric Wall and Udi Wertheimer discussed scaling Bitcoin. They emphasized the need for faster transaction throughput and exploring alternative Layer 2 scaling approaches. By implementing such solutions, Bitcoin could increase the speed at which users can send and receive digital assets.

Buterin suggested that scaling options like Plasma or ZK Rollups could allow Bitcoin to expand beyond its role as a payment system. These scaling solutions have already been tested on the Ethereum blockchain network.

Ordinals as a solution?

Eric Wall and Udi Wertheimer joined the discussion. Wall expressed concerns about the ecosystem and emphasized the importance of Bitcoin studying these scaling attempts to avoid adopting less secure roll-up implementations. Buterin acknowledged the need to address such concerns.

An important topic that Wall addressed was Bitcoin's security model and the 21 million hard cap. Buterin acknowledged the complexity of this question and suggested ordinals as a possible solution. By establishing an appropriate fee market, Ordinals could address the challenges of declining block subsidies while ensuring security requirements are met.

Buterin admired the development of Ordinals within the Bitcoin ecosystem and considered it significant “for the builder culture.” He noted that he "definitely sees signs of hope now that we have Ordinals" and called them a real pushback to "laser-eyed maximalism."

Similarities between Ethereum and Bitcoin

Buterin also looked for similarities between the two ecosystems and identified ten common aspects. He highlighted the assertion of immutability on both chains and acknowledged the respective challenges with Layer 1 privacy. Additionally, Buterin acknowledged that Ethereum and Bitcoin have demonstrated the complexity of decentralized consensus models.

Conclusion

It is clear that Bitcoin can be more than just a cryptocurrency. With the introduction of scaling solutions such as ZK Rollups and the development of Ordinals, new opportunities and potential are opening up for Bitcoin. The discussion about the future of Bitcoin will continue to be exciting as the community focuses on developing solutions to make Bitcoin an even more versatile and powerful network.