Gate.io Market Watch: Is “Layer 2” Bitcoin Becoming the New Narrative?

Stacks, a “layer 2” network on Bitcoin, has experienced a surge in popularity as the price of its native token, STX, recently skyrocketed more than 200% over 14 days. Described in its whitepaper as “a Bitcoin layer for smart contracts,” Stacks does that exactly, bringing smart contract functionality to the original, longest-running blockchain.

Bitcoin Smart contracts, NFTs, and more

While smart contracts are nothing new to the crypto world, they are mostly untapped territory in Bitcoin, at least when compared to Ethereum’s gigantic ecosystem. The spiking interest in Stacks smart contract protocol came after Ordinals went live last month, which unlocked NFT-like functionality for Bitcoin users.

Ordinals are still a new phenomenon but are already gaining a lot of traction, so much so that Yuga Labs, the company behind the massively successful NFT collection Bored Ape Yacht Club, is debuting its next NFT project on Bitcoin.

Furthermore, the Lightning Network, the most prominent protocol built on top of Bitcoin, became well-known due to its ability to scale the Bitcoin network, allowing near-instant BTC transactions. In addition, the protocol helped El Salvador legally adopt Bitcoin, becoming the first country to do so. It has even been integrated into stores worldwide and online platforms like Twitter.

Bitcoin’s future is full of new possibilities

Regarding development in the Bitcoin ecosystem, the crypto exchange Gate.io said, “Bitcoin is widely considered the most secure and decentralized blockchain, but it was not purpose-built for the types of highly complex smart contracts found on Ethereum. However, this hasn’t stopped the Bitcoin ecosystem from expanding or developers from pushing its perceived limits. Regardless, there’s still room to grow and new use cases to be unlocked.”

Building protocols on top of Bitcoin that bring similar functionality and features found in other blockchains is challenging. Many characteristics make Bitcoin different than other chains like Ethereum. For those looking to expand their understanding, Gate Learn is a great place to learn about how Bitcoin and other blockchains work, featuring content from beginner to advanced levels that will help you navigate the world of cryptocurrency.