Bitcoin

A Deep Dive into Layer 2 Technologies

Published

8 months ago

6 June, 2024

Today, Marcin Kaźmierczak in Redstong Oracles explains how Bitcoin Layer 2 aims to improve the performance of the protocol while preserving its integrity by deploying improvements on a separate blockchain.

Many consultants attended Consensus 2024 in Austin, Texas last week. I highlight the main themes that emerged from the event in Ask an Expert. I’m looking forward to next year conferencewhich will be held in Toronto, Canada.

Bitcoin (Bitcoin) revolutionized the financial world with its decentralized, secure and transparent nature. Although it was the first cryptocurrency, Ethereum (ETH) pioneered the development of the entire decentralized financial ecosystem, or DeFi. Now, Bitcoin is following suit, ushering in an era of development within its own ecosystem. As Bitcoin’s popularity increased, so did challenges related to its scalability and transaction speed. To solve these problems, the Bitcoin community has developed several layer 2 blockchains, or L2s, that improve the network’s efficiency and functionality without changing Bitcoin’s software itself. This article delves into Bitcoin’s Layer 2 concept, exploring its classifications, benefits, and expected advancements in this sector. By understanding these innovative protocols, users can understand how Bitcoin continues to evolve and maintain its relevance in an increasingly competitive digital landscape. Ultimately, the cryptocurrency bitcoin is digital gold and the entire economy is being created around it, analogous to gold in the physical world.

Q: What are Bitcoin Layer 2 and how are they classified?

A: They are built on the Bitcoin blockchain. Transactions can be transferred to them, addressing the performance issues and limitations of the Bitcoin blockchain and adding programming functionality. There are three types of Bitcoin layer 2:

Q: What problems do Bitcoin L2s fix and why are they important?

A: Bitcoin layer 2 addresses important issues to improve network efficiency and functionality. First, they improve scalability by reducing congestion. As a result, transaction fees are lower and execution is faster, making Bitcoin more suitable for everyday use. L2s also increase the utility of bitcoin assets and introduce complex smart contract functionality, enabling DeFi, NFTs and other Web3 applications. This improved programmability helps Bitcoin maintain market relevance. They expand Bitcoin’s use cases and ensure easier and more accessible transactions. Ultimately, Bitcoin L2s are important for users as they enable new functionality for BTC holders, such as the use of lending platforms, yield solutions, or decentralized exchanges (DEXs). They serve as an alternative to Ethereum-based solutions for actors who hold a major portion of their bitcoin portfolio.

Q: A comparison of existing Bitcoin L2s and what to expect from this sector this year.

A: Comparing Bitcoin Layer 2 involves evaluating its technical classification. It must be identified whether it is a state channel, rollup or sidechain. Additionally, metrics such as transaction fees, security guarantees, and available decentralized applications, or dApps, on top of a network are crucial. The table below represents the top 2 layers of Bitcoin as of June 2024.

* BounceBit is not a layer 2 but a layer 1 proof-of-stake chain with BTC as the main currency.

**Babylon is a BTC staking platform, implementing a new approach that allows for BTC staking.

Looking to the future, we can undoubtedly expect further expansion and the emergence of new layer 2s of Bitcoin. Due to its scarcity and the fact that there will only be around 21 million bitcoins in existence, it makes sense to expand the programmability and functionalities of digital gold. The next evolution will include reducing transaction costs on the above L2s, adding more compatibility layers, and implementing well-known primitives on Ethereum such as automation dApps or popular wallet support.

Bitcoin has no floor or ceiling in its value and accumulated market capitalization, which today is close to US$1.4 trillion. In its current form, the Bitcoin blockchain serves as a foundational layer upon which innovation can flourish. and today this materializes with layer 2. Looking at the success of Arbitrum, Optimism, Base and zkSync, it can be argued that we will have at least a few thriving ecosystems in this category. Therefore, it is vital to follow its evolution and embrace the use of BTC as one of the fastest growing narratives in 2024.

Consensus Recap: The energy was positive at Consensus 2024 last week in Austin, Texas. Approximately 15,000 people participated, coming from a wide range of industries: service providers, custodians, cryptocurrency exchanges, ETF issuers, RIAs and consultants – all looking to connect. There was a lot of curiosity and engagement.

Q. What were the main themes that emerged?

Through this newsletter, we will continue to focus on these themes and provide more in-depth coverage of these topics as your source of information for consultants in the field.

Note: The opinions expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates.

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We are the editorial team of SatoshiTimes, where seriousness meets clarity in cryptocurrency analysis. With a robust team of finance and blockchain technology experts, we are dedicated to meticulously exploring complex crypto markets with detailed assessments and an unbiased approach. Our mission is to democratize access to knowledge of emerging financial technologies, ensuring they are understandable and accessible to all. In every article on SatoshiTimes, we strive to provide content that not only educates, but also empowers our readers, facilitating their integration into the financial digital age.

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Bitcoin

What to watch for in the markets

Published

6 months ago

21 July, 2024

SatoshiTimes Staff

Photo: Andrew Harnik (Getty Images)

After witnessing one of the largest global IT outages on record, affecting the travel, finance and healthcare sectors worldwideThis week is set to see more political drama, events, and earnings reports from tech giants.

Donald Trump’s ‘Lovefest’ Sets Jamie Dimon Up for Consideration for Treasury Secretary Job

Let’s take a look at what awaits us:

Major companies will release their earnings reports

Major tech companies and others will release their earnings reports this week, paving the way for what the second half of 2024 will look like.

