Bitcoin Layer 1 instant payments bypass L2
A new protocol leverages mining scale to enable zero-fee, instant Bitcoin payments directly on Layer 1, potentially transforming Bitcoin from a static store of value into a highly transacted medium of exchange.
The argument
The guest, representing a top-10 Bitcoin miner, argued that by utilizing their mining capacity to process and bundle transactions directly into blocks they mine, they can bypass complex Layer 2 wrappers. This setup allows them to offer merchants a low 0.2% transaction fee (compared to traditional card networks' 1.5%-3.5%) and eliminate user fees, driving broader merchant and consumer adoption.
The thesis, stress-tested
✓ What validates it
- ✓Successful launch and open-source SDK release at the Consensus conference
- ✓Integration of the protocol by major third-party wallets like Trust Wallet or MetaMask
- ✓Adoption of the protocol by large-scale payment processors like Block or Stripe
▸ Risks discussed
- ▸Regulatory and KYC compliance requirements vary significantly by country
- ▸Requires integration and adoption by major wallets and payment processors to achieve scale
- ▸Dependent on the miner maintaining sufficient block-mining share to guarantee transaction processing times
Hear it yourself
"We had a couple of iterations, maybe, maybe a pivot or two, and and we can get to that later if you if you if you want to. But, essentially, by 2023, we've hit a pretty good product market fit. The product that we settled on is the digital miner product that allows anybody to download our app and essentially abstract all of the complications and all of the difficulties and the the the the jargon speak technicalities, etcetera, of, Bitcoin mining and and, just make it very transparent for people that, hey. You can buy a miner. You can invest, a set amount of capital into it."
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