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Layer-2
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Discussion: Does Bitcoin need Layer-2s?

Mar 29, 2024 ⋅  9 min read

Recent developments in the Bitcoin ecosystem, such as the surge in Ordinals, Inscriptions, and the introduction of BitVM, reflect a shift towards enhancing Bitcoin's functionality with Layer 2 solutions. Despite challenges and a conservative upgrade approach, initiatives like Babylon and BitVM aim to broaden Bitcoin's utility, potentially reshaping its role in the blockchain landscape. While Bitcoin's Layer 2 ecosystem may lag behind other ecosystems in some aspects, strategic partnerships and a focus on expanding use cases demonstrate the potential for Bitcoin to evolve into a centralized hub for shared security and innovation.

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Nikhil is a Researcher focused on Web3 Infrastructure and Decentralized AI. Previously he was leading BD at Upshot and prior to that was working on growing Avalanche at Ava Labs.

Kinji is a former research analyst covering crypto at Morgan Stanley. His primary interests are DeFi, Infra, and unstable stablecoins.

Kunal previously worked in equity research and now considers himself a financial analyst in crypto. He specializes in valuation and bottom-up analysis for Layer-1 and DeFi protocols because he has yet to learn of a way to value NFTs.

Mentioned in this report

About the authors

Nikhil is a Researcher focused on Web3 Infrastructure and Decentralized AI. Previously he was leading BD at Upshot and prior to that was working on growing Avalanche at Ava Labs.

Kinji is a former research analyst covering crypto at Morgan Stanley. His primary interests are DeFi, Infra, and unstable stablecoins.

Kunal previously worked in equity research and now considers himself a financial analyst in crypto. He specializes in valuation and bottom-up analysis for Layer-1 and DeFi protocols because he has yet to learn of a way to value NFTs.

Mentioned in this report