The Block
(Photo : The Block)

Teams of dedicated builders and developers aim to unlock the full potential of the Bitcoin network. As a result, several ecosystems are emerging on top of the world's most valuable and secure blockchain. Ranging from the Lightning Network to Rootstock and Stacks, tremendous opportunities are ahead, as revealed in the latest report issued by theBlock this June.

Bitcoin Isn't Just About BTC

Many people associate bitcoin - the cryptocurrency - with Bitcoin, the network. However, they often think BTC is all there is to Bitcoin, as the blockchain lacks scalability, offers no smart contract functionality, and seems to play a virtually neglectable role in the world of decentralized finance, NFTs, blockchain gaming, etc. However, that is no longer the case, as several ecosystems have been established on top of Bitcoin.

The ongoing development of these ecosystems has given birth to three distinct "contenders":

  • The Lightning Network: the native Layer-2 scaling solution for Bitcoin

  • Rootstock (RSK): merge-mined with Bitcoin and brings Ethereum Virtual Machine compatibility to the Bitcoin network

  • Stacks: the smart contract layer for Bitcoin which settles transactions on Bitcoin through the Proof of Transfer mechanism

It is intriguing to see every individual ecosystem focus on improving one particular aspect of the Bitcoin network today. The Lightning Network can take Bitcoin into the mainstream for [micro]payments thanks to its fast settlement and very low fees. Additionally, RSK makes Bitcoin compatible with the EVM and networks supporting this technology, which offers tremendous multichain potential.

Last but not least, Stacks introduces a feature Bitcoin truly needs: smart contract functionality. Ethereum and other networks have taken some of Bitcoin's spotlight due to their support of smart contracts. It makes sense for builders to explore that functionality on the most secure and immutable network there is.

Solid Growth Across The Board

Thanks to these three distinct ecosystems, the Bitcoin network has become more versatile than ever before. That becomes even more apparent when looking at the image below depicting the different ecosystems and teams building on those technology stacks. There is healthy developer interest in exploring the Lightning Network, RSK, and Stacks to introduce the next generation of Bitcoin-powered applications, products, and services. 

Primarily the interest in smart contract technology will be worth keeping tabs on. While it is good to see Bitcoin advance for payments and EVM compatibility, the smart contract layer by Stacks is in a prime position to unlock broader functionality. As enthusiasts will know, smart contracts are used for various purposes, ranging from decentralized finance to NFTs and blockchain gaming to data management. 

Stacks has already made inroads in several industry verticals, enabling support for non-fungible tokens in Q4 2021. That deployment significantly increased the interest in Stacks smart contract deployment. Stacks' overall adoption is slower than Lightning Network and RSK, although the layer makes using its Clarity coding language a mandatory requirement. There is a need for better tooling for developers to build, which is currently in development courtesy of Trust Machines and other providers.

The Block
(Photo : The Block)

Moreover, Stacks is catching up to other EVM-compatible ecosystems. The overall growth of Ethereum, BNB Chain, Polygon, Avalanche, and Fantom has seemingly hit a glass ceiling. However, Stacks still has much room for growth, and with the correct and user-friendly tooling, that gap can be bridged relatively quickly. Its current daily transaction count is well below the 10,000 mark, but it is also a much newer ecosystem than these EVM-compatible competitors.

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