New Opportunities and Challenges After BTC Halving

Bitcoin is about to迎来 a new Halving cycle, while its ecosystem is continuously developing, with new projects such as Layer2 and Staking emerging one after another. Recently, several industry experts conducted in-depth discussions on the development prospects after the BTC Halving.

Experts unanimously believe that the BTC ecosystem contains immense opportunities, whether in the short term, medium term, or long term. They discussed the breakthroughs and opportunities in the BTC entrepreneurial space from their respective professional perspectives and hold an optimistic view on future developments.

The following are the main points of discussion:

1. The upcoming Bitcoin Halving is influenced by multiple factors, and there is uncertainty in the future market trends. The Halving primarily affects the supply side, leading to a significant reduction in miner income, especially for miners using older mining machines. Miners will be forced to accelerate the updating of equipment, optimize cost structures, or relocate to areas with lower electricity costs. However, due to the strong risk resistance capabilities of large mining operators and traditional capital, the expected decline in overall network hash rate is limited.

2. The mining rewards of Bitcoin will gradually decrease, eventually approaching zero. The true returns of Bitcoin in the future will come from being an investment asset, investing in L2, DeFi, CeFi, and other ecological projects, from which holders can gain profits. This will become an important development direction for the Bitcoin ecosystem.

3. Miners' future earnings mainly come from two parts: newly issued Bitcoin and transaction fees, the latter of which depends on the activity level of the Bitcoin ecosystem. More innovative staking projects can stimulate ecosystem development, bringing more on-chain activities and transactions, enhancing network security, and increasing miners' transaction fee income.

4. The PoS mechanism lacks external economic incentives, and its security is limited by the scale of the on-chain economy, posing a risk of being controlled. The introduction of large external Bitcoin assets for the PoS network provides security guarantees, addressing its inherent flaws. This is the rationale behind Bitcoin (re) staking.

5. Experts predict that Bitcoin staking will be a multi-billion dollar market, comparable to the early days of PoW mining, which can meet the future demand for high-performance application chains that require secure infrastructure.

6. Four key areas that the future of the Bitcoin ecosystem needs to focus on: architectural innovation, L2 development path selection, efficient asset circulation, and security assurance.

7. For ecological builders and entrepreneurs, the short-term focus can be on addressing the congestion issues in the BTC network, accommodating the overflow demand, the mid-term can pay attention to the holders' profit demands, and the long-term can aim at the ecological development prospects after the potential scripting language upgrade. It is worth noting whether there will be more application scenarios closely related to Bitcoin emerging in the future? Will there be better tools to assist in Bitcoin usage? And will there be novel programming models to break through its non-Turing completeness?

8. As an innovative solution for the Bitcoin ecosystem, Babylon targets objective violations, while EigenLayer is dedicated to addressing subjective attacks.

Experts believe that the Bitcoin ecosystem is facing new development opportunities, but at the same time, there are many challenges. Innovators and investors need to closely monitor the trends in this field and seize potential market opportunities.