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Programmable Bitcoin Blockchain: The Key to Triggering the Next Explosive Price Rise?
Following the launch of the first US spot Exchange Traded Funds (ETFs) in January and last month’s Halving event, cryptocurrency investors are waiting for the next big catalyst to push Bitcoin to new heights beyond its current record of $73,700, set in March. 14.
According to a recent Bloomberg relationshipFor a growing chorus of developers, the answer may lie in improving the cryptocurrency’s core blockchain with greater programmability.
The next chapter of cryptocurrencies?
Bitcoin has long been seen primarily as “digital gold,” doing little beyond basic transactions. In contrast, the Ethereum network has earned a reputation for itself smart contract functionality, with applications ranging from lending and borrowing to yield farming.
A wave of new upcoming projects are working to bring this type of programmatic flexibility to the Bitcoin blockchain. By using techniques like the “Ordinals” protocol to embed data into the smallest unit of BTC (the satoshi), developers are reportedly opening up new possibilities for creating tokens, smart contracts, and even decentralized applications (dApps) directly on the Bitcoin network .
“This is a huge unlock for Bitcoin,” said Kyle Samani, co-founder of cryptocurrency investment firm Multicoin Capital, who recently led a $7 million funding round for Arch, a startup that is building a programmable platform above Bitcoin.
According to the report, Arch, which is expected to be open to all developers as early as this month, will allow apps based on the Solana blockchain to be ported to run on BTC. About 20 teams are building Ordinal-based applications for lending, borrowing, decentralized exchanges, and stablecoins.
The Layer 1 Foundation is also developing a programmable module for BRC-20 metaprotocol, which stores executable code directly on the Bitcoin blockchain.
This approach is said to take advantage of BTC’s relatively longer block confirmation times, 10 minutes (compared to Ethereum’s 12 seconds), to allow for more complex calculations.
Can Bitcoin’s DeFi Ecosystem Eclipse Ethereum?
Despite this progress, not everyone is convinced that Bitcoin’s programmability will be the key to its success next meeting. Jeff Garzik, a former BTC core developer, believes that layer 2 scaling solutions will ultimately win because they can offer cheaper transaction costs than running applications natively on the network.
However, supporters of programmable BTC are betting that this new wave of decentralized finance Applications (DeFi) could be a major growth driver. Toby Lewis, founder of OrdinalsBot, said:
Bitcoin’s DeFi ecosystem could become the largest of all cryptocurrencies. It is possible that the Bitcoin DeFi ecosystem could grow to trillions of dollars in market capitalization in the next few years, and it appears to be one of the main drivers of cryptocurrency growth this cycle.
If these predictions come to fruition, the community may have found the long-awaited catalyst to trigger the cryptocurrency’s next big price surge.
As of this writing, the largest cryptocurrency by market capitalization, is trading at $67,300, up more than 7% over the past seven days.
Featured image from Shutterstock, chart from TradingView.com