Bitcoin halving, a significant event in the world of Bitcoin, is approaching and is expected to occur next week.
Bitcoin is intentionally designed to have a maximum supply of 21 million coins. This is to prevent inflation and maintain currency scarcity.
For people who hold Bitcoin on a daily basis, the halving will have little or no impact on their lives. However, for Bitcoin miners, the halving will reduce the reward they receive for their work from 6.25 Bitcoins (BTC) to 3.125 BTC.
This means that Bitcoin miners will inevitably suffer a reduction in revenue after the event, and inefficient miners are likely to lose access to Bitcoin rewards all together.
read more: Why will 2140 be the end of Bitcoin inflation?
Bitcoin founder Satoshi Nakamoto's original hope was that Bitcoin would become widely adopted over time, and that transaction fees would cover miners' operating costs. Although miners are starting to make more money through transaction fees, many are still concerned that transaction fees alone are not enough to keep miners in the network.
For this reason, many Bitcoin developers are trying to increase interest in the network by developing tools that allow more users to participate in the blockchain ecosystem.
read more: Bitcoin halving is just weeks away – here’s how miners are preparing
Resurrection of Bitcoin development
Mark Hendrickson, general manager of Bitcoin Wallet Leather, told Blockworks that there has been a resurgence in Bitcoin development over the past year.
“We first saw Ordinals Protocol as a wallet provider. Since that catalyst, we have witnessed Stamp, BRC-20, OP_CAT, and now Rune at just the base layer. Many Bitcoin Builders are now looking to expand through the growing Layer 2 ecosystem with new Layer 2 announcements like Merlin and B² Network, as well as greater innovation with established Layer 2s like Lightning Network and Stack.” Hendrickson said.
Hendrickson noted that developers are currently seeking the best programmability around Bitcoin, and there are encouraging signs of healthy competition within the ecosystem to unlock Bitcoin's capabilities. .
read more: Q&A: What does Bitcoin halving mean for Bitcoin L2?
Jeremy Bruestle, CEO and co-founder of RISC Zero, shares this sentiment. He added that there is also growing interest in bringing zero-knowledge (ZK) technology to the Bitcoin blockchain, with significant development resources being allocated to innovation in the ecosystem.
“Addressing the challenges of scaling Bitcoin while ensuring on-chain verifiability and data availability has been the holy grail of Bitcoin development for nearly a decade. That's why ZK and Bitcoin are such a great technology combination,” Brussel said.
Brussel points out that we're only seeing the tip of the iceberg. He says that by adopting his ZK technology for Bitcoin, the technology itself could be applied to smart contracts on Ethereum and the Bitcoin ecosystem.
read more: Bitcoin still has scaling issues
But Hendrickson is cautiously optimistic about the future. Hendrickson believes that given the current pace of innovation development, there is a need to focus on token standards rather than experimentation in the Bitcoin ecosystem.
“If we're really going to bring activities like DeFi and art collecting to Bitcoin, we need to provide security, safety, and an easy user experience,” he said.
Don't miss the next big story – join our free daily newsletter.
