Skip to content Skip to sidebar Skip to footer

Four New Options for Issuing Digital Assets Secured by Bitcoin

While a number of blockchain networks have been using the term “issuing blockchain-based digital assets” as a catchphrase for some time now, Bitcoin has fallen behind because of its emphasis on digital currency. Nevertheless, the idea has now been incorporated into the Bitcoin ecosystem.

This article describes how the most recent developments in Bitcoin technology allow the network to facilitate the issuance of digital assets while preserving its core.

4 New Ways to Issue Digital Assets Secured by Bitcoin

Let’s examine four distinct methods for issuing assets on the Bitcoin network, using both layer-2 and on-chain Bitcoin protocols.

1.) Ordinal Inscriptions for NFTs on Bitcoin

Bitcoin Ordinals have brought a novel method of producing Non-Fungible Tokens (NFTs) on the Bitcoin network, based on the Ordinals protocol. According to Ordinal Theory, every Satoshi—the smallest unit of currency in Bitcoin—has a unique identity. Every Satoshi may be traced and transferred with unique meanings thanks to the use of inscriptions.

Every Satoshi can also have content engraved on it, including pictures, films, audio files, and more. Ordinals have more immutability because all of its metadata is directly stored on the Bitcoin blockchain, in contrast to NFTs stored on other blockchains.

On other blockchains, in contrast, NFT picture files are kept off-chain. In addition, the links to the photos are included in the metadata, which might make it simple for outsiders to change the images. Since each satoshi is unique due to ordinals, they are truly non-fungible.

2.] Exchangeable On-Chain Coins

Within the Bitcoin network, BRC-20 tokens are a paradigm mover since they allow for fungible tokenization, opening the door to using the blockchain for purposes more than just digital currency and producing digital assets.

BRC-20 coins, in contrast to their ERC-20 equivalent, are based on Ordinal inscriptions rather than smart contracts. BRC-20 contributes to the development of a fungible token standard on Bitcoin Ordinals, enabling smooth integration with the network’s strong infrastructure, exchanges, and digital wallets.

3.) Taproot Assets

A new protocol called Taproot Assets makes it possible to issue, send, and receive assets over the BTC network. Users may now transfer assets using Bitcoin and the Lightning Network thanks to Taproot Assets, which takes advantage of Bitcoin’s most recent update, Taproot, to issue assets on top of the cryptocurrency.

Users of the Lightning Network can store more than just cryptocurrencies in their digital wallets by using Taproot Assets. In addition to providing liquidity for payments made in other assets, the system uses the Lightning Network to transport payments through the protocol.

Taproot Assets also aids in lowering network congestion and accelerating transaction speeds on the Bitcoin blockchain for a network that has experienced congestion problems in the past, particularly with the introduction of on-chain assets on the network.

4.) Tokens on Stacks, Both Fungible and Non-Fungible

With Stacks, the Bitcoin network’s layer-2 solution, smart contracts may be developed and integrated in a novel way. With Clarity intelligent contracts, which are protected by the Bitcoin blockchain, developers can construct both fungible and non-fungible tokens on the Stacks blockchain.

Because Stacks may take advantage of the security and settlement assurances of the Bitcoin ecosystem, they are intended to aid in the development of Bitcoin DeFi. By virtue of the Proof of Transfer Mechanism connecting the Stacks blockchain to Bitcoin, Stacks can settle transactions using BTC and benefit from the reputation of the Bitcoin platform.

Last Words

Users in the Bitcoin community are getting new opportunities as a result of the continuous improvements inside the Bitcoin ecosystem. NFTs, stablecoins, and fiat currencies can all be held in the same wallet by users thanks to the releases, which might significantly boost Bitcoin’s liquidity.

Novel applications for Bitcoin have the potential to accelerate the adoption rate of BTC, changing the perception of the cryptocurrency and drawing in new users.

Be the first to know

Get the best of all crypto news updates coming from Nigeria, Kenya, SA, Ghana, and across Africa

Show CommentsClose Comments

Leave a comment