On August 6, CKB Chinese held a Space on the topic "Is the market not favorable? How should the BTC ecosystem survive in adversity?" Invited were builder Hamburger from the Seal community, Community Lead Adam Lee from Stable++, builder Elder Tang from Pizza, Shaqima from Puppet Chinese, builder Kumi from Ordinals, and CEO and co-founder Zeming from DotSwap.
This Space lasted nearly 2 hours in total. Friends who haven't had a chance to listen yet are welcome to catch the audio replay when they have time: https://x.com/CKB_CN/status/1820790395045081401
Below are some key points shared by the guests based on the audio replay (the full text is about 8000 words, it is recommended to bookmark it before reading):
1#
Host: We see that during this major drop, Bitcoin, as the strongest consensus blockchain, has shown its position as the industry leader, with its price relatively holding up against other cryptocurrencies. Do the guests believe that the Bitcoin ecosystem has maintained this relative stability? What stage is the Bitcoin ecosystem currently in? Compared to the Solana and Torn ecosystems, has its leading position in the community reached a consensus?
Zeming: Regarding Bitcoin, I personally am not particularly optimistic. The main reason is that Bitcoin's capabilities are currently very limited, with all narratives focused on its store of value function. From the perspective of value storage, it currently resembles a Ponzi scheme, ultimately needing someone to take over. We have already opened up various paths from the stock market to ETFs; should we now look for more takers in extraterrestrial civilizations?
Nevertheless, I remain optimistic about the prospects of building a richer application layer in the Bitcoin ecosystem. The key lies in the need for long-term sustained utility, gradually providing value transfer and storage tools on this basis. In the short term, changes in supply and demand and fluctuations in user sentiment will have a significant impact on prices.
Elder Tang: My view is contrary to that of Teacher Zeming. I don't understand why using Bitcoin as a store of value equates to a Ponzi scheme.
Firstly, the recent crash was caused by liquidity risks in the financial system. Currently, the main safe-haven assets in the world are U.S. Treasury bonds and gold. Treasury bonds are the best type to guard against liquidity risks, while gold is a typical store of value asset that can guard against inflation, liquidity, and decentralized finance risks.
Bitcoin is also a typical store of value asset, even superior to gold in terms of decentralized finance, cross-border transfer, and portability. Bitcoin is still in its early stages, exhibiting duality: it is both a risk asset and a safe-haven asset. It can long-term avoid inflation risks (fiat currency issuance risks), but in the short term, due to insufficient liquidity, it cannot evade liquidity risks.
The four attributes of currency are: divisibility, portability, scarcity, and durability. Bitcoin, as digital gold, fully meets these four points and has global consensus. The U.S. also defines it as a commodity.
Regarding the Bitcoin ecosystem, I disagree with Teacher Zeming's view. As a layer one chain, Bitcoin's infrastructure is relatively weak. The BIP-420 standard is currently being developed, but there is still a significant gap compared to virtual machines like Ethereum. The possibility of developing the ecosystem on Bitcoin's layer one is very small. Most Bitcoin layer two chains are actually sidechains that do not inherit Bitcoin's consensus. CKB is one of the few projects worth paying attention to, as it lies between sidechains and layer two chains.
In the short term, the most meaningful aspect of the Bitcoin ecosystem is Meme Coins, but their market capitalization still lags behind other chains. It is very difficult for Bitcoin to develop its ecosystem independently, but as the safest and most trusted chain, it can become the ultimate ledger for assets.
The future direction of Bitcoin's development: 1) as a store of value currency; 2) developing some quality Meme Coins; 3) as the ultimate ledger, jointly promoting ecosystem development with other public chains.
Hamburger: I completely agree with Elder Tang's viewpoint. In recent years, the voices claiming that the cryptocurrency market is a Ponzi scheme have decreased significantly. Giants in the traditional financial sector, such as BlackRock, have already begun to lay out plans to promote Bitcoin ETFs. The actions of these large funds indicate their confidence in the cryptocurrency market.
