#BTC is not a virtual currency, but a tangible currency. However, cryptocurrencies based solely on Blockchain are virtual currencies.
Blockchain does not solve the decentralization problem; it only addresses the transparency of trust in code. The solution to decentralization is: a digital state individual sovereignty human-machine interaction-like mapping similar to UTXO and the perception of reality in a distributed P/NP model.
Four major technological directions to scale #Bitcoin.
For the past 10 years, we have been contemplating how to scale the #Bitcoin network. With a deeper understanding, we now have a more comprehensive view of the technological directions to scale #Bitcoin.
To scale #Bitcoin, one must first understand what #Bitcoin is.
#Bitcoin is a CAS (Complex Adaptive System) composed of three types of formalized subsystems.
The three types of formalized subsystems are:
- 1. Individual sovereignty: A 1:1 digital state and individual self-mapping (i.e., UTXO in Bitcoin).
- 2. P/NP perception of reality: Machine understanding and perception of natural reality achieved through asymmetric solving and verification (i.e., POW in Bitcoin).
- 3. Consensus intermediary of trusted code: A notarization and execution environment based on code consensus (i.e., Blockchain in Bitcoin).
Based on the above understanding of #Bitcoin, we can identify four major technological directions to scale #Bitcoin.
First: Expanding applications based on UTXO-like individual sovereignty. A typical example is the BRC20 or OmniLayer protocol, which is currently limited to assets. We can attempt to expand into new applications such as DID (Decentralized Identifiers).
Second: Expanding the P/NP perception of reality subsystem. For example, BTC's POW mining pool protocol is a type of vertical expansion technology based on BTC POW. However, we can explore horizontal expansions based on P/NP to advance the real-world adoption of cryptocurrency technology, thereby serving the real economy.
Third: Blockchain technology. This is the most resource-intensive exploration direction in the entire cryptocurrency space and the most comprehensively explored technology. Technologically, it has become largely transparent. Blockchain addresses the transparency of trusted code rules. In areas like DeFi, compared to traditional finance, it adds transparency.
Fourth: The largest and most significant direction is to reference Bitcoin's CAS technological approach, which integrates the above three directions to create new CAS products similar to Bitcoin. This is the most promising track and the one we have long overlooked because we often fall into the trap of localized thinking.
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