Two reminders that Bitcoin will win
two-reminders-that-bitcoin-will-win
Alejandro
Building tools for a Nostr agentic ecosystem.
Co-founder & CEO at
4 min read
"Nobody is using Lightning” should now be a dead meme.
Launching a new Bitcoin report from
How the Lightning Network grew by 1212% in 2 years ⚡.
— Sam Wouters, October 10, 2023
Welcome to the latest issue of the Bitcoin For Families newsletter. This issue goes over two new developments announced this week that reminded me that Bitcoin will win.
Bitcoin's key strength is its security. And its security stems from its simplicity. Bitcoin operates on a limited set of simple rules that are very difficult to change and this has implications over the short, medium and long term.
In the short term...
Bitcoin is at a disadvantage. The Bitcoin network, with its simplicity, offers a limited set of simple primitives for developers compared with other networks like Ethereum or Solana which offer more complex primitives.
So what's the catch?
Ethereum and Solana offer a wider and more complex set of primitives, compared with Bitcoin. And they do so at the expense of security.
Blockchains that use proof-of-stake as their consensus mechanism are not secure. Only proof-of-work is secure. That's why Bitcoin remains alone and secure.
But It's faster and easier to build on top of Ethereum or Solana. We have seen it. Thousands of crypto developers flocked to these networks while saying that Bitcoin is only good for money.
And they built lots of applications: smart contracts, lending platforms. All built on top of a house of cards. Because Ethereum and Solana are not secure. You might be able to build faster but what you build won't last.
And by the way, if the Bitcoin network were to be only for money and managed to deliver to the world the best, soundest money possible, that would be a life changing event for humanity.
But rest assured, the Bitcoin network can do more than that.
In the medium term...
It is harder to build on top of the Bitcoin network. But some people are doing it anyway. People who are focused on the long term and will not sacrifice security for the sake of speed.
That is how we got the Lightning network. Detractors of Bitcoin used to say that Bitcoin can't handle all the transactions of the world and that was their justification for building on top of Ethereum or Solana. But guess what...that's not true anymore as highlighted by the first of the two developments that got my attention this week.
The Lightning network grew by 1212% in 2 years
It took time, determination and ingenuity. But it happened. Some people figured out how to build a payment network secured by Bitcoin and capable of handling the volumes required to replace Visa or Mastercard using the limited set of simple primitives available to Bitcoin developers.
But wait, there is more....
Because on October 10th, a new white paper was released describing BitVM, a new proposal that, using the existing capabilities of the Bitcoin network, and without the need for soft or hard forks, promises that any computable function can be verified on Bitcoin, paving the way for smart contracts on the Bitcoin network.
It took years to figure it out. It wasn't easy. Again, playing with only a limited set of simple primitives is hard. But the door is now open to smart contracts on the Bitcoin network.
In the long term...
In the long term Ethereum, Solana and all the other unsecured, proof-of-stake networks will become irrelevant.
They sure had a head start, but ultimately, they will become irrelevant because once Bitcoin developers build enough abstraction on top of the Bitcoin network, then the difference in the complexity and size of the simple primitives becomes irrelevant.
With enough time, the Bitcoin network will offer the same abstracted capabilities as Ethereum or Solana with the advantage of running on the most secure network with the soundest money available to humans. No one can beat that.
The Bitcoin network will prevail over other networks like Ethereum and Solana. Bitcoin will win.
Notable notes
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Sam Wouters
Sam is a Bitcoin research analyst at River. He is the author of the Lighting research I highlighted and he is active on Nostr, answering questions about the report.
You can follow him at
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See you again next week! — Alejandro
This newsletter is for educational purposes. It does not represent financial advice. Do your own research before buying Bitcoin.
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