During the recent market fluctuations, analysts have been focusing on the outflow of funds from ETFs like GBTC and IBIT. If there is no large-scale fund escape, it indicates that these large enterprises believe that extreme market conditions are merely caused by market sentiment rather than changes in economic fundamentals. Since so many large enterprises and financial giants are in the market, we have no reason to deny Bitcoin's value.
Bitcoin may be undergoing a transformation. In the past, Bitcoin often exhibited an inverse relationship with gold. However, recently, with the approval of ETFs and a large influx of funds, as well as market expectations of the decline of the U.S. and challenges to dollar hegemony, Bitcoin is gradually shifting from a risk asset to a safe-haven asset in the eyes of capital, becoming an acknowledged category of value storage.
Regarding the construction of the Bitcoin ecosystem, it is indeed still in its early stages. However, considering Bitcoin's strong value storage capability, it is logical that more new play styles will emerge, requiring the joint development of the entire ecosystem and layer two technologies.
Although the leading position of the Bitcoin ecosystem has not yet formed a strong consensus within the community, with the development of DeFi and PoS, people are increasingly nostalgic for Bitcoin's stability and value storage function. The Bitcoin ecosystem is beginning to break away from imitating Ethereum, with voices emerging that Ethereum's ecosystem is an experimental version of the Bitcoin ecosystem.
In the future, the leading position of the Bitcoin ecosystem is expected to reach a consensus. This is not only due to Bitcoin's significance to the entire crypto circle but also because it inevitably bears the responsibility and status as the most recognized cryptocurrency in the traditional world.
Adam Lee: Recently, affected by geopolitical shocks and fluctuations in the financial market, Bitcoin has dipped below $50,000, with Ethereum experiencing even larger declines, impacting the entire cryptocurrency ecosystem and causing fluctuations in investor confidence.
As the leader in the blockchain field, Bitcoin has maintained a high level of interest, being regarded as an excellent means of value storage and financial product. However, the development prospects of the cryptocurrency industry depend on various factors, including technological advancements, market acceptance, regulatory policies, and the global economic environment.
Although there is uncertainty in regulatory policies, the Federal Reserve's interest rate hike policy is nearing its end, and more funds are expected to flow back into the market. As the blockchain with the strongest consensus and highest market acceptance, Bitcoin is likely to see more capital inflow in the fourth quarter of 2024 or 2025. We hold an optimistic view on Bitcoin's subsequent development.
The Bitcoin ecosystem is diversifying, with both EVM sidechain solutions and UTXO camps. CKB is an excellent technical solution, and its RGB protocol upgrade and Cell model improvements can bring efficient, smart contract-supporting solutions to Bitcoin without the need for cross-chain.
With the emergence and development of Bitcoin layer two solutions, especially CKB, Bitcoin may no longer be limited to the concept of "decentralized digital gold" but expand into a decentralized application infrastructure. This could lead to significant changes in Bitcoin's narrative logic, benefiting its development.
Considering Bitcoin's massive market size and highest consensus, along with technological breakthroughs and innovations, I hold an optimistic view of its future prospects.
Shaqima: From a macro perspective, the cryptocurrency track is mainly composed of sellers (project parties, institutions) and buyers. The level of competition in the industry has reached a bottleneck. Although the Ethereum ecosystem is comprehensive and convenient, it has also raised the participation threshold for new projects. Successful projects on Ethereum often have to go through fierce competition, ultimately evolving into capitalized operations.
In contrast, the Bitcoin ecosystem currently resembles an undeveloped wasteland, akin to a new continent. There are no established rules here; one can imitate existing models or create entirely new ideas. For many, this is a low-cost, high-opportunity field. As long as there is creativity, anyone can participate and potentially reap rewards.
Many overseas and Chinese project parties choose the Bitcoin ecosystem because they believe it is easier to gain attention and development opportunities here. Compared to Ethereum, the Bitcoin ecosystem can provide them with faster and more intuitive returns.
The market may currently face liquidity exhaustion and pessimistic sentiment, but these issues are expected to be resolved. Although individuals may find it difficult to have a significant impact on top-level design, Bitcoin holders, ecosystem investors, and institutions are still influencing market trends. Given the massive capital market, it is unlikely that the Bitcoin ecosystem will collapse.
