Table of Contents
ToggleBitcoin and Elastos Layer 2: Significance and Future Outlook
Introduction: Current State and Challenges of Bitcoin

A brief review of Bitcoin’s origin and current status: As the world’s first decentralized digital currency, Bitcoin represents the foundation of decentralized finance.
Existing challenges:
Scalability: Limited transaction throughput.
Privacy: Inadequate privacy protection measures.
Programmability: Lack of advanced features such as smart contracts, making it difficult to support complex financial applications.
Overview of BeL2: Bitcoin + Elastos Layer 2 Network
Introduction to BeL2: By combining the security of Bitcoin with the smart contract capabilities of Elastos, BeL2 offers a decentralized Layer 2 solution.
How BeL2 addresses Bitcoin’s challenges:
Utilizing relays and zero-knowledge proofs (ZKPs) to solve messaging security issues.
Allowing participation in more complex DeFi applications while keeping Bitcoin assets on the main chain.
Core Technologies and Mechanisms of BeL2
Relays and Zero-Knowledge Proofs (ZKP):
Function of Relays: By staking ELA tokens and executing information transfers, relays enhance the security of the network.
Function of Zero-Knowledge Proofs: Ensures the security and privacy of Bitcoin transactions on Layer 2.
Bitcoin-native DeFi:
No need to transfer Bitcoin assets; complex financial transactions like staking and borrowing can be done directly on the main network.
Using BTC Oracle to transmit Bitcoin state information to smart contracts, supporting DeFi applications.
Smart Contracts and EVM Compatibility:
Compatibility with the Ethereum Virtual Machine (EVM) allows existing Ethereum developers to easily develop applications.
Enhances the programmability of Bitcoin, granting it more financial tools such as loans, swaps, and stablecoin issuance.
Future Outlook for Bitcoin-native DeFi
Decentralized Global Settlement: The potential for Bitcoin as a global settlement layer, where all transactions are protected on the Bitcoin main network, ensuring its role as a final trust anchor.
Financial Innovation and Stability:
The combination of Bitcoin and smart contracts can unleash the infinite potential of decentralized finance (DeFi).
Bitcoin as the core infrastructure of the financial system paves the way for the establishment of a new financial system, akin to the concept of a “new Bretton Woods.”
BeL2’s Ecosystem and Future Development
Native Bitcoin Lending Applications: Demonstrations of lending applications based on BeL2 show how liquidity can be obtained through Bitcoin staking while maintaining its security and decentralization.
Global Financial Stability:
BeL2’s role as a global financial stabilizer, connecting the world economy through decentralized means.
Reduces risks associated with traditional financial systems, promoting a more equitable, secure, and trust-free financial ecosystem.
Technological Development and Expansion:
Attractiveness to Developers: EVM compatibility and development tools for BeL2 will draw more innovators into the ecosystem.
Broader Financial Application Scenarios: Such as stablecoins, lending, decentralized exchanges (DEX), to build a multifunctional financial platform.
Impact of BeL2 on Global Finance
Decentralized Spirit of Bitcoin and BeL2: By ensuring that the Bitcoin network is not controlled by a single centralized entity, BeL2 further enhances the decentralized advantages of Bitcoin.
Bitcoin’s Potential as a Global Hard Currency: Amid economic volatility, Bitcoin’s position as a hard currency is further solidified.
Future of Decentralized Finance (DeFi): BeL2 brings more innovation to global finance and promotes the development of a Bitcoin-based DeFi system.
Summary and Future Outlook
Technological Innovations of BeL2: How BeL2 can break through existing limits in blockchain technology, bringing a broader range of applications for Bitcoin.
Potential Impact on Global Finance: How Bitcoin and BeL2 will jointly shape the future financial system.
Significance for Users and Developers: How to participate in this emerging ecosystem and how developers can leverage BeL2 to create more DeFi applications for Bitcoin.
Conclusion
A call to the audience to pay attention to the BeL2 project and explore how to leverage its innovative technological framework for new development opportunities for Bitcoin.
Stay tuned for future updates and more technical sharing, and look forward to the further development of the BeL2 ecosystem.
The general idea of the conversation on the podcast
Elastos and the Future of Decentralized Finance on Bitcoin
In today’s rapidly evolving technological landscape, efficiency and sustainability are becoming paramount, especially in the realm of blockchain technology. Elastos stands out by demonstrating that strong blockchain security can coexist with environmental responsibility, paving the way for long-term viability. A fundamental aspect of this approach is merged mining, which not only enhances efficiency but also minimizes environmental impact.
