The Bitcoin Layer 2 track has become a thing of the past.

After delving into Bitcoin scaling technology and following up with some technical teams for a long time, I found that BTC Layer 2 seems to be a false proposition. Bitcoin itself doesn't need Layer 2, but the entire cryptocurrency industry needs to leverage Bitcoin's value. Layer 2 is essentially just a business model, not real blockchain technology. More importantly, Layer 2 does not really help the main chain to achieve scaling, it only provides some new application scenarios for the main chain token, and most of these scenarios are simple imitations of Layer 1 and lack innovation.

Layer2 has not achieved true scalability

The concept of Layer 2 originally comes from the simple payment verification scheme mentioned in the Bitcoin white paper (SPV). Based on this, the Lightning Network has indeed helped Bitcoin achieve "scalability" in transactions to some extent. However, the Layer 2 solutions imitated by other public chains like Ethereum, while able to share the main chain's security, have not truly solved the scalability issue.

This is mainly because Bitcoin adopts the UTXO model, while Ethereum uses a unified account model. The UTXO model allows for concurrent processing of transactions and local state changes without the need for a global state tree. In contrast, the account model relies on a global state tree, resulting in lower transaction processing efficiency. Current Layer 2 solutions have not fundamentally changed this.

The BeamChain proposal recently introduced by the Ethereum community incorporates SNARK technology, which can partially enhance state change capabilities. However, this still does not fully address the issues brought by the account model and is not closely related to Layer 2.

Therefore, whether it's Ethereum or Bitcoin's Layer 2, they essentially do not help the main chain achieve true scalability. They provide new application scenarios for the main chain tokens, rather than bringing about fundamental changes.

Layer2 is the business model of the project party.

Most Layer2 projects are centralized, lacking a true consensus mechanism and the concept of nodes. They are essentially private chains run by a sequencer controlled by the project party, (Sequencer).

Layer 2 tokens often lack practical use. They cannot be used for node staking ( because there are no nodes ), nor can they be used as GAS fees ( with main chain tokens ). The so-called "governance" role is also very limited because Layer 2 itself is centralized.

The project party mainly profits by issuing tokens and collecting GAS fees. Many Layer 2 projects attract users by creating airdrop expectations, thereby earning substantial GAS fee revenue.

This business model is being increasingly emulated by a growing number of entities, including traditional companies and cryptocurrency projects. They are starting to launch their own Layer2s, forming a commercial closed loop. However, all of this is not closely related to ordinary users, who are merely consumers rather than participants.

Bitcoin does not need Layer2

Among the projects centered around Bitcoin, the one with the largest market capitalization is WBTC. Its success lies in recognizing that the entire cryptocurrency industry needs to leverage Bitcoin as a "gold mine," rather than Bitcoin needing to expand its use cases.

Bitcoin itself is self-sufficient and does not require any expansion. Over the years, various expansion proposals surrounding Bitcoin have largely lacked innovative significance. Therefore, I am no longer interested in so-called proposals that help Bitcoin expand. It is important to recognize that it is this industry and even all of humanity that needs Bitcoin, not the other way around.

The Future Value of Bitcoin

After Bitcoin becomes a national reserve, its next stage of development may be to become the currency for on-chain AI and a decentralized control system for AI consensus issues. This perspective opens up a new view on the value growth of Bitcoin.

The Bitcoin network is a constantly growing decentralized state change machine, with its consensus capability and security continuously enhancing. This characteristic makes it an ideal solution for the future governance needs of humanity and AI. Some innovative projects are exploring how to apply this capability of the Bitcoin network to future public governance and AI safety requirements.

This approach not only focuses on the BTC token but also looks at the potential of the entire Bitcoin network. It upgrades Bitcoin from "digital gold" to "on-chain AI currency and governance system," opening up a whole new direction for Bitcoin's development.

Conclusion

Bitcoin Layer 2 has become an outdated and insignificant entrepreneurial direction. As Bitcoin enters a new development stage, its network value and security continue to strengthen. The most promising entrepreneurial directions in the future will revolve around the Bitcoin network itself, exploring the greater value that this continuously growing decentralized control system can provide in an era of coexistence between humans and AI.

Exploring the potential of the Bitcoin network, rather than being limited to the BTC token itself, may be the true legacy that Satoshi Nakamoto left for humanity. This idea might lead us into a completely new era of innovation.