As long as there is profit to be made, this field will not lack participants. We can predict the timing of large-scale capital inflows by observing patterns and looking for clues. Currently, we should focus on finding quality projects worth investing in.
Kumi: The overall atmosphere in the community is not as good as before, but some leading projects like BRC-20 and Runes are still developing. The voices of small and medium-sized projects have weakened, which aligns with the trend of capital and traffic concentrating on leading projects.
Regarding Meme Coins in the Ethereum and Bitcoin ecosystems, from a market capitalization perspective, Meme Coins in the Bitcoin ecosystem may have more room for growth. In terms of resilience against declines, the two are not significantly different.
Meme Coins in the Bitcoin ecosystem face some issues, mainly due to insufficient cultural attributes and dissemination strength. In contrast, Meme Coins in the Ethereum ecosystem have stronger cultural connections and storytelling. Currently, Meme Coins in the Bitcoin ecosystem rely more on promotion and speculation, lacking deeper cultural connotations.
I hope that during the development of projects, more cultural attributes can be infused, rather than just speculative tokens. The Bitcoin ecosystem should convey its core values, bringing emotional value and other benefits to users. Currently, Meme Coins in the Bitcoin ecosystem are not as culturally impactful as some well-known projects on Ethereum and Solana.
Regarding the community's tendency to focus on wealth effects rather than technology, from the perspective of retail investors, it is understandable to enjoy making money. The important thing is to establish connections with community members during this process, transforming online acquaintances into real-life friends, sharing life experiences and investment insights.
From the project party's perspective, being overly focused on short-term benefits may not be ideal. However, I personally prefer to feel the positive energy of the community while making money, which is a good signal.
2#
Host: Last week, a Solana video sparked heated discussions, mocking the community's lack of interest in technology while being keen on airdrops and other actions that create wealth effects. What challenges and impacts will the Bitcoin ecosystem face from such a profit-seeking community? Will ecological strategies change due to community preferences?
Hamburger: The video reflects two issues: first, there are more project parties than users; second, the community only focuses on profits and does not value technology.
The phenomenon of having more project parties than users may be due to the ecosystem not being mature enough, lacking real-world applications. Many project parties do not even use their own developed products. This contrasts with the entrepreneurial environment in the real world, where a multitude of entrepreneurs is often seen as a positive signal.
In the cryptocurrency field, this phenomenon may arise because many projects lack a real user base, and project parties are not users of their own products. This differs from the situation in the real world, where entrepreneurs are both developers and users.
Currently, many projects operate in "thin air," lacking real users and application scenarios. Such projects are the most vulnerable during market fluctuations. The recent market adjustment may be a process of de-bubbling, eliminating false projects while retaining those that are genuinely valuable and can interact with the real world.
The Bitcoin ecosystem may not be significantly affected by the community's profit-seeking behavior or change its strategy. Bitcoin itself is not flexible enough to make major changes. However, as an emerging ecosystem, the Bitcoin ecosystem still attracts such community groups, as seen in various recent airdrop opportunities.
There are many researchers and developers in the Bitcoin ecosystem who can better assess project value and promote healthy ecosystem development. Therefore, the Bitcoin ecosystem has the capability to respond to the challenges mentioned in the video.
Adam Lee: Various solutions and protocols provided by CKB, Stacks, and other ecosystem developers have focused on the long-term potential of decentralized financial infrastructure. We should provide users with a more diverse ecosystem, including various financial service platforms and robust development tools.
A comprehensive and well-rounded ecosystem can bridge the gap between Bitcoin's market value and the DeFi world. As various solutions continue to emerge and technology continues to innovate, we indeed need to attract more new users to participate in the changes and progress of the ecosystem.
The community's enthusiasm for wealth effects and airdrops is not entirely wrong. We need more people to pay attention to, understand, and participate in the development of the entire ecosystem. This can help break the assumptions that "the community is not interested in technology" or "Bitcoin lacks programmability."
If we can leverage Bitcoin's massive market size to mobilize capital through ecosystem development, that may be the wealth effect we most look forward to and are most enthusiastic about.
Shaqima: Taking the recent Pizza event as an example, we can see some characteristics of the Bitcoin ecosystem. Although some are skeptical, believing there may be insider trading or conspiracy theories, these views also have their rationale.
