Digging Deeper Into Bitcoin: Not Just A New Kind Of Money

Bitcoin is usually considered a fresh kind on money, but there’s much more into it. It is a multi-layered monetary ecosystem with its own financial system.
Over previous couple of decades, folks have tried reviving finance via fintech, and many apps have emerged indeed, but all are pegged to a conventional monetary system.
Bitcoin was trading at $43,081.87 while this article was being written, uptrending by 2.29% in last 4 hours.

Bitcoin’s financial asset is structured as neutrally as possible. It is genuinely sound money as it offers greatest degree of security, stability, and reliability as a financial system.

A Foundation Layer For Money

Because of this latest kind of international, virtual money persists on a foundation layer, it is more appropriate to speak of BTC as being base money. It is being settled in a dispersed fashion in blockchain of Bitcoin, which serves as a final settlement system inside BTC’s indigenous, international financial system.

So, Bitcoin is base money, aka on-chain BTC, which is settled on its blockchain with finality — is actually just the initial or base layer for an ever-evolving multi-layered financial system.

Monetary Logic on Top of BTC

While majority of folks are known with Bitcoin’s financial layer, what goes unnoticed by several is BTC’s constant development into an economic ecosystem. Reason behind this is the latest system indirectly built into BTC’s protocol code itself.

This quality contrasts starkly from well-liked smart contract platforms such as BSC, Terra, Avalanche, Solana, or Ethereum. While these entirely programmable blockchains — technically known as Turing-complete systems – enabled for indigenous smart contract compatibility, Bitcoin’s programming languages script remains intentionally restricted.

By not going to complete programmability on its base layer, BTC was optimized for reliability, stability, and security.

Innovative Open Market For Bitcoin

Bitcoin’s framework layer is spawning an open-market rivalry for developing a monetary system on top of Bitcoin. This rivalry is beneficial for users as more qualitatively distinct options means more liberty in choice. So, the bigger and more broader the DeFi environment on BTC, the better it becomes.

Regarding safety and consensus, folks should remember every project should accept some trade-offs. As different protocols do stuff differently, and these tradeoff will be distinguished by projects.

Monetary Operating Networks Based on Bitcoin

Distinct DeFi approaches on Bitcoin framework allow smart contract operability for BTC in several ways.

To make this operability helpful for as much users as possible, monetary operating system functioning on Bitcoin and representing 3rd layer, in BTC’s multi-layered monetary order will surface slowly but surely.

Bitcoin’s Indigenous Application Layer

While a monetary operating system like Sovryn can offer several dApps in a single place, these apps can also persist as standalone applications.

Beauty of BTC’s public and permissionless setup is that everyone can offer helpful software to engage with BTC’s surfacing monetary order.

A plethora of dApps will create a 4th layer within BTC’s multi-layered monetary order. Uncollateralized lending, collateralized lending, leveraged trading, and Token swaps, and more are surfacing as an attribute on top of Bitcoin.