BTC Ecology and NFT Possibilities

NFT is a digital carrier or storage form based on blockchain technology, with uniqueness, indivisibility, tamper-proof modification, and traceability. At this stage, it is mostly used in digital art, but in theory it can correspond to all digital assets. NFT is not only solving the problem of copyright protection and confirmation of digital works, but also extending the possibility of advancing the development of the digital economy. The emergence of NFT feasibility has given great imagination to the efficiency of the digital economy.

It is no exaggeration for many senior NFT enthusiasts to compare NFT to a new productivity tool in the digital economy.

In this AMA, NewBTC World invited Teco,the founder of Blockchain Knights, Hacpy, ChainX R&D experts and Jianbin,ChainX technical experts to express his views and opinions on BTC ecology, current NFT hotspots, and ChainX future prospects. Main ideas are:
· Issuing NFT on the BTC network is completely feasible. ChainX aims to be the largest Layer 2 of BTC to meet the technical pursuit. And based on the user base of the original BTC network, its NFT influence is also huge.
· The upgrade of Taproot will lay the foundation for the ecological explosion of BTC and greatly accelerate the progress of BTC globalization.
· BTC is a universal currency that will become the consensus of people around the world, and the explosion of BTC’s second-tier network applications will bring more opportunities to the BTC ecosystem.

1. How does BTC issue NFTs?

Jianbin: As long as the BTC layer 2 network uses the same secp256k1 encryption algorithm as Bitcoin to generate the NFT owner account, you can realize the technical connection between NFTs and BTC. The most basic characteristics of NFTs are transferability and uniqueness of ownership. These can be implemented on ChainX 2.0.

Hacpy: Decentralize BTC to Layer2, issue NFT through Layer2.

2. What is the advantage of BTC issuing NFTs?

Jianbin: BTC has the largest market capitalization and a large user base. By issuing BTC NFT to meet the needs of BTC users to hold NFT assets,draining BTC users and NFT supporters to ChainX2. 0, it is a win-win situation for ChainX and BTC. As the most valuable blockchain network today, BTC is also the most influential and widely popular blockchain network, which naturally has the advantage of maintaining the rare value of NFTs.

3. BTC had a developer ecosystem before Ethereum came out, and now the developer ecosystem is basically already on Ethereum. What is the reason for this? Can BTC solve these problems in the future?

Jianbin: The main reason, I think there are three points:

(1) The script function of BTC is too single to support more complex financial applications.BTC focused on the”currency function “ level, which is undoubtedly successful.But ETH’s smart contracts make it possible to develop complex“financial functions”on the blockchain.

(2) The split within the BTC ecosystem has lost potential users.The biggest split in the BTC community in 2017-BTC and BCH, in fact, the split between BTC developers and BTC miners, gave the opportunity for the explosion of the smart contract blockchain represented by ETH.

(3) BTC lacks peripheral basic development tools and requires higher requirements for developers.BTC development is completely decentralized,and there is no such organization as the Ethereum Foundation in the early days of BTC.The Ethereum Foundation has reduced the cost of Dapp development by funding community developers to develop a series of basic libraries and tools that are developer-friendly and reduce the cost of Dapp development.

Hacpy: As the beginning of the cryptocurrency, BTC itself is more suitable as a currency,and Ethereum can know from the name that it is essentially a platform, the goal is to build an ecosystem,the goals of the two are inconsistent,of course, there is also the problem of BTC lack of scalability.This Taproot upgrade is designed to solve these problems.

4. What is the impact of taproot upgrade on BTC?

Jianbin: Taproot is the biggest upgrade of the BTC network since 2017. For specific types of complex transactions, Taproot upgrade can enhance privacy while reducing the amount of transaction data and reducing transaction costs.

Hacpy: The upgrade of taproot will further expand the influence of BTC,strengthen the potential of BTC,and most importantly lay the foundation for the ecological outbreak of BTC, greatly accelerating the progress of BTC globalization.

Teco: I think there have been a lot of articles on the market. Here I briefly summarize with you that the most intuitive impact of the taproot upgrade can be considered from the following aspects:lower transaction fees,enhanced privacy protection and the ability to create smart contracts.

