Bitcoin, the decentralized finance (DeFi) movement, also known as BTCFi, has gained popularity with the introduction of Ordinals and BRC-20 tokens. In episode 47 of the Cointelegraph’s Hashing It Out podcast, Jeff, the founder of Merlin Chain, a native Bitcoin layer-2 network, discusses the evolution of the BTCFi movement from BRC-20 to BRC-420, the challenges faced by layer-2 networks and Bitcoin, and the positive impact of building utility on the network.
Jeff explains the difference between BRC-420 and BRC-20, stating that BRC-20 enables developers to create and mint tokens, while BRC-420 focuses on modularized data and tokenized modules. He provides an example of how an artist can utilize BRC-420 to distribute an album on the blockchain.
According to Jeff, an artist can individually inscribe five songs and then combine them into one inscription using BRC-420. The artist can then tokenize the album into multiple shares, allowing fans to purchase the album on the blockchain.
Jeff emphasizes the significance of layer-2 networks for Bitcoin, as they provide use cases that cannot be built on layer-1, unlike Ethereum, which can accommodate most innovations on layer-2 networks. He highlights the inability to deploy smart contracts on the Bitcoin network without a layer-2 solution, which is not the case for Ethereum.
Additionally, Jeff notes that most Bitcoin layer-2 platforms do not cater to the specific needs of the Bitcoin community that is already involved in Ordinals and other innovations on the network. Instead, they simply adopt concepts from Ethereum layer-2s, making it challenging to generate excitement within the community.
To listen to the full episode of Hashing It Out, you can visit Spotify, Apple Podcasts, or TuneIn. Don’t forget to explore Cointelegraph’s complete lineup of other shows.
Please note that this article is for informational purposes only and should not be considered legal or investment advice. The opinions expressed here are solely those of the author and do not necessarily reflect the views and opinions of Cointelegraph.