Will Bitcoin Welcome a Major Upgrade? Understand Bitcoin's Soft Fork Thunderbolt in One Article

Original Title: "The Current Status of Bitcoin Scaling Solutions and the Major Upgrade of Bitcoin"

Author: 527 (X: @Eth527)

This is a hardcore article, but I have observed a huge narrative quietly brewing. Many people do not know that BTC has completed a significant soft fork called Bitcoin Thunderbolt, which means Bitcoin introduces native programmability. Those who understand naturally know what this means, and those who do not will understand after reading this article. Big things are coming!

1. The Dilemma of Lack of Native Scaling Solutions

Bitcoin is renowned worldwide for its unparalleled security, but its limitations in scalability have prevented the full realization of the asset value on the Bitcoin chain. The launch of the Ordinals protocol has sparked expectations for Bitcoin's scaling potential and brought new development opportunities to the Bitcoin ecosystem. Against this backdrop, several scaling solutions have emerged, attempting to unleash the potential of on-chain assets and promote the prosperity of the on-chain ecosystem.

However, existing scaling solutions often sacrifice Bitcoin's native characteristics, introducing additional trust costs and security risks. Although these solutions have attracted a small number of users through incentive mechanisms, generating some market enthusiasm in the short term, interest has waned as these incentives have diminished. For example, Babylon, which recently suffered a setback, saw over $2.1 million worth of BTC withdrawn from the protocol just 24 hours after its airdrop went live. The reason lies in Babylon's technical solution, which requires locking BTC to obtain sidechain assets, making the main chain Bitcoin assets unusable directly. This path weakens the appeal to native Bitcoin users, and participants quickly leave once they receive their airdrop.

Another highly publicized project, Bitlayer, is similar; it was touted as "the fastest-growing Bitcoin Layer 2," but after its frenzied incentive mechanism ended, prosperity faded because participants were more concerned with short-term gains than staying in the ecosystem for the long term. Bitlayer users must convert BTC into on-chain tokens through a custodial bridge, which means a strong reliance on third-party custody and potential risks. Once there are no profits to be made, users will quickly transfer their BTC away.

In summary, it has been proven that scaling solutions that deviate from native characteristics have very limited appeal to Bitcoin users and are not true solutions.

2. Native Enhancement: The True Direction of Bitcoin Scaling

People are increasingly realizing that only by working directly at the Bitcoin protocol level can we truly break through the bottleneck. Ideas represented by @nubitorg are gaining attention. Nubit promotes Bitcoin Thunderbolt— a soft fork of the Bitcoin base layer that directly modifies the Bitcoin protocol, providing higher transaction speeds and programmability. For example, through UTXO Bundling technology, transaction speeds are 10 times faster than traditional Bitcoin; by introducing the OPCAT opcode, it supports the direct development of applications on Bitcoin, achieving native programmability; and Goldinals integrates standards like BRC-20, Runes, and Ordinals, unifying asset protocols; BitMM enables trustless on-chain transactions.

This scaling is "on-chain," meaning native BTC can directly participate in smart contracts and transactions without the need for cross-chain wrapped substitutes. Nubit’s native scaling solution does not require traditional cross-chain bridges, as its verification is completed entirely on-chain, eliminating third-party custody risks.

3. Comparison of Path Advantages and Disadvantages

To help readers better understand the differences between native scaling solutions and external scaling solutions, we have created a table for everyone to review:

From this, it can be seen that the advantages brought by "native" are comprehensive: in terms of security, it eliminates intermediaries, trust costs are almost zero, asset utilization does not waste Bitcoin's liquidity, and ecosystem development resonates with Bitcoin's growth. Of course, the challenge of native solutions lies in their higher implementation difficulty, often requiring consensus from the Bitcoin community (such as soft fork upgrades) to be realized. This may slow down the advancement of the native path, necessitating strong technical validation and community mobilization capabilities.

4. The Importance of "Native" for Bitcoin Value Capture

In addition to the feasibility of scaling solutions, native characteristics are also crucial for promoting the value of the Bitcoin ecosystem.

1. Security Spillover Effect:

Non-native scaling solutions allow a large number of transactions and fees to occur on other chains, with only a small number of locking/unlocking transactions visible on the Bitcoin mainnet. Bitcoin itself does not benefit from these Layer 2 transactions, and in the long run, this cannot directly enhance the security and value support of the mainnet. Native scaling solutions allow transaction activities to occur on the Bitcoin mainnet, with each transaction generating fee income for Bitcoin miners, thereby strengthening the security budget and stability of Bitcoin's hash rate. This effect is particularly critical for Bitcoin's future, especially after halving, when it relies solely on transaction fees to maintain security.

2. Value Attribution:

Both Babylon and Bitlayer have their own native tokens, which serve as payment for fees or governance functions. A portion of the ecosystem value is captured by these new tokens, diluting BTC's status as the sole value carrier. For example, Babylon users are more focused on the price and returns of the BABY token rather than the price of BTC itself; on Bitlayer, DeFi operations may ignite interest in its contract tokens and governance tokens, while BTC merely exists as collateral. In the long run, if the innovation dividends of Bitcoin are taken away by other tokens, it would not be ideal for pure BTC investors. Native scaling solutions ensure that all applications directly use BTC as the pricing and settlement asset. Whether issuing tokens, NFTs, or running decentralized applications, the underlying consumption is all BTC. The demand for BTC rises with the prosperity of applications, benefiting BTC holders from this ecosystem growth.

In summary, "native" means the value of Bitcoin itself can participate and amplify, while non-native means value may spill over. For investors who believe in Bitcoin's long-term value, native solutions undoubtedly align better with their interests.

5. One Last Sentence

By comparing existing scaling solutions, the unique advantages of the native path stand out, not only addressing the bottleneck of Bitcoin scaling but also maintaining Bitcoin's security and trustless characteristics. This tremendous innovation is nurturing a narrative with explosive potential, worthy of further analysis and follow-up by all investors. As the implementer of Bitcoin Thunderbolt, Nubit represents a native scaling solution that brings a significant upgrade to Bitcoin, becoming the first Bitcoin project acknowledged by HSBC in its latest report.