Bitcoin Layer2: A Misunderstood Concept

When I started researching the Bitcoin Layer 2 track, I gradually realized that this might be a misunderstood concept. After in-depth exploration, I found that Bitcoin itself does not actually need Layer 2; rather, the entire cryptocurrency industry needs Bitcoin.

Layer 2 is essentially a business model, rather than a true blockchain technology. It does not help the main chain achieve scalability, but rather provides more application scenarios for the main chain token. Most of these scenarios mimic Layer 1 and lack innovation.

The earliest inspiration for this idea came from a Bitcoin startup team. They were one of the first teams to promote Bitcoin Layer2 in the Chinese-speaking region, but in 2024 they completely changed direction and proposed a new strategy.

Why does this 180-degree turn occur? I believe there are several main reasons:

First of all, Layer 2 has not truly helped Layer 1 scale. Taking the Lightning Network as an example, it is able to achieve "scaling" for Bitcoin because Bitcoin uses the UTXO model. However, for blockchains like Ethereum that adopt the account model, their Layer 2 solutions cannot solve the fundamental issues brought by the account model.

Secondly, Layer2 is essentially a business model for projects. Most Layer2 are centralized, lacking consensus mechanisms and the concept of nodes. Project parties profit by charging gas fees, while users expect token airdrops. This model is unrelated to decentralization and consensus, making it difficult for Layer2 tokens to achieve true consensus.

Finally, Bitcoin itself does not need Layer 2. On the contrary, the entire cryptocurrency industry needs Bitcoin as the "digital gold." Projects like WBTC were created to bring Bitcoin into other ecosystems.

After realizing this, I lost interest in those proposals that claim to improve or expand Bitcoin. Bitcoin itself is already self-sufficient and does not require any external expansion. It is important to think about how to leverage the value of the Bitcoin network itself, rather than just being limited to the BTC token.

There is a view that Bitcoin may become the currency for on-chain AI and a decentralized control system for AI consensus issues in the future. This idea transcends the limitations of Bitcoin itself and begins to consider the relationship between the Bitcoin network and humans and AI, representing a cognitive upgrade.

A proposal put forward by a certain team also reflects a similar idea. They view the Bitcoin network as an ever-growing decentralized state change machine, believing that this is the only system capable of matching the future governance and security needs of humanity in the age of AI. They hope to apply the consensus capabilities and decentralized characteristics of Bitcoin to future public governance and AI security fields.

This innovative approach far exceeds the traditional Bitcoin Layer 2 concept. It not only finds a new direction for the future value growth of Bitcoin but also combines Bitcoin with human development and AI needs, truly realizing the maximum value of the Bitcoin network.

Overall, Bitcoin Layer 2 has become an outdated and insignificant direction. With Bitcoin becoming a national currency reserve, it has entered a whole new stage of development. The most promising entrepreneurial direction for the future should be to think about how to utilize this continuously growing decentralized control system to play a greater role in the future where humanity and AI coexist.

Exploring the value of the Bitcoin network itself, rather than just focusing on the BTC token, may be the greatest wealth that Satoshi Nakamoto has left for humanity. From this perspective, Satoshi's foresight is truly impressive.