After the bull market returns, who can stand out in the Bitcoin ecosystem?

The market is eagerly waiting for Bitcoin to break through the $70,000 mark. In the eyes of many players, if Bitcoin can break through $70,000 and stabilize near this price mark this time, the long-awaited bull market will officially begin.

Amid such optimism, important assets in the Bitcoin ecosystem have all seen an increase. BRC-20's $ORDI has risen by as much as 25% in the past week, and $SATS has risen by as much as 15%.

Even more lively is the rune market. The rune GIZMO•IMAGINARY•KITTEN, led by the new cat “Gizmo” released by Bitcoin Puppets artist @lepuppeteerfou on Twitter, has risen all the way to a peak market value of nearly 20 million US dollars since all the runes were minted. Although @lepuppeteerfou himself denied that the runes were related to him, the market enthusiasm remains unabated.

The popularity of GIZMO•IMAGINARY•KITTEN has led to the emergence of two other “golden dogs”, namely KODA•FLUFFINGTON, which is based on the dog “Koda” of the founder of NodeMonkes, and POOKA•CANNOT•BE•STOPPED, which is based on the dog “POOKA” of zkshark, the founder of OMB. Both have quickly broken through the $1 million market value, which is not easy to break through in the rune market. KODA•FLUFFINGTON’s highest point was nearly $4 million in market value, and POOKA•CANNOT•BE•STOPPED’s highest point was nearly $3 million in market value.

Several leading assets in the rune market have also seen a sharp rise. PUPS•WORLD•PEACE and BILLION•DOLLAR•CAT have risen by up to nearly 9 times since the end of September, and DOG•GO•TO•THE•MOON has risen by up to 1 time. Just yesterday, @ord_io tweeted that an insider at Coinbase revealed that Coinbase is conducting an internal security audit and regulatory compliance assessment on Rune, but they have not yet independently confirmed these rumors. This can't help but make people imagine the recent rise of Rune.

If the bull market is about to start, what prospects can we see for the Bitcoin ecosystem at present?

On the eve of great changes, continue to be conservative or move towards openness?

Whether OP_CAT on the Bitcoin mainnet can be revived is of great significance, because for the vision of "realizing smart contracts on the Bitcoin mainnet", the question now is not "can", but "whether".

Last year, the popularity of the Ordinals protocol undoubtedly contributed an important force to the openness of the Bitcoin ecosystem, but it only opened a gap in the door. The consensus of the Ordinals protocol is only a small subset of the Bitcoin consensus. Because of this, the FT protocols on Bitcoin, such as BRC-20 and Runes, are like NFTs that can be "infinitely fragmented" in terms of user experience. Compared with the FT protocols of other chains, they can only be regarded as "defective products".

The purchase interface of Runes on Magic Eden is very similar to NFTs without pictures

Why is the lack of functionality or user experience of the protocol a problem of Bitcoin consensus? Because the consensus of Bitcoin has not been further opened up, resulting in so many restrictions on the Bitcoin mainnet. Ordianls, BRC-20, and Runes can only find ways to achieve the purpose of "issuing coins/pictures on the Bitcoin mainnet" under these restrictions. Even so, there are still opposition forces such as Bitcoin Core developer Luke Dashjr who believe that the above protocols are a destruction of the Bitcoin mainnet and have been resisting these innovations.

If the BIP-347 proposal "OP_CAT in Tapscript" is passed and the Bitcoin mainnet finally completes the soft fork, it means that the consensus of Bitcoin will change dramatically, from conservative to open, and the narrative ceiling of Bitcoin will be opened again. I say "opened again" because I think Rune has taken the narrative of "issuing coins on the Bitcoin mainnet" to the extreme, and it is difficult for latecomers to shake its position, unless it is a dimensionality reduction attack like smart contracts.

However, whether OP_CAT can be revived in this round of bull market is a matter of great uncertainty. Being assigned a BIP proposal does not mean that the community has reached a consensus on a certain issue, but means that "the community can start a debate on this issue." We may not even have reached the stage of considering "whether there is enough support", and we are still at the stage of "this issue needs more discussion." Quantum Cats, one of the Bitcoin blue-chip NFT projects, is essentially a "campaign" for the OP_CAT issue. Udi Wertheimer, like a "politician" active in Bitcoin, leads a blue-chip NFT community to cheer for the resurrection of OP_CAT. Udi has tried to debate head-on with Luke Dashjr on Twitter Space many times, but Luke usually has an "I don't care" attitude, and the cold treatment suppresses the supporters.

If OP_CAT can be successfully revived in this round of bull market, then the technical narrative in the Bitcoin ecosystem will be almost 100% led by OP_CAT. Currently, the targets that are trying to do more on the revival of OP_CAT are Quantum Cats and the CAT20 protocol on Fractal.

If not, then Rune should continue to maintain its position as the most influential FT protocol in the Bitcoin ecosystem.

