21 February 2024
Bitcoin script, it seems, has been sorely underestimated.
Following the release of the Ordinals protocol and BitVM white paper in 2023, conceptions are shifting about what is possible on the Bitcoin base layer, and it’s clear Bitcoin is now absorbing demand from other blockchains in the wider cryptocurrency ecosystem.
Of course, developers have harbored aspirations to add additional features to Bitcoin since the earliest days of the protocol’s 15-year history. From early sidechains like Liquid and Rootstock to the L2s of tomorrow, Bitcoin Magazine has always covered legitimate scaling initiatives.
However, there are a new wave of imitators seeking to take advantage of these developments in order to market arbitrary crypto tokens. Amidst this Bitcoin L2 gold rush, Bitcoin Magazine’s Editorial Board believes it is necessary to clarify its position on L2 coverage.
To be eligible for coverage, a Bitcoin L2 must:
Use bitcoin as its native asset: The L2 must be foundationally designed to use bitcoin as its primary token or unit of account, and the mechanism for paying fees for the system. If it has a token, it must be backed by bitcoin. Use Bitcoin as a settlement mechanism to enforce transactions: Users of the L2 must be capable of exiting the system through a mechanism that returns unilateral control of their funds on Layer 1.
Demonstrate a functional dependence on Bitcoin: If Bitcoin were to experience a total failure, and the system in question were to remain operational, then it is our position that that system is not a Layer 2 of Bitcoin.
Protocols built on Bitcoin that do not fit into the category of Layer 2, but that still may be eligible for coverage include:
Meta Protocols: Systems like Counterparty (XCP) or Ordinals, protocols outside of the bounds of the Bitcoin protocol, and exist and function on Bitcoin Layer 1, but do not have their own separate blockchains. Bitcoin Magazine has historically covered news and events related to such protocols, and will continue to do so. ‘Parasite’ Layers: These systems depend on Bitcoin to exist, and cannot function independently without Bitcoin, but do not fulfill the other criteria required to be considered a Layer 2. Bitcoin Magazine does not cover these protocols at this time.
This policy clarification does not apply to our stablecoin or tokens coverage decisions.
Further, it pertains only to BitcoinMagazine.com and its Print publication, and does not represent policies enforced by The Bitcoin Conference, Rare BTC or UTXO Management, the institutional fund owned and operated by BTC Inc, and which may have exposure to Bitcoin-based L2s.