Experts unpack the future of bitcoin and its misconceptions
2025-01-02
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An Emergence panel hosted by M Group's Kevin McGrath earlier this month featured Stacks founder Muneeb Ali and Brendon Sedo, an initial contributor to Bitcoin scaling chain Core. The panel discussed the future of Bitcoin at length with a packed audience in Prague.
From misconceptions to a strategic reserve in the United States, here are the biggest takeaways from their talk on Bitcoin's future.
Biggest misconceptions about Bitcoin's future
The panel's first point of discussion centered around the biggest misconceptions surrounding Bitcoin's future.
The general consensus in the blockchain and cryptocurrency industry has been that Bitcoin is an old chain that you can't do anything with, Ali claimed, and this was reflected in the development community. Only in the past year or so has this misconception started to change as developers realize that you can — challenges aside — build on the industry's foremost blockchain.
"Developers are coming back to the mothership," Ali said, stating that more people are realizing that Bitcoin Layer 2s and sidechains will play a major role in Bitcoin's future. He also argued that "Bitcoin needs L2s more than Ethereum because Ethereum is programmable at the base layer."
In Sedo's mind, the idea that Bitcoin is merely a store of value is a misconception. Claiming that there exists a lot of latent demand, he said that, in his experience, "folks want to do things with their bitcoin; they want to collateralize it, they want to borrow [and] earn yield."
Bitcoin can take what worked from other blockchains
There used to be this idea, Ali claimed, back in the 2013-2014 era of Bitcoin that any successful experiments from any smaller chains would come back to Bitcoin. At the time, some looked at the then-immature Ethereum ecosystem as a testnet for Bitcoin.
“It took a very long time for that to pan out, but some of that is finally happening now,” Ali explained — adding that Ethereum has effectively contributed over five years of research and development, sparing Bitcoin project developers from spending another four or five years on discoveries that have already been made. These developers "don’t have to spend four or five years rediscovering what has already been discovered,” he added.
Research around trustless interoperability with other chains is also increasing, according to Sedo, which presents a massive opportunity — but he did note that we will need to see how it pans out.
Is a US strategic bitcoin reserve bullish?
The panelists unanimously agreed that establishing a strategic Bitcoin reserve in the United States would be a highly positive development if the government were to do it.
"It's definitely very bullish and a good thing," Sedo said. "I don't know how you can't see it as a very positive sign."
"It's kind of like game theory that bitcoiners have been talking about for a very long time," he summarized. "It's basically a dream game theory scenario."
Ali, meanwhile, provided a smaller-scale example of how it may be bullish. Citing large VC funds and endowments as examples, he argued that "if a new category comes along — such as ride-sharing — and becomes big enough, at some point, you're almost forced to enter. If you don't have a play in it, you're almost not doing your job."
"I think a similar dynamic plays out at the nation-state level," he added. "Especially if the U.S., which is still a superpower, does something — that puts a lot of pressure on other countries to respond to it."
They didn't proffer any guesses about which nation-state would "go next," assuming the U.S. follows through on its strategic bitcoin reserve, but Ali did note that, with big new things, "it takes longer than you think, and then it happens faster than you think."
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