In contrast, the Ethereum ecosystem has seen a lot of witch attacks, mainly due to uneven chip distribution under capital influence. Project parties hope to allocate chips reasonably to community builders and those who can drive community development.
Regarding the pizza event, two voices emerged in the community: one believes Pizza should be tied to Uniswap, while the other believes Pizza represents the culture of the Bitcoin ecosystem. This reflects a divergence in consensus. The positioning and direction of a project are crucial for its development.
If we connect pizza with the entire Bitcoin ecosystem and its future development, the prosperity of pizza can drive the prosperity of Bitcoin, similar to the role of early RDN. The vigorous development of the Bitcoin ecosystem will drive up Bitcoin's price, which is a common phenomenon in the industry.
Even without holding a specific project's tokens, promoting Bitcoin's rise can drive the development of the entire cryptocurrency market. Therefore, the establishment of community consensus is very important. If pizza is positioned as a product line of Uniswap, its development space will be limited; but if positioned as part of the Bitcoin ecosystem, its development space will be related to the entire Bitcoin.
For community builders and members, the main responsibility is to drive the project in the right direction. We need to eliminate information gaps as much as possible to avoid panic caused by information asymmetry.
In addition to the product itself, community culture is also an important factor for a project's survival. The cultural atmosphere can increase the stickiness of community members, rather than relying solely on price fluctuations.
Every project has its unique advantages, which are worth learning from other communities. Holding a project's tokens while being bearish is irresponsible behavior that lacks logical foundation.
Elder Tang: Human nature has demands; if assets continue to decline, that is not feasible. Therefore, I believe that in the future, there will be more and more assets for airdrops, and the rise of assets after airdrops will become more common. If there is no rise, the market will lack vitality. Additionally, I want to talk about how Bitcoin transforms from a risk asset to a safe-haven asset. This is actually achieved through repeated rises and falls. Although Bitcoin has been declared dead many times, it always manages to rise again. Bitcoin's widespread recognition is due to the market's repeated understanding and rises. For Bitcoin to become a safe-haven asset in the future, its market value needs to reach at least 1/3 of gold's, preferably half. This requires Bitcoin to continue rising to enhance people's confidence in it. As Bitcoin's liquidity increases, its risk resistance will also improve, attracting more liquidity and enhancing its safe-haven capability. This will stabilize Bitcoin's value, further open up upward space, and create a positive cycle.
For Bitcoin, the next key step is whether its ecosystem can nurture truly valuable projects to attract traffic and attention. Without excellent projects, the ecosystem will struggle to develop. Many people may not understand the technology well, but if the technology itself lacks community consensus and traffic, it is worthless. As a member of the technical team, I must emphasize the importance of community consensus. The Bitcoin ecosystem should not merely cling to its position but should recognize and learn from the strengths of other ecosystems to achieve true growth.
I believe that over time, Web3 and the entire cryptocurrency industry will achieve collaboration among various public chains. In the past month, the market capitalization of the seven major tech stocks has evaporated by as much as $2 trillion, which directly impacts the cryptocurrency market, including Bitcoin. Currently, the cryptocurrency market's share in the entire financial market is still very small, but the potential is enormous. Therefore, the road ahead is still long. I personally hold an optimistic view for the second half of the year, especially for Bitcoin and other potential Meme Coins. I believe that opportunities for technical projects may arise next year, rather than in the second half of this year.
Zeming: I believe that users are more important than the community because users are the source of product revenue. Although the community can attract more people, the real user base is the core of the product. Users create value through products; if they like and use the product, they will spontaneously form communities and become promoters of the product, attracting more people to use it, creating a virtuous cycle.
Operational means like token economics are more of a means than an end. We should not merely speculate to create assets but should attract real users. Of course, some projects may attract those looking to get rich quickly, but that is another matter.
For the normal development of projects, subsidies are a strategy to build network effects and achieve a certain scale of user base. For example, when we conduct swap transactions, we need to increase liquidity providers (LPs) and total locked value (TVL). Without sufficient trading volume, we cannot provide enough returns for LPs. In this case, subsidy measures become particularly important.
