In a recent announcement, Best in Slotthe infrastructure company that powers some of the most popular Bitcoin applications and wallets like Xverse and Liquidium, announced that BRC-20s are getting an upgrade.
Dubbed BRC2.0, it is expected to go live on the Bitcoin Testnet in Q1 of 2025, with the aim of bringing “smart contracts” to BRC-20s, allowing them to compete with Bitcoin's sidechain designs.
In short, the “BRC20 Programmable Model” is designed to “solve endless new use cases for native assets on Bitcoin – including seamless DeFi, RWAs, DAOs, stablecoins, and more – without rely on multisig bridges or L2s. “
After many years in the place, we can all agree that we have heard promises like this before. However, metaprotocols have one distinct advantage: they are completely chained, instead of relying on completely separate chains with new trust assumptions. Sure, metaprotocols may not be the best way to decentralize the token economy on Bitcoin, but they are a start.
Runes suffered from too high expectations prior to launch, and this is an opportunity for BRCs to make a comeback. Regardless of your position on Bitcoin tokens, competition between different standards will ultimately lead to greater efficiency and reduce bloat on chain – something we can all agree is desirable.
This is the real question: for regular Bitcoiners who use Bitcoin just as a money network, do we need to go through this again? Chain compression, useless pump-and-dump schemes, skyrocketing taxes…
My answer is: absolutely!
The mempool has been “dead” for the better part of the past six months.
First, as Bitcoiners, we are supposed to support free markets. Getting more users to pay fees is the best outcome for Bitcoin's survival. Miners have just gone through another half, and keeping mining profitable is the only way to prevent centralization in the hands of subsidized actors (whether governments or financial markets – yes, miners will not survive will provide unlimited loans to buy appliances forever).
For context, according to CoinDeskSolana testers experienced an inflow of more than 100,000 SOL, worth almost $25.8 million, in fees and tips due to the intense trading activity of the TRUMP and MELANIA tokens.
Second, Pandora's box has already been opened. Bitcoin is here to stay. If users want additional recording capability, who has the authority to stop it? (Apart from pro-censorship thinkbois, of course.)
As the Bitcoin ecosystem grows, the introduction of the BRC-20 update presents a strong case for why it could bring out the status of the Runes token. Here are several reasons why:
- The main attraction of BRC2.0 lies in its promise to increase efficiency. With smart contract functionality, BRC-2.0 tokens could handle complex operations directly on the Bitcoin blockchain, potentially reducing the need for additional layers or sidechains. This could lead to more complex transactions, reducing on-chain bloat, a problem that Runes has been criticized for due to their initial hype and subsequent concentration. This efficiency could be a game changer for Bitcoin scalability, offering a streamlined approach to tokenization without changing the security or decentralization of the underlying protocol.
- BRC2.0 is designed to integrate with existing Bitcoin infrastructure. Thanks to collaboration with the likes of the Layer 1 Foundation, it could improve user experience and interoperability. Unlike Runes, which faced challenges in user adoption due to complex minting processes and poor UX, BRC2.0 aims for a more user-friendly interface for creating tokens and between -work. This could lead to wider acceptance and use, making Bitcoin a more attractive platform for developers and users.
My default stance on anything new related to Bitcoin is always caution. We'll have to wait for the actual details of this new protocol to be revealed, but I'm excited about the prospect of more effective DeFi use cases on Bitcoin – not on smaller chains.
If you're still skeptical, I'll leave you with this question: If signs of Bitcoin are inevitable, what's worse?
- Metaprotocols using the Bitcoin block space in exchange for fees, without changing the rules of the network?
- Or Bitcoiners turning their hard-earned Bitcoin into centralized, competing chains to access the same token markets?
As Bitcoin Maxi, I want all the fees. I want all users. Bitcoin Maxis should be FEE REVENUE Maxis, while the basic philosophy of the basic network remains unchanged (looking at marine enjoyyyyers).
My TL; DR:
- Stay tuned to see what BRC2.0 has to offer. Will it really be programmed in a way that is secure enough for Bitcoiners to trust?
- Runes can be irrelevant if BRCs really backfire, especially with better UX.
- Let the miners rejoice with degen taxes.
- Indicators on Bitcoin without changing the rules are better than indicators on Bitcoin that require new codes or changed rules.
- Thanks for all gigabrain devs building on Bitcoin apps instead of vaporware chains.
This article is a Take. The views expressed are entirely those of the author and do not necessarily reflect the views of BTC Inc or Bitcoin Magazine.
Articles I write may discuss topics or companies that are part of my company's investment portfolio (UTXO instructions). The views expressed are solely my own and do not represent the views of my employer or its associates. I do not receive any compensation for these amounts. Readers should not consider this content to be financial advice or an endorsement of a particular company or investment. Always do your own research before making any financial decisions.
