Bitcoin's Mainstream Boom Demands Improved Scalability, Says Paul Sztorc
Summary:
Paul Sztorc, of Bitcoin Drivechain, suggests that an increase in mainstream acceptance of BTC will demand improved scalability and functionality. He discusses the pros and cons of Bitcoin exchange-traded funds (ETFs) in the US and the consequences of large investments entering the crypto ecosystem. With LayerTwo Labs working on Drivechains, Sztorc supports this addition to Bitcoin's network to handle increased transaction volumes and additional functionality. He also warns investors about focussing too much on Bitcoin's value rather than its performance metrics.
Paul Sztorc, a proponent of Bitcoin Drivechain, suggests that the current surge in mainstream acceptance of BTC will necessitate significant improvements in its scalability and functionality. In an extensive interview with Cointelegraph, Sztorc discussed the potential benefits and downsides of Bitcoin exchange-traded funds (ETF) gaining acceptance in the United States. He also spoke about the lasting effects of large-scale investments pouring into the crypto ecosystem.
Sztorc indicated that the rising recognition of Bitcoin and its acceptance via ETFs highlights its credibility and growing presence. He further stated that it's another avenue for specific types of investments that are generally channelled through ETFs.Customer demographics for BTC-backed ETFs differ from those of usual retail investors and hardcore Bitcoin supporters, as per Sztorc's observation. He also pointed out that ETFs inherently have a custodial nature, and those who prefer ETFs are unlikely to opt for self-custody of Bitcoin.
While Sztorc recognizes that the excitement around Bitcoin ETFs could attract new investors, he warns against taking too much focus from Bitcoin's metrics and performance in favour of its value.
LayerTwo Labs has been working on developing Drivechains for more than four years, an endeavor that aligns with Bitcoin Improvement Proposals (BIPs) 300 and 301. These outline the creation, deletion, and transfer of BTC to and from layer-2 blockchains, or "sidechains." Sztorc, who authored BIP-300, has been advocating for the features provided by Drivechains.
If more funding pours into the Bitcoin ecosystem owing to the approval of Bitcoin ETFs, this could result in an increase in transaction volumes, Sztorc warns. He argues that alternative functionality is needed to combat threats from altcoin competition, hard fork movements, and extension block campaigns, despite the Lightning Network's contributions in facilitating low-fee, high-throughput transactions.
Sztorc perceives the role of BIP-300 as encouraging competition. He suggests that diverse software developers will vie for supremacy while protecting Bitcoin enthusiasts who don't choose to participate in what occurs in a sidechain. BIPs have historically been instrumental in establishing the groundwork for soft forks enhancing Bitcoin's protocol and innovations like the Lightning Network.
Published At
1/31/2024 12:43:01 PM
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