To attract users, we need to provide sufficient trading volume and fees to ensure users can achieve high returns. This requires community building so that users come not just for short-term subsidies but stay long-term. Just like Didi's early subsidy policy, we hope users can still receive substantial returns even without subsidies.
Whether for Web2 or Web3 products, their development logic is similar. Through token incentive mechanisms, we can establish a closer connection between users and assets and tokens, making them part of the product rather than just users. This is my perspective on community building, which may differ from some people's views.
3#
Host: Unlike ecosystems like Ethereum and Solana, there are significant differences in technological innovation within the Bitcoin ecosystem. For example, the isomorphic binding of RGB++, smart contracts, and bridge-less cross-chain technology seem to disrupt the status quo of EVM and bridge-based cross-chain. What technological innovations do you most favor? What is your project’s view on these technological innovations? Will they help the Bitcoin ecosystem rejuvenate?
Hamburger: The technology we in the community are most optimistic about is the isomorphic binding technology of the RGB++ Layer, smart contract capabilities, and bridge-less cross-chain technology. We are optimistic about these technologies because they not only have technical advantages but also receive broad support and understanding from the community.
The SEAL community does not disregard technology as mentioned in the Solana video. Many people in the SEAL community have gathered because they are optimistic about the technology of the RGB++ Layer. This is indeed a new route that does not require EVM, does not need centralized, easily attackable cross-chain technology, nor does it require pledging assets to issue air certificates. Isomorphic binding technology ensures security, and smart contract technology brings scalability, allowing us to reuse existing play styles and provide more new possibilities for the future.
As for whether these technologies will help rejuvenate the BTC ecosystem, I believe the BTC ecosystem is not currently in dire straits, so it is not necessary to talk about rejuvenation. Sidechains, Layer 2 technologies, or our RGB++ Layer are essentially layer two technologies. Currently, BTC has not reached the point where it needs to rely on layer two technologies for salvation. The recent market downturn is not due to BTC itself but rather a decline in global financial liquidity, which is a global financial issue, not specific to cryptocurrency.
If the following two situations occur in the future, we may need to consider using RGB++ Layer technology to help the BTC ecosystem. The first situation is if network congestion leads to continuously rising gas fees, users may seek other solutions. The second situation is if other Layer 2 solutions relying on centralized bridging technology suffer significant attacks, causing users to lose confidence in these technologies, then bridge-less cross-chain technology may become a solution to maintain security close to the Bitcoin network.
However, based on the current situation, I believe we are far from needing to view the BTC ecosystem so pessimistically.
Shaqima: I believe the key moving forward is to look at where the largest traffic flows are. Simply put, for current projects, regardless of market sentiment, as long as there is attention, there is an opportunity for projects to rebound. Projects with high visibility, especially those that can attract liquidity and attention, often see their value reflected in price. Additionally, we should differentiate user groups based on capital scale. While large capital users are few in number, most users do not have large capital scales. I believe the RGB++ project precisely attracts this large user base. From the perspective of project selection, some projects have very promising investment value in their early stages.
Kumi: From the current situation, I believe the Bitcoin ecosystem has not yet reached a decisive stage. It is normal for the market to experience significant fluctuations. From the perspective of technological innovation, projects like RGB++ are at the forefront, but due to the underlying technology of Bitcoin, we have not yet seen innovations that can bring entirely new play styles to the entire industry like the DeFi Summer of 2021. Of course, the Bitcoin ecosystem may experience sudden bursts of innovation in the future, but it is currently unpredictable.
For now, I recommend following projects with certain technological innovations. Although I do not see anything disruptive, the market capitalization of the Bitcoin ecosystem is substantial, and I believe these projects should perform well when the bull market arrives.
Zeming: I have several views on the development of the Bitcoin ecosystem. First, I do not believe that simply transplanting EVM to Bitcoin will achieve great success. The EVM series has already achieved great success on platforms like Ethereum, but Bitcoin is not an indispensable booster in this.