However, as we delve deeper into these innovative technologies, one concept that often creates a bit of confusion is zero-knowledge proofs (ZKPs). To put it simply, ZKPs allow someone to prove that they possess certain information without revealing the information itself. Imagine having a secret recipe and showing someone that you have it without disclosing its contents. It’s akin to finding Waldo in a picture but not pointing him out—you’re proving the answer without parting with the details.
For Elastos, ZKPs are instrumental in enhancing privacy and capabilities on Bitcoin transactions, particularly through their layer 2 solution known as BEL2. This unique solution adds an additional layer of functionality on top of Bitcoin without altering its foundational code, akin to constructing a superhighway over existing roads to improve traffic flow. With BEL2, users can experience faster transactions, reduced fees, and the implementation of smart contracts, all while inheriting the proven security that Bitcoin provides.
This innovation is at the core of what many refer to as Bitcoin-native DeFi. With BEL2, Elastos envisions a world where complex financial activities like lending and borrowing can occur directly on the Bitcoin blockchain, circumventing traditional banking methods. Imagine borrowing against your Bitcoin without needing to sell it, empowering individuals across the globe, especially those without access to banking services, to participate in the financial system.
While ZKPs are potent privacy tools, they also raise concerns regarding transparency. Recognizing this, Elastos has introduced the BEL2 ZKP Block Explorer, a platform that empowers users to independently verify Bitcoin transactions, even those utilizing ZKPs. This ensures accountability while maintaining privacy, reflecting a commitment to transparency in the evolving financial landscape.
As we explore the potential of this new financial system, it brings to mind the concept of a new Bretton Woods arrangement. Originally established post-World War II, the Bretton Woods system pegged currencies to the US dollar, which was backed by gold, thereby stabilizing global finances. In a similar vein, Elastos proposes a future where Bitcoin serves as a new gold standard, underlining a fresh global financial order supported by BEL2. This could lead to a situation where stablecoins, pegged to Bitcoin, emerge as primary currencies in a decentralized economy.
In practice, this shift could redefine everyday financial interactions. While payments in Bitcoin may not become ubiquitous, the true strength of Bitcoin may lie in its capacity to serve as a stable base for a myriad of financial services. Individuals would attain greater control over their finances, moving away from traditional banking reliance, thus democratizing access to global markets.
However, as with any emerging technology, there are concerns, particularly surrounding security. While Bitcoin has never been hacked and maintains a robust security model, vulnerabilities exist, particularly in its scripting language. The design of BEL2 takes these concerns into account by creating a separate layer on top of Bitcoin that can implement tailored security measures without affecting Bitcoin’s core protocol. This thoughtful architecture allows for experimentation and innovation while protecting the foundational integrity of Bitcoin.
Furthermore, to facilitate the growth of this ecosystem, Elastos has made BEL2 compatible with the Ethereum Virtual Machine (EVM). This compatibility allows developers familiar with Ethereum’s ecosystem to easily transition to BEL2, fostering a vibrant community of developers who can contribute to building applications within the ecosystem.
Despite the promising developments, challenges remain. Regulatory issues loom large as governments grapple with how to address cryptocurrency and DeFi technologies. Nevertheless, Elastos has proactively engaged with regulators, stressing the transparency and security of their platform. The established nature of Bitcoin may provide a more favorable regulatory climate compared to newer projects.
Ultimately, Elastos aims to empower individuals, offering them tools to take control of their financial lives. Emphasizing decentralization, transparency, and individual empowerment, Elastos is paving the way for what could be a revolutionary change in the financial system. With BEL2, we may be witnessing the dawn of a new era in finance, where Bitcoin serves as the cornerstone of a decentralized financial ecosystem that extends beyond mere currency transactions.
As we reflect on these possibilities, it’s clear that the landscape is evolving quickly. The groundwork laid by Elastos today could lead to a future where Bitcoin transitions from being digital gold to becoming the backbone of an entirely new financial system. With all the exciting developments ahead, staying informed and engaged will be crucial for anyone interested in participating in this transformative journey.
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References
Is there a layer 2 for Bitcoin?
Yes, there are Layer 2 solutions for Bitcoin.
What is level 2 Bitcoin?
Level 2 Bitcoin refers to the Lightning Network, a second-layer scaling solution built on top of the Bitcoin blockchain that enables faster and cheaper Bitcoin transactions.
What is elastos crypto used for?
Elastos is a decentralized blockchain-powered internet ecosystem. It is used to build decentralized applications and secure digital assets.
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