As we all know, Bitcoin uses an elliptic curve signature algorithm,which is what we call ECDSA.When we make Bitcoin transactions, we need to verify ECDSA one by one, and Bitcoin processes up to 7 transactions per second, then in the case of“more and less”, its higher and higher transaction fees have become an inevitable event.However, the taproot upgrade allows signatures to be confirmed in bulk,which means that we do not need to verify ECDSA one by one, transactions throughout the network will be cheaper and faster,which is the first impact of the taproot upgrade.

So what does the second impact of enhanced privacy protection mean?The taproot upgrade enables the signature data to be merged, thus encoding multiple keys into a single key.Simply put, it can make the world’s number one Bitcoin owner look no different from other users, more difficult to track.At the same time, taproot can also hide advance payments from Bitcoin users, that is, any complex payment is like any other ordinary payment.

At the same time, taproot’s upgraded BTC layer 2 network is a new cross-chain solution. While the degree of decentralization continues to increase, it brings great scalability to BTC,supporting the Bitcoin network for more complex transactions, including time-locked issuance,multi-signature requirements, etc., that is to say, the Bitcoin network has the function of creating smart contracts.

The solution of these three problems can be said to bring an even more powerful effect to Bitcoin,but also greatly make up for the short board of Bitcoin.

5. NFT ecological distribution, how can BTC occupy the NFT ecology?

Jianbin: Actively embrace change.NFT connects off-chain assets and on-chain assets and is a new opportunity.

Hacpy: This upgrade, BTC will once again occupy the high ground of the blockchain hotspot, and the long-awaited BTC Layer2 will be hair-trigger and quickly take root in the NFT ecosystem.

6. BTC issued NFT, I heard it was interesting to go, what is the prospect?

Jianbin: To be precise, NFT is issued on the BTC Layer 2 network, such as on ChainX2. 0. Embrace change with an enterprising attitude.

Hacpy: NFT is currently very hot in the world, but BTC does not do much in the field of NFTs, there is still a lot of potential to tap, there is no doubt that the development prospects are broad.

After all, what we are seeing is all about Bitcoin’s NFT works. Perhaps issuing NFT on Bitcoin will have unexpected effects,and the number of users of Bitcoin is enough to support the larger NFT market.

But back to the essence, the prospect of NFT still depends on its product or work itself,and the current significance of which chain may not be great, more is the consensus under the same ecology,so if NFT can be issued on the Bitcoin network, it may give birth to the next huge NFT ecology, which is still worth looking forward to.

7. BTC, as the best asset of globalization, is now stuck only at the level of digital gold, if scalability can be perfected, how big a scenario will it be?

Jianbin: The goal of BTC is to be a decentralized currency, and it has always done a good job with this goal.I think the BTC mainnet will not expand other financial functions for a long period of time, and this is the opportunity of the BTC layer 2 network.

Hacpy: Then BTC is not the currency of several countries, but the currency of the world, just as gold was recognized as a high-level currency in ancient times, BTC is a universal currency and will become the consensus of people around the world. Go abroad no longer have to worry about the problem of different national currencies, just take BTC, the earth really becomes a village.

Teco: We mentioned earlier that taproot upgrade will bring three important effects, lower transaction fees,enhanced privacy protection and the ability to create smart contracts, which sounds very cool, but it is true that now people’s idea of Bitcoin is“digital gold”, this idea may have been formed for decades, if the taproot upgrade can really achieve this effect, then those who support Bitcoin as digital gold will not think Bitcoin is less pure, this is an interesting topic.

Of course, from the technical and application level, the upgraded bitcoin can indeed bring a lot of imagination, take the Lightning Network, a recent overseas report showed that the Lightning Network increased its capacity from 1100 to 1200 in 39 days,and the recent from 1200 to 1300 took only 34 days, Arcane Research reports that in less than six months the Lightning network has grown by 70%, the increase is becoming more and more obvious.

