According to Bloomberg, the recent launch of US Bitcoin has sparked interest among developers who believe that adding programmability to Bitcoin could be the solution to its intentional design flaw. Over the years, developers have attempted to rectify this flaw by building Bitcoin 'Layer 2' networks. However, the recent development of 'Arch', an application platform that runs on top of Bitcoin, has changed the game. This software could potentially allow apps from the Layer 1 Foundation to run computations similar to smart contracts on Ethereum.
The Layer 1 Foundation is also developing a programmable module for the BRC-20 metaprotocol, essentially messages stored in code layered on the Bitcoin blockchain. An indexer can locate these messages and run computations. Due to Bitcoin's longer block confirmation times compared to Ethereum, there is more time to perform computations. Eril Ezerel, founder of Best in Slot and Ordinals aggregator and explorer, believes this could lead to a new chapter in crypto.
However, not everyone in the Bitcoin programming community is convinced that this is the future of cryptocurrency. Some believe that the new Bitcoin L2s are expanding Bitcoin's reach, boosting the Ethereum ecosystem, and competing with it simultaneously. Despite this, new ventures are betting that this new type of programmability could lead to an influx of decentralized finance apps on Bitcoin.
Currently, the total value of tokens locked in the Bitcoin DeFi market is about $1.1 billion, compared to $52.7 billion for Ethereum, according to data tracker DeFi Llama. Toby Lewis, a founder of OrdinalsBot, suggests that Bitcoin's DeFi ecosystem could grow to be the largest in all of crypto, potentially reaching trillions of dollars of market cap over the next few years. This growth could be the next catalyst that Bitcoin investors are waiting for.