Bitcoin Layer2: An Outdated Entrepreneurial Direction

When I started to delve into the field of Bitcoin Layer 2, I gradually realized that this might be a misunderstood concept. After long-term tracking of some technically proficient teams and projects, I arrived at some conclusions that may not be very popular but are indeed facts.

First of all, Bitcoin does not actually need Layer 2 solutions. Instead, the entire cryptocurrency industry needs to leverage the value of Bitcoin. Layer 2 is essentially just a business model, rather than real blockchain technology. More importantly, Layer 2 does not really help the main chain scale; it merely provides some additional application scenarios for the main chain tokens, most of which are simply replicating the functions of Layer 1, lacking innovation.

The earliest to validate this viewpoint was the BEVM team. They were initially pioneers of Bitcoin Layer2, but in 2024 they completely shifted direction and launched a brand new Super Bitcoin strategy. This 180-degree turnaround sparked my thoughts.

The concept of Layer 2 originated from the simple payment verification mentioned in the Bitcoin white paper, specifically the SPV ( scheme. The Lightning Network is built on this concept and indeed helps Bitcoin achieve "scalability" in terms of transactions to some extent. However, while Ethereum's Layer 2 draws on this model, due to Ethereum adopting an account model rather than a UTXO model, its Layer 2 solutions actually cannot address Ethereum's fundamental scalability issues.

The UTXO model of Bitcoin allows for concurrent processing of transactions and local state updates, while Ethereum's account model relies on a global state tree for serial processing. This fundamental difference determines the limitations of Layer 2 expansion for Ethereum. Although the BeamChain solution proposed by the Ethereum community introduces SNARK technology to enhance verification efficiency, it still has not addressed the basic limitations of the account model.

From this perspective, Layer 2 cannot truly help Layer 1 scale. It is more like a business model for finding application scenarios for Layer 1 tokens. The reason the Lightning Network can bring real value to Bitcoin is mainly because the UTXO model of Bitcoin itself has the capability for local state updates and concurrent processing.

Another issue worth noting is that almost all Layer 2 projects are centralized. They lack a true consensus mechanism and node concept, essentially functioning as private chains. The actual use cases for Layer 2 tokens are very limited, primarily relying on expectations of airdrops created by the project team.

The main source of income for Layer 2 project parties is GAS fees, which has led more and more business entities to consider building their own Layer 2. However, this model contradicts the spirit of decentralization and resembles a replica of traditional business models.

Bitcoin itself does not require a scaling solution. The success of projects like WBTC demonstrates that the real demand lies in bringing Bitcoin, the "digital gold," into other crypto ecosystems. This reflects the industry's recognition of Bitcoin's value, rather than any shortcomings of Bitcoin itself.

In the future, the value of Bitcoin may surpass the category of "digital gold." There are viewpoints suggesting that the Bitcoin network could become a monetary system and decentralized control system for on-chain AI. This idea expands the potential of Bitcoin into broader fields, especially in a future where humans coexist with AI.

The ideas proposed by the Super Bitcoin project are very enlightening. It defines the Bitcoin network as a continually growing decentralized state change machine and believes that this mechanism could be the best solution for future AI governance and security needs. This line of thinking not only focuses on the BTC token itself but also emphasizes the overall value and potential of the Bitcoin network.

In summary, Bitcoin Layer 2 has become an outdated and meaningless entrepreneurial direction. As Bitcoin gradually becomes a national currency reserve, its development has entered a new stage. The most promising entrepreneurial direction in the future may revolve around the Bitcoin network itself, exploring how to maximize its value in an era of coexistence between humans and AI. This may be the true legacy that Satoshi Nakamoto left for humanity.