BITCOIN BLOSSOMS: It’s not just bitcoin’s price that’s suddenly exploding – thanks to speculation that U.S. regulators might approve new exchange-traded funds or ETFs allowing traditional investors to ape in. There’s also an upsurge in new products and technologies claiming to enhance the oldest and largest blockchain. Just two weeks ago, The Protocol covered the details of Robin Linus’s research paper on “BitVM,” proposing a way of incorporating smart contracts onto Bitcoin. The development offered yet another manifestation of Bitcoin getting Ethereum-style features that many members of the community had previously resisted – recalling the explosion earlier this year of “Bitcoin NFTs” via the Ordinals protocol. Now there’s another: Taproot Assets, a project from the developer Lightning Labs that would enable the issuance of stablecoins and other digital assets on Bitcoin and the layer-2 Lightning Network. “This release marks the dawn of a new era for Bitcoin,” Ryan Gentry, director of development at Lightning Labs, wrote in a blog post last week, while quickly adding that the project “upholds Bitcoin’s core values.” On the question of whether Taproot Assets might cause congestion on Bitcoin similar to what happened after Ordinals debuted, Gentry told CoinDesk it isn’t likely. ”The protocol only requires an issuer to make a single bitcoin transaction to mint an effectively unbounded amount of Taproot Assets, and all of the metadata describing those assets is stored off-chain, with only a cryptographic commitment to the assets stored on-chain,” Gentry wrote in a direct message. “Further, transacting with Taproot Assets over the Lightning Network will happen off-chain and will not touch the blockchain at all.” The crypto analysis firm Messari summed it all up in a report on Wednesday: “Developers have embraced the network’s inherent constraints and learned to innovate on top of the base layer.”
New ETF Speculation and Innovations, Including Taproot Assets, Redefine Its Landscape
