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Thirteen years after the world’s first purchase of pizza in bitcoin (BTC), the pioneering cryptocurrency network is facing a new wave of disruptions thanks to the emergence of Ordinals, a recently launched protocol that allows digital content such as art, i.e., non-fungible tokens, to be added to bitcoin. blockchain.
Since the launch of Ordinal NFT on the Bitcoin mainnet in January 2023, there has been a significant increase in network traffic, which has dramatically increased transaction costs and brought attention to the problems associated with Bitcoin.
The Bitcoin mempool, the “holding zone” for incoming transactions on the network, contains over 286,000 pending transactions at the time of writing. Although this number is below the peak of 400,000 blocked transactions at the beginning of the month, it still remains historically high.
In an interview with Cointelegraph’s Joe Hall during Bitcoin Builders last week, Munib Ali, CEO of Trust Machines, explained how the Ordinals NFT hype could support Bitcoin in attracting more developers and capital to Layer 2 solutions.
“Bitcoin is the biggest asset. We need to have the best developers, the best scientists, trying to work on second-tier bitcoin,” Ali said. He believes the surge in fees has provided developers and investors with clear evidence that layer 2 protocols for Bitcoin are in demand.
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The goal of Layer 2 solutions is to improve the scalability, privacy, and other characteristics of a Layer 1 blockchain such as the Bitcoin network. Ali’s Trust Machines is a layer-independent ecosystem for Bitcoin applications built on the various layers of the Bitcoin network.
Ali claims that there is $500 billion of untapped market potential in the BTC network, referring to BTC’s current market capitalization of $521 billion. Products, users, and the amount of Bitcoin sent through the Lightning Network (LN), a layer 2 payment solution built on top of its blockchain, has skyrocketed in 2023. Despite the numbers, the bitcoin space continues to compete for developers and there are no entities “playing the game,” Ali explained.
Bitcoin is, according to the CEO, “so decent,” an advantage that may still hinder the development of a robust developer ecosystem. “No marketing department, no fund, no incentive. That’s why it’s decentralized at the grassroots level and the most decentralized.”
Raising bitcoin fees could attract more developers but will not unlock its global potential unless Tier 2 solutions gain traction as a category of venture capitalists, Ali defends. “If, collectively, Bitcoin Tier 2 is a very attractive category, and there is better education as to why it is interesting, that is also a narrative. I think the community can have a very broad outreach and there are a lot of bitcoin supporters.”