As Bitcoin’s price soars, a new vision for the digital asset is emerging: one that goes beyond payments and unlocks its true potential in DeFi protocols and Layer 2s.
As the price of Bitcoin continues to soar, one question remains at the forefront of the minds of investors and enthusiasts alike: what’s next for this digital asset? Recently, Twitter founder Jack Dorsey stated that the focus should be on scaling payments in order to keep Bitcoin relevant. However, Rena Shah, COO of Trust Machines, vehemently disagrees with this stance.
Bitcoin is a decentralized digital currency that operates independently of central banks.
It was created in 2009 by an anonymous individual using the pseudonym Satoshi Nakamoto.
Bitcoin uses cryptography to secure and verify transactions, allowing for peer-to-peer transfers without intermediaries.
The total supply of bitcoin is capped at 21 million, with new units being created through a process called mining.
As of 2022, over 18 million bitcoins have been mined.
The Path Forward: Creating a More Functional Ecosystem
According to Shah, the only way to grow Bitcoin’s relevance is by creating more functionality for everyday users to engage with their bitcoin without selling or sending it away (i.e., ‘hodling’). This includes developing smart contract functionalities on Layer 2s like Stacks, which can bring new opportunities to the ecosystem. By incentivizing miners through sustainable means and leveraging DeFi protocols, Shah believes that Bitcoin can continue to be a generational asset of wealth and store of value against inflation.
Unlocking the Potential of Bitcoin DeFi
The current state of Bitcoin’s adoption in DeFi is staggering, with only 0.8% of its total supply being utilized. This presents a vast untapped potential value on-chain, waiting to be unlocked through clear cases for building on Bitcoin. By leveraging DeFi protocols and Layer 2s, users can bridge their bitcoin to these platforms and borrow stablecoins, effectively using digital assets as payment while keeping their BTC securely stored on the blockchain.
A New Era of Relevancy
Shah’s vision for a more functional ecosystem is centered around creating opportunities for users to engage with Bitcoin in meaningful ways. This includes lending, borrowing, and other financial services without compromising security. By fostering a new generation of builders and innovators, Shah believes that we will see people create savings accounts filled with bitcoin, earn yield in bitcoin, take out loans against their bitcoin, and more.
The Future is Not About Payments
Ultimately, the future of Bitcoin lies not in making morning coffee purchases or other everyday transactions but in creating opportunities for users to engage with this digital asset in a more meaningful way. By embracing DeFi protocols and Layer 2s, we can unlock the full potential of Bitcoin and create a new era of relevancy that goes far beyond mere payments.
DeFi stands for Decentralized Finance, which refers to financial services built on blockchain technology.
Bitcoin DeFi combines the use of Bitcoin with decentralized finance protocols, enabling users to lend, borrow, and trade cryptocurrencies in a trustless manner.
This ecosystem utilizes smart contracts to facilitate transactions without intermediaries, promoting financial inclusion and reducing costs.
- coindesk.com | Bitcoin Is Not a Payments Platform