Monday

Verizon will report earnings before the start of operations.

Tuesday

Coca-Cola, Comcast and UPS are all set to report earnings before the market opens.
Tesla will report earnings in the morning, while General Motors will report earnings in the evening.
Alphabet and Visa will report results after the market closes.

Wednesday

AT&T will release its report before the market opens.
Ford and Chipotle will report earnings after the market closes.

Thursday

Earnings reports from AstraZeneca, American Airlines and Southwest Airlines will be released before the market opens.

Trump to speak at Bitcoin conference

Presumptive Republican presidential nominee Donald Trump will speak at the next Bitcoin Conference in Nashville, Tennesseewhich is scheduled for July 25-27. While this is the first time a presidential candidate will attend the conference, it has sparked a debate over whether the crypto-friendly Trump will receive support from the crypto community in the upcoming election.

In addition to Trump, independent presidential candidate Robert F. Kennedy Jr. will also discuss crypto during the conference. Crypto advocates such as ARK Investment’s Cathie Wood, MicroStrategy’s Michael Saylor, and whistleblower Edward Snowden are among some prominent names who will be participating in the conference.

Ether ETFs are on the way

New Ether Spot ETFs are set to begin trading on Tuesday, July 23. Much like the spot Bitcoin ETFs, these ETFs will allow investors to buy the second most popular cryptocurrency like stocks. BlackRock, Ark Invest/21Shares, VanEck, Grayscale, Fidelity, Bitwise, Franklin Templeton, and Invesco/Galaxy Digital are all set to offer Ether ETFs. Crypto asset manager Bitwise predict that trading in the Ether ETF will drive the price of Ether higher, potentially surpassing $5,000.

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Bitcoin

Cryptocurrency’s Biggest Winners and Losers in a Second Trump Presidency

Published

6 months ago

21 July, 2024

SatoshiTimes Staff

Cryptocurrency’s Biggest Winners and Losers in a Second Trump Presidency

Bitcoin miners and cryptocurrency companies that have been blocked from going public in the U.S. could ultimately be the biggest winners in the digital asset world under a second Donald Trump presidency. Foreign companies at risk of losing market share could end up being the biggest losers.

That’s the view that’s taking hold among market participants and observers in the wake of the former president’s growing embrace of cryptocurrency as his chances of election grow. survey released Thursday by CBS News showed Trump with the majority — 52 percent — of likely voters in his likely November rematch with President Joe Biden.

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Bitcoin

Bitcoin, Ethereum, Solana and Cryptocurrency Markets Look Ready to ‘Send’ as Stars Align, According to Investor Chris Burniske

Published

6 months ago

21 July, 2024

SatoshiTimes Staff

Bitcoin, Ethereum, Solana and Cryptocurrency Markets Look Ready to ‘Send’ as Stars Align, According to Investor Chris Burniske

Cryptocurrency investor Chris Burniske says Bitcoin (BTC), Ethereum (ETH), Solana (SUN) and the cryptocurrency market in general seem poised for a run.

Former Head of Cryptocurrency at ARK Invest account his 292,200 followers on social media platform X that several catalysts are aligning, suggesting that digital asset markets are on the verge of a bull run.

According to Burniske, a partner at venture capital firm Placeholder, the highly anticipated launch of Ethereum-based exchange-traded funds (ETFs), Republican presidential candidate Donald Trump speaking at an upcoming Bitcoin event, and the current state of the BTC, ETH, and SOL charts all suggest significant optimism for the cryptocurrency markets.

“With ETH ETFs set to go live, Trump speaking at The Bitcoin Conference, and BTC, ETH, and SOL charts looking [they do] (while stocks are weak), it’s hard to imagine a world where we don’t ship next week.”

Reuters recently reported that preliminary approval for ETH ETFs has been granted as the Bitcoin Conference is scheduled to take place from July 25-27.

BTC, ETH, and SOL are trading at $67,333, $3,528, and $174 at the time of writing, respectively.

The venture capitalist too provides an update on his prediction that the total crypto market cap will eventually hit $10 trillion. According to his chart, the path to $10 trillion is currently “23%” complete, as it sits around $2.2 trillion.

Source: Chris BurniskeX

Earlier this month, Burniske he said in an interview with Real Vision CEO Raoul Paul that he has his eye on the Move ecosystem, which was originally built by social media giant Meta and then used to develop layer 1 blockchains Sui (IUE) and Apts (APT).

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Bitcoin

Here’s the next target for BTC before bulls can hold out for $70K

Published

6 months ago

21 July, 2024

SatoshiTimes Staff

Here’s the next target for BTC before bulls can hold out for $70K

Bitcoin’s recovery is going well, and the market is seemingly poised to create a new all-time high in the near term.

Technical analysis

Per NegotiationRage

The daily chart

As the daily chart shows, the price of Bitcoin has been rising since it broke above the 200-day moving average.

The market has also reclaimed the $60K and $65K levels and is moving towards the $68K resistance zone, which could be the last hurdle before creating a new all-time high. With the RSI also indicating that the price has clear bullish momentum, it could be just a matter of time.

Source: TradingView

The 4-hour chart

Looking at the 4-hour chart, it is evident that the price has been rising rapidly since breaking the downtrend line to the upside. The market also broke the $65K resistance level with momentum, turning it into a support.

While almost everything points to a new record high in the coming weeks, there is one worrying sign. The RSI is showing a clear bearish divergence between recent price highs, which could indicate a correction or even a reversal in the near term.

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Cryptocurrency Charts by TradingView.

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