The Rune market needs to withstand more tests

A Rune only becomes a FT in the true sense after being listed on CEX. Before listing, the nature of Rune is not much different from NFT, which is reflected in the market value, that is, it has a great "recoil" - when liquidity is good, the market value will soar rapidly, otherwise, it will roll up the floor crazily, a bunch of small orders will be stuck near the floor price, and then a lower price sell order will appear, resulting in a dead cycle of no one asking.

The true market value of Rune needs to be tested by the liquidity of CEX, which may be one of the reasons why CEX is very slow to list Rune currencies.

In addition to CEX, there are also Rune Swap products like Dotswap on the Bitcoin mainnet chain, and Magic Eden will also launch the Rune Swap function soon. An interesting phenomenon is that Dotswap's Rune Swap product is very good, but it has not won enough traffic. Instead, CAT20 on Fractal has brought good attention to Dotswap. I wonder if Magic Eden can improve the on-chain liquidity of Rune with its own traffic and excellent user experience.

In terms of the richness of currencies, Rune already has "Cult coins" such as PUPS•WORLD•PEACE, but the hot topics are still relatively thin. At present, they are still centered around a few large NFT projects in the circle or are simply generated based on the size of the holder group. More players are needed to enter to create a better environment for the formation of content and even Cult coins. This can also be reflected in the fact that PUPS•WORLD•PEACE and BILLION•DOLLAR•CAT have both bridged to Solana to achieve greater breakthroughs.

As for the prospects of BRC-20, it is a little bleak at present. The three coins $ORDI, $SATS and $PIZZA are almost all of BRC-20 at present.

The NFT blue-chip echelon has been relatively stable, and there is still room for exploration of the uniqueness of narratives

NodeMonkes, Bitcoin Puppets, OMB (Ordinal Maxi Biz), Quantum Cats, Pizza Ninjas, these five projects have already secured their blue chip status. In addition, Bitcoin Shrooms is a relatively special existence, with a very high inscription number and a very low total volume, but the floor price is stable above 1 BTC.

In terms of pure art NFTs, since generative art has become like "yesterday's yellow flowers" on Ethereum, art on Bitcoin needs to seek breakthroughs in subject matter, such as conceptual art that combines Bitcoin's own cultural attributes, or AI art. From this perspective, CENTS may be the most unique art series on Bitcoin at present, and the uniqueness is that "it is really impossible to achieve the flavor of Bitcoin on other chains."

The artist behind CENTS is Rutherford Chang. The series selected penny coins minted in copper in 1982 and earlier from hundreds of thousands of penny coins (in 1982, the material of penny coins changed from copper to zinc due to cost reasons). In addition to being engraved on Bitcoin, the physical penny coins were melted into a complete copper block.

Bitcoin has created a kind of "value entanglement" for CENTS:

- You can't tell whether it is 1 cent engraved on Bitcoin or 1 satoshi engraved on pennies.

- Artificially created the deflation of pennies and the "deflation" of Bitcoin. All 1-cent coins in the CENTS series are old pennies made of 95% copper + 5% zinc in 1982 and earlier, which are actually deflationary and no longer issued. At the same time, the number of bitcoins available for burning has also decreased by 1 satoshi.

- The legal value of a 1 cent coin is 1 cent, and the production cost required to mint a 1 cent coin is higher than 1 cent, so the value of 1 satoshi is less than 1 cent. These 10,000 1 cent coins have clearly been transferred to a lower-priced value medium, but they reflect a higher value. Now, the price of 1 CENTS is about $330, and the auction price of a physical copper bar in June is $50,400. The legal value of 10,000 1 cent coins is $100.

- As time passes, the legal value of a 1 cent coin may no longer exist one day, and the production cost required to mint a 1 cent coin may continue to change, and the value of 1 satoshi may be much higher than 1 cent.

Such a narrative cannot be replicated on other chains, because coins on other chains do not make people feel like a coin or a currency like Bitcoin.

The DMT concept is also a unique artistic narrative of Bitcoin that deserves attention. In short, there are many kinds of data in the Bitcoin blockchain, such as block hash value, block size, block height, block target difficulty, etc. Creating specific digital assets based on these data is the purpose that DMT hopes to achieve. At present, except for the leading project Natcats, there are no other projects with the DMT concept that can attract enough market attention.

Conclusion

Whether OP_CAT can be resurrected in this round of bull market will determine the direction of the Bitcoin ecosystem. Some directions that have not yet become market hotspots, such as Lightning Network (Taro, RGB, CKB), BitVM, etc., which have not been mentioned in this article, may receive more attention if OP_CAT fails to be resurrected.

The Bitcoin ecosystem is the only place in the current Crypto market where the "technical narrative" can still run through. The reason is simple - Bitcoin is like an old computer that is still equipped with a Pentium 4 processor. There is enough hardware to update it. It just depends on whether the computer room administrators can reach a consensus. But it is so difficult to reach a consensus. In addition to the collision of ideas, there must be real conflicts of interest.

But in any case, the Bitcoin ecosystem will definitely be one of the important narratives of this round of bull market, and it will be a very special existence compared to other ecosystems.