Bitcoin Layer2: An Outdated and Meaningless Entrepreneurial Direction

As I began to delve deeper into the Bitcoin Layer 2 space, I gradually realized that this might be a false proposition. After long-term tracking and analyzing multiple Bitcoin scaling technology teams, I have come to some thought-provoking conclusions.

First of all, Bitcoin itself does not need Layer2 solutions. On the contrary, it is the cryptocurrency industry that needs to leverage the value of Bitcoin. Layer2 is essentially just a business model, rather than real blockchain technology. More importantly, Layer2 cannot actually help the main chain achieve scalability; it only creates some application scenarios for the main chain tokens, most of which are simple imitations of Layer1, lacking real innovation.

A typical example is a Bitcoin startup team. They initially actively promoted Bitcoin Layer 2, but in 2024 they completely changed their strategy and turned to a brand new development direction. The reasons behind this shift are worth our deep contemplation.

Layer2: An Imagined Demand

The concept of Layer 2 originally comes from the simple payment verification (SPV) scheme mentioned in the Bitcoin whitepaper. This concept gave rise to the Lightning Network, which indeed helped Bitcoin achieve "scalability" in terms of transactions to some extent. However, when this model was applied to other blockchains, the effects were quite different.

Taking a certain well-known public chain as an example, its Layer 2, while able to share the security of the main chain, has not truly helped to scale the main chain. It merely adds some use cases for the main chain tokens. This difference mainly stems from the underlying architecture: Bitcoin uses the UTXO model, while this public chain adopts a unified account model.

The UTXO model simulates cash transactions, allowing for concurrent processing and local state updates. In contrast, the unified account model relies on a global state tree, which limits its scalability. Therefore, most Layer 2 solutions do not actually address the fundamental issues of the main chain.

Layer2: The business of the project party, unrelated to retail investors.

It is worth noting that almost all Layer 2 projects are centralized. They do not have a true consensus mechanism or the concept of nodes, and their operation relies solely on official sequencers. This essentially makes Layer 2 a type of private chain, lacking the core characteristic of decentralization.

The practicality of Layer2 tokens is also questionable. Without the demand for node staking, gas fees are usually paid using main chain tokens, and the so-called governance role often remains nominal. In fact, the main source of revenue for Layer2 projects comes from gas fees, which makes it an attractive business model.

More and more business entities are beginning to realize this and are launching their own Layer2 solutions. This trend indicates that Layer2 is becoming a closed commercial ecosystem, which is not closely related to the interests of ordinary users.

Bitcoin does not need Layer 2, the industry needs Bitcoin

Bitcoin itself does not require a scaling solution. On the contrary, the entire cryptocurrency industry needs to leverage the value of Bitcoin. Many projects attempt to integrate Bitcoin into other ecosystems, but these efforts reflect more the industry's demand for Bitcoin rather than the demand of Bitcoin itself.

The true value of Bitcoin lies in its network itself, not just as a digital asset. As Bitcoin gradually comes to be seen as a potential national reserve asset, we need to think about its future development direction. An interesting perspective is that Bitcoin could become the currency for on-chain AI and a decentralized control system for AI consensus issues.

This approach positions Bitcoin as a constantly evolving decentralized state change machine, whose consensus capability and security can meet the future demands of humanity and AI. This opens up a whole new development direction for Bitcoin, far beyond the traditional Layer 2 concept.

Conclusion

Bitcoin Layer 2 has become an outdated and lackluster entrepreneurial direction. As Bitcoin enters a new stage of development, the value of its network itself has yet to be fully realized. The most promising entrepreneurial direction in the future should revolve around the Bitcoin network itself, exploring the important role that this continuously growing decentralized control system may play in the era of coexistence between humans and AI.

We need to rethink the potential of the Bitcoin network, not just focus on its aspect as a digital asset. This may be the true treasure left to humanity by Satoshi Nakamoto; perhaps he indeed came from the future, bringing us a system that far exceeds our current understanding.