Secondly, I believe there should be a layer one protocol for Bitcoin before developing layer two technologies. If the layer one protocol cannot achieve interoperability and network effects, then the fragmented small networks will find it even harder to succeed. Therefore, we should explore new technological possibilities on layer one, such as utilizing new operators like OP_CAT, which may bring infinite possibilities to the Bitcoin transaction chain, including the inclusion of states, thus enabling the creation of complex contracts.
Moreover, Bitcoin's UTXO structure provides high performance and immutability, which may give rise to entirely new ecological applications. We should not simply replicate Ethereum's path but should leverage Bitcoin's technical infrastructure and consensus system, as well as its liquidity and asset diversity, to create unique applications.
For example, no one previously thought that a trading experience similar to Uniswap could be achieved on Bitcoin, but we did it. With the addition of protocols like Ordinals, more interesting creations can occur on Bitcoin, and this spread of consensus has just begun. We should explore different paths, such as CKB's client validation or layer one smart contract validation, to find technologies with broader application scenarios.
Currently, the Bitcoin ecosystem is indeed in its early stages, but as a project that has developed for over a decade, we should also expect to enjoy the fruits of our labor in our lifetime. I believe that the current views on the development of the Bitcoin ecosystem are somewhat overly pessimistic. More resources should be focused on interoperable protocols at layer one, which may align better with the values and consensus of global builders.
In addition to token protocols, there may be other interesting protocols emerging in the future, including bridging, scaling protocols, or stateful smart contracts, all of which will bring rich application possibilities to the Bitcoin ecosystem.
4#
Host: Where do you think the future of the Bitcoin ecosystem will head in the process of exploring diversified development? What new possibilities and surprises will it bring to the industry and the community?
Hamburger: I am quite optimistic about Bitcoin as a representative of blockchain technology, as it has a strong influence in the financial sector. Bitcoin can become an empowering product that accelerates project efficiency and changes user consumption structures, integrating with the external world. Bitcoin has the strongest consensus and broad support from builders, meeting the security needs of traditional industries in layer two technologies and gaining recognition from potential capital.
I believe that if someone wants to merge the advantages of Web3 with Web2 industries, utilizing Web3 to empower traditional industries, it will first happen on Bitcoin. Because Bitcoin has widespread recognition and universal historical representation. I look forward to the future where the Bitcoin ecosystem can achieve substantial integration with the Web2 industry, truly applying blockchain technology to traditional products and bringing about substantial change.
Shaqima: I believe the development of the Bitcoin ecosystem follows certain patterns and rhythms. From Bitcoin to supply chains, DeFi, NFTs, and then to GameFi, each stage has its unique narrative. The Bitcoin ecosystem has gone through all these stages in a short time, which is reasonable as it needs time to digest and adapt. I believe that in the future, a certain track will create a huge wave, attracting capital injection and ushering in a new round of development for the Bitcoin ecosystem.
The Bitcoin ecosystem cannot disappear because it involves too many interest groups. As long as the overall direction remains unchanged, we should look for quality projects to drive industry development. Most people can make money in this industry as long as they do not pursue excessively stimulating returns.
Kumi: I hold an optimistic view of the future of the Bitcoin ecosystem. From the perspective of infrastructure construction, many projects are fully committed to ecosystem development. As a user, I hope to establish more connections with quality projects. Participants in the Bitcoin ecosystem are usually less impatient and focus more on long-term development and beliefs.
I believe that through continuous construction, some excellent projects and significant breakthroughs will emerge. We just need to follow the pace of the ecosystem, whether promoting development or participating in infrastructure construction, to bring prosperity to the Bitcoin community.
Zeming: Although we focus on swap projects, I believe the Bitcoin ecosystem should not be limited to the perspective of DeFi. Tokens are merely a means; we cannot build all products on a token economic model. Bitcoin's characteristics, such as openness, verifiability, and traceability, may have more potential in commercial applications, such as contract verification and execution, as well as reducing cross-border trade costs.
I believe the Bitcoin ecosystem can encompass more things; it may start from the token perspective, but there may be broader development paths in the future. We should not only see the token logic but should explore more possibilities within the Bitcoin ecosystem.
Host: Thank you all for your sharing, providing us with confidence at this critical moment of industry reconstruction. The road ahead is long, and we need to unite with the community to weather the storm together. I hope we can work together to promote industry development.