Bitcoin drawing inspiration from another blockchain may seem unlikely since it was the pioneer. Bitcoin inspired Litecoin, Dogecoin, Monero, and Ethereum, among others.
However, over the past 15 years, the industry has evolved significantly.
While Bitcoin’s dominance remains, the focus has shifted from simple “buy and hold” strategies to various methods of deploying digital assets for yield, revenue, and entertainment.
Most of this innovation has come from Ethereum and its multi-token, multi-chain ecosystem. Now, the trend is swinging back to Bitcoin.
With the introduction of layer-2 solutions, native tokens, nonfungible tokens (NFTs), and decentralized finance (DeFi) protocols, Bitcoin has the potential to see significant growth in active users, total value locked (TVL), and active wallets.
Can Bitcoin replicate the growth Ethereum saw in 2017 and 2020, driven by initial coin offerings and DeFi? By adopting certain features of Ethereum, Bitcoin could experience exponential growth.
A key feature is interoperability. Ethereum’s success with multi-tokenism is partly due to universal standards like ERC-20s, which are easily transferable between EVM chains.
Bitcoin, however, faces issues with competing token standards and inscription methods, making its ecosystem more complex.
Bitcoin has several competing token issuance standards and a complex L2 ecosystem. Stacks is the largest Bitcoin L2, followed by the Lightning Network, among many others.
For Bitcoin to become a hub for DeFi, NFTs, real-world assets (RWAs), and other on-chain uses, it needs to adopt universal standards that facilitate seamless value transfer between chains.
If Bitcoin developers collaborate instead of working in isolation, its ecosystem could grow significantly across metrics like daily active users and TVL.
Bitcoin’s TVL of $1.15 billion is far behind Ethereum’s $65 billion.
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However, Bitcoin’s current TVL is similar to Ethereum’s just before “DeFi summer,” suggesting potential for rapid growth.
In 2016, Ethereum’s ICO craze began, and by 2017, over 75% of crypto assets were based on Ethereum. By 2020, Ethereum shifted focus to DeFi and NFTs.
Although Ethereum’s NFT sector has declined, Bitcoin Ordinals have gained traction, indicating a rebranding rather than a decline in NFTs.
The rise in BRC-20 tokens and network activity suggests Bitcoin could see similar growth patterns to Ethereum in 2018. With over 14,000 tokens built on Bitcoin, user perception of BTC’s value increases.
Bitcoin might be on the verge of a parabolic breakout, with BRC-20 tokens’ market cap exceeding $2 trillion and significant growth in inscriptions.
Bitcoin developers should learn from Ethereum’s innovations to foster exponential growth. Despite potential regulatory challenges, even modest growth could significantly increase Bitcoin’s value.
By adopting successful strategies from Ethereum, Bitcoin could transform into the world’s largest multi-token ecosystem by 2025.
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