Written by: Zero and One Interview

2023 is a significant year for the Bitcoin ecosystem. From $16,500 at the beginning of the year to $40,000, the Bitcoin ecosystem has also reached a new peak. The Bitcoin protocol developed rapidly in the first quarter of 2023, and the market showed a booming development after a year to the fourth quarter. At the end of the year, with both digital assets and traditional markets facing huge challenges, the dormant state of the ecosystem ushered in a revival.

The explosive growth of inscriptions has driven a wave of innovation in Bitcoin. In addition to Bitcoin itself, market funds have also overflowed into its ecosystem. The most striking thing is that the enthusiasm for inscriptions has also spread to other public chains.

Popular protocols in the Bitcoin market

The explosion of Bitcoin ecology started with the launch of ORDI on first-tier platforms. Since October last year, with the promotion of Bitcoin ETF news, the value of Bitcoin has gradually returned, and various Bitcoin protocol ecosystems have blossomed.

1. The explosive Ordinals and BRC20

Before Ordinals became popular, the Bitcoin inscription market had not been well known to the public, but the emergence of the BRC20 standard reversed the situation. When ORDI skyrocketed, Bitcoin NFT was also activated.

BRC20 is a protocol based on Ordinals.BlockchainHomogenization on the runTokenThe inscription is through the Ordinals,Xiaobai NavigationThe technology of writing specific information (such as pictures and text) into the smallest unit of Bitcoin, sats. TokenFor example, ORDI and rats have no practical applications other than trading. After Ordinals became a reality, people were more interested in Bitcoin.BlockchainDevelopers from across the crypto world began experimenting with the network’s potential, culminating in the creation of the BRC-20 standard.

Similar to Ethereum’s ERC-20, the BRC-20 standard is an experimentalTokenThe BRC-20 protocol, through the Ordinal inscription, allows the minting and transfer of fungible tokens on the Bitcoin network. This enables users to store script files on Bitcoin and use it to attribute tokens to individual Satoshis. Unlike ERC-20 tokens, BRC-20 tokens exist directly on the Bitcoin network. They also do not use smart contracts like ERC-20 tokens do.contract, which means that the functions of BRC-20 tokens are more limited than their Ethereum counterparts. Compared with traditional token standards, BRC-20 has better compatibility and interoperability, so it has been recognized and used by more and more people.

2. Atomcial Protocol (ARC-20)

The ARC-20 token standard is provided by the Atomicals protocol and is minted and transferred based on BTC's UTXO. It marks a major innovation in the Bitcoin ecosystem. The protocol is cleverly designed to facilitate the minting, transfer, and update of digital objects. These objects are similar to a new type of non-fungible token (NFT) that can now be directly traded on Bitcoin.BlockchainManage on.

ARC-20 faithfully follows the principle of "Not your keys, not your coins" advocated by Bitcoin OGs, and is closer to BTC fundamentalism in terms of both principle and actual participation. It can be said that the ARC-20 token is BTC itself. Therefore, ARC-20 is significantly different from other protocol tokens.

3. Bitcoin Layer 2

Since Bitcoin itself does not support smartcontract的特性限制了比特币更复杂的生态业务发展，众多比特币的侧链、Layer2 开始涌现。比特币 Layer2 是指构建在比特币基础层之上的协议。这些协议的开发目的是通过处理主区块链（主链）之外的交易来为比特币网络提供可扩展性。它们还可以解决其他技术难题并为比特币提供额外的功能。这些 Layer-2 可以帮助提高比特币的整体性能，同时受益于其Safetyand network effects.

基于比特币的协议，如闪电网络、Rootstock、Stacks、Liquid Network 和比特币汇总项目，为比特币网络带来了可扩展性和可编程性。总的来说，它们展示了网络下一阶段的增长可能会是什么样子。其中闪电网络于 2016 年首次推出，是建立在比特币区块链之上的第 2 层支付协议。它通过使用比特币的本地智能合约功能来实现近乎即时的支付。闪电网络由多个双向支付通道组成，处理与主区块链并行的交易。它旨在解决比特币的扩容问题，例如区块创建时间长、吞吐量有限和交易费用高。

4. Runes Protocol

Runes aims to solve the inefficiencies of many previous protocols, especially BRC-20. Unlike the multi-layered nature of some protocols, Runes is elegantly simple in design. By using OP_RETURN in transactions, it facilitates the assignment of tokens to specific UTXOs, with output index, number of tokens, and token ID. This simplified mechanism is not only easy to understand, but also efficient in operation. The protocol clearly defines the flow and allocation of tokens, reserving a special message for initial token issuance. This ensures clarity and transparency in token operations. Although Runes looks promising, its practicality and longevity remain to be tested.

In addition to the Bitcoin protocol mentioned above, there are also PIPE protocol, ARC-20 AVM, BRC-420, RGB, Stamps (SRC-20), etc., which are all popular protocols in the Bitcoin protocol ecosystem.

Bitcoin Protocol Tokens and Inscription Tools

Some Bitcoin protocol tokens:

• BRC-20: Ordi, sats, rats

• ARC-20: ATOM, Realm

• SRC-20: stamp, kevin, utxo

• Rune:Pipe

• Rune Alpha: COOK, PSBTS

Some inscription tools:

• wallet：Ordinals Wallet, Xverse, OKX Web3 wallet、Unisat Wallet

• Trading Market: OKX Ordinals Market, Unisat Marketplace, Ordinals Market, EVM.ink

• Data analysis market: Dune, whatscription, GeniiData

最常用的工具应该就是钱包了，而且目前一些钱包也集成了交易市场功能。对大部分新人而言，基本一个钱包就可以搞定了。

Future market trend forecast

2023 can be seen as the year when the Bitcoin ecosystem blossoms. The emergence of inscriptions has revitalized the Bitcoin ecosystem and attracted a large number of developers and investors to join the ecosystem. Perhaps it is too early now, and we are still on the eve of an ecological explosion. The protocols that can stand out under the current situation are worth our anticipation and exploration, and the circulation and evolution of digital gold have not yet been completed.

The article comes from the Internet:The evolution of the Bitcoin protocol ecosystem: from the explosive growth of inscriptions to the flourishing development of diversified protocols

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