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Bitcoin Guides

Top 5 Projects Enabling New Applications For Bitcoin

Author

Rickie Sanchez

Tags

Tags Editor's Choice

Reading time

4 mins
Last update

Author

Rickie Sanchez

Tags

Editor's Choice

Category

Bitcoin Guides

Reading time

4 mins
Last update

Author

Rickie Sanchez

Tags

Editor's Choice

Reading time

4 mins
Last update


Top 5 Bitcoin Projects

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Key Takeaways

  • Many projects seek to broaden Bitcoin’s capabilities beyond a peer-to-peer payment system.
  • This includes enabling Decentralized Finance (DeFi) applications, smart contracts, and other functionalities typically associated with Ethereum or other blockchains.
  • Bitcoin still holds a dominant position in the crypto market, and building projects on top of it leverages the Bitcoin network and its reputation for security.

In the early days of computing, Windows dominated not necessarily because it was superior but because it had the broadest reach.

We might see a similar trend with blockchains today, where competition focuses on user and developer adoption.

While being the most decentralized or innovative won’t guarantee success, Bitcoin’s widespread adoption requires it to be competitive and convenient for everyday use.

Bitcoin’s Weak Points

Although Bitcoin is often criticized for being slow, inflexible, and lacking innovation, these qualities contribute to its security and decentralization. The core layer of Bitcoin, deliberately designed to be conservative, is actually a strength in some sense.

At the same time, projects built on top of Bitcoin lack the hype brought about by having a token with which people can speculate. This is probably why you have probably never heard of any of the exciting projects happening below:

Top 5 Projects Building On Bitcoin

The Lightning Network

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The Lightning Network (LN) is essentially a way to make Bitcoin transactions faster and cheaper. It is built on top of the Bitcoin blockchain, acting like a secondary layer for the main network.

A popular app like Cash App (used by 55 million people in the US) is already on board, and this could revolutionize how we send money internationally, including remittances.

Inscriptions, Ordinals, BRC-20 Tokens, And RUNES

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Ordinals, Inscriptions, BRC-20 Tokens, and RUNES are all related to the new standards for adding information directly to the Bitcoin blockchain. Here’s a breakdown:

  • Inscriptions – These are essentially NFTs on Bitcoin. They allow embedding images, videos, or text directly onto satoshis, the smallest unit of Bitcoin.
  • Ordinals – This is the protocol that makes inscriptions possible. It basically creates a system for assigning an order or sequence to these satoshis with inscriptions, allowing them to hold unique data.
  • RUNES – This is a specific type of token built using the Ordinals protocol. It aims to be a fungible token itself, but on the Bitcoin blockchain, it uses the UTXO model (think of it as separate “pouches” for tokens). RUNES is a recent proposal (September 2023) as an alternative to BRC-20 tokens.
  • BRC-20 Tokens – This is a standard built on top of Ordinals. It simplifies creating fungible tokens (like regular cryptocurrencies) on Bitcoin. BRC-20 borrows inspiration from a similar standard on Ethereum (ERC-20) but avoids complex smart contracts.

However, this surge has some big names in the crypto space that are questioning their value. The concern is that these tokens are clogging up space in Bitcoin’s transaction records, which is driving up transaction fees.

Bitcoin Virtual Machine (BitVM)

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The Bitcoin Virtual Machine (BitVM) is a proposed system that aims to bring smart contract functionality to the Bitcoin blockchain.

This project allows the Bitcoin blockchain to have its own virtual machine, similar to an Ethereum Virtual Machine (EVM), allowing many more layer-2 solutions and sidechains that can scale Bitcoin.

It’s important to note that the BitVM is still under development, and there’s some debate about how well it will work.

Spiderchain

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Spiderchain is a proposed system by a company called Botanix Labs that would add a new layer to the Bitcoin network and would use a mechanism called proof-of-stake (PoS) to secure a network of sidechains.

In other words, you can copy and paste anything you do with Ethereum to Bitcoin, opening up the potential for DeFi, staking, decentralized exchanges, stablecoins, and any existing widespread use case to be possible with the Bitcoin blockchain.

Liquid Network

image 21

The Liquid Network is a Layer-2 solution that extends Bitcoin’s capabilities by enabling the creation of digital tokens representing real-world assets (RWAs). 

The project is designed for institutional and professional users who can benefit from these features. Notably, a hotel in El Salvador is set to issue securities using the Liquid Network protocol.

Final Thoughts

The public’s focus on short-term gains through token speculation has overshadowed many promising projects with the potential to make a real impact. While these projects might not be attention-grabbers, I believe some hold the key to positive change.