New Economic Landscape After BTC Halving

Bitcoin is about to reach a new high again, and its ecosystem is also developing comprehensively. Projects like Layer2, (Re)Staking are continuously emerging, sparking thoughts on the future development of the BTC ecosystem. Why does Bitcoin need (re)staking? What is its rationale? What new opportunities are there for entrepreneurs and investors after Halving? What is the market size of BTC staking? Is this a long-term opportunity or a short-term hotspot?

Recently, several industry experts conducted in-depth discussions on this topic, sharing their views and insights.

The following are the main points of discussion:

• The upcoming Bitcoin Halving is influenced by multiple factors, and there is uncertainty in the future market. The Halving primarily affects the supply side, leading to a significant decline in miners' income, especially for those using old mining machines. Miners will be forced to accelerate the upgrade of their equipment, optimize costs, or relocate to areas with lower electricity costs. However, due to the risk resistance capacity of large mining companies and capital, the overall network hash rate is expected to decrease only slightly.

• Bitcoin mining rewards will gradually decrease. The real returns from Bitcoin in the future will come from treating it as an investment asset, investing in L2, DeFi, CeFi, and other ecological projects, allowing holders to gain profits from them. This will become an important development trend in the Bitcoin ecosystem.

• Miners' future earnings come from newly issued BTC and transaction fees, the latter of which depends on ecosystem activity. More interesting staking projects can incentivize ecosystem development, bringing more on-chain activities and transactions, enhancing network security, and increasing miners' transaction fee income.

• PoS lacks external economic incentives, and its security is limited by the scale of the on-chain economy, posing a risk of being controlled. Bitcoin staking and restaking protocols introduce large external Bitcoin assets to provide security for the PoS network, addressing its inherent flaws. This is the rationale behind Bitcoin ( re) staking.

• Experts predict that Bitcoin staking will be a market worth tens of billions of dollars, comparable to the early days of PoW mining, and will meet the future demand for high-performance application chains requiring secure infrastructure.

• Four key areas to focus on for the future of the Bitcoin ecosystem: architectural innovation, L2 development path selection, efficient asset circulation, and security assurance.

• For ecological builders and entrepreneurs, in the short term, attention can be focused on solving the congestion issues in the BTC network to accommodate the overflow demand; in the medium term, the focus can shift to the income needs of holders; and in the long term, the aim should be towards the ecological development prospects after potential upgrades to the scripting language. It is worth noting whether more application scenarios closely related to Bitcoin will emerge in the future? Will there be better tools to facilitate Bitcoin usage? And will there be novel programming models to overcome its non-Turing completeness?

• As an innovative project in the Bitcoin ecosystem, a certain protocol's solution addresses objective violations, while other similar projects respond to subjective attacks.

Overall, experts unanimously believe that the BTC ecosystem contains immense opportunities, whether in the short term, medium term, or long term. With the continuous development and innovation of the ecosystem, Bitcoin is expected to play a greater value and influence in the future.