Virgin territory
“Virgin territory” – a cartoon that illustrates the possibilities for the new projects building on top of Bitcoin, which was historically only a medium of exchange.
With the inflow of new users from the launch of the Bitcoin ETF, CoinMarketCap estimates there are now over 46 million Bitcoin wallets holding at least $1 of value.
Yet, according to the US Federal Reserve, only 2% of crypto users have made any transactions and many Bitcoin hodlers [sic] never create a wallet, but keep their bitcoin on one of the many exchanges.
The rollout of Layer 2 protocols on top of Bitcoin are designed to attract these Bitcoin hodlers to start to use the same type of products and services that have proven very popular with other protocols (e.g. Ethereum).
Starting in early 2023 with the Ordinals protocol, which introduced a Bitcoin version of non-fungible tokens (NFTs), this movement has continued with the provision for memecoins and other fungible tokens on the Runes protocol.
More recently, the BitVM computing paradigm has opened the door to facilitating smart contracts on Bitcoin.
The big question is whether these new products and services will convert bitcoin hodlers or whether this new infrastructure will be similar to the dormant residential flats built across China over the last decade.
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Sources:
Daniel Jimenez (Jul 18, 2024) – Runes: The Next Big Step in Bitcoin’s Evolution? – Hackernoon
Clem Chambers (May 24, 2023) – Bitcoin Ordinals Are The Next Big Thing In Crypto – Forbes