Why am I talking about the Lightning Network here, because the purpose of the lightning network is to improve the efficiency and ease of use of Bitcoin transactions, probably most people do not notice this data, in fact, it reflects the market demand for Bitcoin fragmented transactions, and taproot upgrade can greatly improve the security and performance of the Lightning Network, which is bound to help further growth, I think this is the most intuitive change, not to mention the improvement of other functions, so the Bitcoin taproot upgrade is really worth our attention and research.

8. Will the future BTC developer ecosystem surpass the Ethereum developer ecosystem?

Jianbin: From the current observation,for newcomers to join the blockchain industry, when it comes to smart contracts, the first thing that comes to mind is Ethereum.The Ethereum developer ecosystem is far more active than the BTC developer ecosystem.

In the short term, the BTC developer ecosystem will not exceed the Ethereum developer ecosystem.

Hacpy: This is inevitable, so many developers of Ethereum are this market value may be that it is worth so much, but the market value of BTC is much more than this market value, with the upgrade of Taproot, BTC’s most important scalability problem is solved,there will be a lot of developers to compete for the value of BTC has not yet been released.

Teco: At the end of last year, Electric Capital, a crypto venture capital firm, released a developer report that describes the development of the Ethereum ecosystem.In the figure below, we can see that since Q3 of 2019, Ethereum has an average of 300+developers joining every month,while there are currently more than 3,000 dApps (decentralized applications) on Ethereum, and the Ethereum pattern can be described as a blooming existence.

The growth rate of developers on Ethereum has indeed exceeded that of Bitcoin,and this is essentially because of the limitations of Bitcoin’s current network,it can not carry so many developers, and there are no objective conditions to create a development ecosystem, which fundamentally limits the development of Bitcoin network ecology.

But the taproot upgrade we mentioned earlier can fundamentally solve some of Bitcoin’s problems,so we can foresee that this will bring a huge change to the Bitcoin ecosystem,there will also be DApp applications based on the Bitcoin network, or DeFi applications, and this will attract more developers to this new track, personally expect the future of the Bitcoin ecosystem developer ecosystem will be much higher than the current growth rate,and may even be on an equal footing with the Ethereum ecosystem.

9. Who is the developer of BTC and how is the development going now?

Jianbin: The current BTC developers are mainly BlockStream. Technically, they have been expanding the underlying protocol of BTC, but every time the proposed BTC mainnet upgrade will be blocked with the BTC miner community.

Hacpy: The original developers of BTC were Satoshi Nakamoto and Gavin Andresen,and the subsequent core developers were Gavin Andresen, Pieter Wuille,Nils Schneider, Jeff Garzik,Wladimir J. van der Laan, Gregory Maxwell, BTC development has been active, but unlike the general software, BTC upgrades are determined by the community, so BTC releases will not be too frequent,this taproot upgrade has long been developed, and is now mainly deployed on the testnet.

10. Where are the BTC miners in China?Can they join the BTC developer ecosystem and promote the NFT market of BTC?

Jianbin: BTC miners are not a technology development group.From the technical path of BTC, it has always been to reduce the on-chain fee, and downgrading the on-chain fee means that the income of BTC miners decreases.

The BTC developer ecosystem is not necessarily a place for BTC miners,but the BTC community ecosystem is not necessarily a place for BTC miners.For ChainX2.0, BTC miners are partners that can be explored.

Hacpy: Absolutely, in fact, locking BTC in the BTC network is far better than releasing it, so that miners can make a second profit on the basis of mining.

Teco: First of all, we need to know that there are a lot of Bitcoin miners in China who do not understand the other areas of Crypto, so their faith in Bitcoin may just stay in the concept that it is“digital gold”and“mining has a profit”, so it takes a little time for them to do the developer ecosystem to understand the thing itself.

On the other hand, there are also Bitcoin miners who know Crypto well,and this part of the people are also believers in Bitcoin maximalism,and I believe they will be interested in this“new Bitcoin”.

As for the NFT market, I recall the NFT players around me, as if some of them are also Bitcoin supporters,of course, this is not a sufficient condition, you can also not understand Bitcoin but does not affect the understanding of NFT, so from this logic, the NFT on Bitcoin may attract some Bitcoin players to enter, after all, an NFT on BTC or an NFT born on BTC is still monumental,at least I will participate.