Written by: Haotian

Last night, Lightning Labs Lightning Network released the Taproot Assets mainnet alpha version, which means that stablecoins and other assets can be built on the Bitcoin network from now on. And such assets are completely based on the programmable characteristics of Bitcoin Script to control issuance, are completely decentralized, and will eventually be implemented through the Lightning Network. At first glance, Bitcoin seems to have ushered in a real BRC20 era?

So, what is the technical implementation logic of Taproot Assets? What is the difference between it and BRC20 on Ordinals? Will it bring another wave of new BRC20? TokenIs it a release frenzy? Next, let’s try to interpret it objectively with doubts.

Technical implementation logic

In the previous article about BitVM, I introduced Bitcoin’s limited but achievable programming capabilities, which is to write “simple code” in the Script script of the Taproot address and execute it as a UTXO spending conditional instruction.

In the asset issuance scenario of Taproot Assets, this simple opcode can be specified as the total amount of token issuance, issuance time, issuance object and other rules, and a group of multi-signature addresses can be connected to jointly trigger the opcode. Assume that the user of address A generates multi-signature address B and plans to use address B to issue 10,000 USDT to address C. Then address A can be considered as the project owner of USDT assets on Bitcoin, and address C is the first holder to receive USDT.

The successful issuance of tokens requires the signature of address A. If address C wants to spread assets to other addresses using transfer logic, it also needs to be triggered by the signature of address A. You must ask, if address C wants to spread tokens to thousands of addresses, it can't wait in line for address A to sign, right? Good question, the key lies here. Address C, as the address for receiving assets, is usually issued on the Lightning Network, that is, it can interact efficiently, at low cost, and multiple times with high frequency between the two addresses in its two-way established channel.

Originally, the Lightning Network only supports peer-to-peer scenarios, but the new Taproot Asset realizes peer-to-peer multi-functions, supports forwarding a payment to multiple receiving addresses in a transaction channel, and scripts can transfer assets to multiple addresses according to conditions. This allows the Token issued to the C address to be distributed to a large number of addresses using the Lightning Network, ultimately achieving decentralized ownership of assets. In this way, the technical implementation logic of issuing Tokens using the Bitcoin network in a closed loop has been run through.

Moreover, the C address can be recorded by the relay node of the Lightning Network according to the rules. Similar addresses can manage and distribute their own assets through different relay nodes (for example, the owner can transfer his USDT to TokenSubmit to 10 relay node distributors, each of which is equivalent to a CEX hotwalletaddress, and they will do secondary distribution and accounting management).

In this way, within this logic, the Owner, issuing conditional address, receiving conditional address, multi-signature trigger control, efficient and trusted distribution network, and other necessary components work together to create an accounting system that can realize decentralized asset issuance, management, and distribution throughout the entire process.

"True or false" BRC20?

The Brc20 logic that appears on Ordinals is to define the asset circulation rules by implanting a json data packet in the Scrip script and writing parameters such as Mint and Transfer in the data packet. The final right of interpretation is determined by the third-party Ordinals protocol.Xiaobai NavigationThe Bitcoin network knowledge passively made a data memorandum, did not participate in the verification calculation, and could not decide the asset ownership disputes. There were even bugs in the processing of transfer logic. Users became the main force of asset mint and transfer. There was no project party, no empowerment, and lack of liquidity.

相比之下，Taproot Assets 上发现多资产就显得更进阶，高阶一点了。有项目方 Owner，资产发行销毁可由 Script 脚本中的操作码 True 或 False 决定，资产的后续流通则由有可信技术落地的闪电网络支撑，且本身闪电网络就是一个高频流通应用场景。不能说绝对，但相比之下，Taproot Assets 所支持的多资产网络，更像极客们心目中很 Make Sense 的「新」代币标准。（注：只分辨技术逻辑差异，炒作逻辑，稀缺make moneyMarket factors such as the effect are not within the scope of this topic)

New BRC20 coin issuance frenzy?

Perhaps, at this moment, many people have begun to imagine that since the real BRC20 token is here, theoretically, can't the prosperity of Ordinals be replicated? Theoretically, it can, but I personally think that Taproot Assets has a strong system engineering, but it is not so easy to settle a complete project, because its multi-signature system, issuance and transfer logic, especially the point-to-multi-ledger bookkeeping management and operation on the lightning network, have considerable costs and thresholds. Unlike ordinarys, you only need to issue a transaction to issue a coin, so it is difficult to replicate the BRC20 craze. On the contrary, the lightning network is naturally a scenario suitable for high-frequency consumption, so the best issuance tokens for Taproot Assets are stablecoins such as USDT and USDC.

Obviously, the official Lightning Network also emphasizes the concept of stable currency. As for other project parties, they must abandon the more advanced Ethereum EVM smartcontractNo, it is not necessary to spend energy to deploy other tokens on Bitcoin. As long as the project party is willing to do it and the market is willing to accept it, everything is possible. Following the inherent conditions of the Lightning Network payment scenario, I can only think of a vision that payment tokens are suitable for this. As for those POS Staking tokens, don't play like this, it's weird. (If there is, DEX, Lending, derivatives and other types of gameplay can also be realized, it depends on whether anyone is willing to implement it at a high cost.

above.

To be honest, I prefer to describe Taproot Assets as the era of Bitcoin multi-asset. I compare it to BRC20 just to facilitate understanding and highlight its innovation. And it is unknown whether Taproot Assets will be used to start a new wave of narrative in the next market, although it has such qualities and conditions. However, whether the Taproot Assets market is hyped or not, there are two visions worth looking forward to that are already clear:

1) Stablecoins such as USDT will retest the Bitcoin network and become mainstream currencies in the Lightning Network application scenario. It is worth looking forward to whether they can eventually regain the stablecoin status of TRON;

2) Lightning Network SupportwalletData such as application popularity and offline consumption payment channels will usher in a new wave of growth, which will be a turning point for the Lightning Network. Whether it will have an incentive and stimulation effect on potential social platforms associated with Nostr remains to be seen.

Note: Current global distribution of Lightning Network Channels

The article comes from the Internet:Will the Lightning Network’s launch of the Taproot Assets mainnet bring about a new wave of BRC20 token issuance?

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