Bitcoin, BRC20, DeFi

In the 16 years since Bitcoin's inception, various blockchain-related concepts have emerged. Among these, the concept of "DeFi" stands out as particularly influential and functional. The concept of "DeFi," pioneered mostly by Ethereum, was widely recognized for its breakthrough in 2020 —the "2020 DeFi Summer"—by rising to its peak value at approximately $180 billion.

The genesis of Bitcoin is based on an anarchist concept and focused on “decentralization.’’ Although Satoshi titled the Bitcoin whitepaper “A Peer-to-Peer Electronic Cash System,” with the parabolic rise in Bitcoin's price and its widespread adoption, Bitcoin has evolved into a “store of value” rather than a P2P payment method.

The evolution of real money —Bitcoin— is inevitable, marked by innovative developments in 2023 that have expanded its utility beyond being a mere digital asset. Among these advancements, the birth of the BRC20 (Bitcoin Request for Comment) ecosystem stood out as a significant milestone.

While Bitcoin remains the dominant asset in the blockchain space, its DeFi TVL has lagged behind Ethereum due to technological limitations. However, the emergence of the BRC20 ecosystem has opened up new possibilities for DeFi on the Bitcoin blockchain. With the technological infrastructure provided by BRC20 tokens, lending and borrowing, flash loans, insurance, yield farming, and other financial transactions will become more feasible on the Bitcoin blockchain.

Implications:

• Despite Bitcoin's enduring technological limitations, it persists in its journey towards realizing Satoshi's vision and fostering a disruptive revolution in the financial landscape.

• With the discovery of the BRC20 concept, the innovative silence on the Bitcoin side has broken. Unlike ERC20 tokens, which were conceptualized in 2015 and formally introduced in 2017, the BRC20 token concept remains relatively new and open to ongoing development and refinement.

• In the DeFi sector, where Ethereum has long been the flagbearer, the relationship between Bitcoin and DeFi will experience innovative developments, and DeFi TVL of the Bitcoin blockchain will grow with the contribution of the BRC20s

• As BRC20 tokens increase in number, their increased usage and recognition will inevitably lead to a demand for projects offering innovative solutions for the BRC20 ecosystem.