Building Everything on Bitcoin: A Comprehensive Overview

Introduction

Bitcoin, originally designed as a peer-to-peer electronic cash system, has matured into a secure base layer underpinning a growing ecosystem of applications. While Bitcoin’s base layer (Layer 1) focuses on robustness, decentralization, and simple transactions, recent innovations have expanded Bitcoin’s utility beyond just a store of value or payment network. Developers are now “building everything on Bitcoin” by leveraging new technical layers and protocols that unlock capabilities like smart contracts, decentralized finance (DeFi), non-fungible tokens (NFTs), and more – all secured by Bitcoin’s unparalleled network integrity. This report provides a comprehensive overview of this trend, covering the technical infrastructure (Layer 2 networks, sidechains, and smart contract platforms), notable projects and protocols leveraging Bitcoin, the technical strengths and limitations of Bitcoin as a development platform (compared to other blockchains like Ethereum and Solana), the ideological and economic rationale for choosing Bitcoin as a foundation, and recent trends in developer activity and ecosystem momentum.

Technical Infrastructure for Development on Bitcoin

Bitcoin’s Base Layer: Bitcoin’s Layer 1 offers a simple scripting system for transactions, intentionally limited in functionality for security. Bitcoin script is not Turing-complete (no loops or arbitrary logic), meaning complex smart contracts cannot run directly on the base chain. This conservative design minimizes vulnerabilities – Bitcoin’s simpler scripts result in “fewer moving parts to exploit” . The trade-off is that Bitcoin L1 cannot natively support the rich dApps and tokens seen on platforms like Ethereum. To enable more advanced use cases, Bitcoin relies on Layer 2 networks and sidechains that extend its capabilities without altering the core protocol. Recent soft-fork upgrades (like SegWit in 2017 and Taproot in 2021) have also increased Bitcoin’s flexibility and paved the way for new innovations (e.g. SegWit enabled the Lightning Network by fixing transaction malleability , and Taproot improved efficiency and privacy for complex scripts).

Layer 2 Solutions (Lightning Network): The most prominent Layer 2 is the Lightning Network, a payment protocol built on top of Bitcoin for fast and low-cost transactions. Lightning works by opening payment channels between users off-chain; Bitcoin transactions are only used to open or close these channels, greatly increasing throughput and speed . Within a channel, parties can exchange numerous payments instantly, and the net result is settled to the Bitcoin blockchain when the channel is closed. By routing payments across a network of channels, Lightning allows users who aren’t directly connected to transact through intermediaries, still without trusting any central party . This architecture enables “instant, low-fee transactions” on Bitcoin and significantly improves scalability, analogous to running a bar tab instead of settling every drink with a separate card charge . The Lightning Network has gained traction as Bitcoin’s scaling solution for payments, with growing real-world adoption. Major exchanges (e.g. Bitfinex, Kraken, Binance, and Coinbase) and even retailers have integrated Lightning for deposits, withdrawals, or point-of-sale transactions . For example, Strike (a Lightning payments app) partnered with Shopify and NCR to enable Bitcoin payments at merchants like McDonald’s via Lightning – allowing customers to pay in BTC while merchants receive fiat, with nearly zero fees . As of late 2025, the Lightning Network’s capacity hit a record ~5,637 BTC (≈$490M), reflecting the amount of Bitcoin locked in channels . This capacity growth – up ~12× in two years – signals confidence in Bitcoin’s utility beyond speculation. In fact, by December 2025 the network was processing over 8 million transactions per month with a >99% payment success rate (in well-connected channels) , supporting use cases from micro-tipping and content streaming to gaming rewards and remittances . Lightning’s success demonstrates that Bitcoin can scale for high-volume usage through layered architecture, preserving the base layer for final settlement and security.

Bitcoin Sidechains and Smart Contract Platforms: In addition to Lightning, developers have created sidechains and related platforms to bring smart contracts and other features to Bitcoin. A sidechain is an independent blockchain that is pegged to Bitcoin so that BTC can move between the chains (typically via a 2-way peg or “bridge”). Notable Bitcoin sidechains/platforms include:

• Liquid Network: Launched by Blockstream, Liquid is a federated sidechain that enables faster, confidential transactions and asset issuance using L-BTC, a 1:1 bitcoin-backed token . Liquid is designed for exchanges, traders, and institutions – it shortens settlement to ~1 minute and supports private transactions, but relies on a federation of functionaries to custody funds and validate blocks . This federation model means users must trust that majority of functionaries will act honestly (to not freeze or steal funds), a trade-off against Bitcoin’s trustless model . Liquid has been used for things like issuing stablecoins (Tether’s USDt exists on Liquid) and other digital assets. Its emphasis, however, is on high-speed transfers for large players (e.g. inter-exchange transfers) rather than enabling public DApps.
• Rootstock (RSK): RSK is a smart contract sidechain that is Ethereum Virtual Machine (EVM)–compatible, effectively bringing Ethereum-like functionality to Bitcoin . BTC can be “pegged in” to RSK and converted to RBTC for use in RSK’s contracts, then redeemed back to mainchain BTC. RSK reduces block time to ~30 seconds , and offers much higher transaction throughput than Bitcoin L1. With EVM compatibility, developers can port Solidity smart contracts to RSK and build decentralized applications (DApps) for Bitcoin’s ecosystem. In essence, “any Ethereum application can [be used] on Bitcoin” via RSK . RSK has fostered a small DeFi ecosystem – for example, Sovryn, a Bitcoin DeFi platform on RSK, has handled over $2B in trading volume , enabling lending, trading, and borrowing using BTC as collateral. RSK’s design is merge-mined with Bitcoin (sharing Bitcoin’s proof-of-work for security) and uses a federation for the BTC peg. While RSK significantly expands Bitcoin’s capabilities (allowing tokens, NFTs, and complex logic) and boasts up to 300 TPS throughput , it faces challenges: limited adoption and developer mindshare relative to Ethereum, and some centralization concerns around its federated peg and validator set . Still, RSK’s potential is noteworthy – one analysis noted it could offer 10× faster transactions and 50× cheaper fees than Ethereum , though capturing Ethereum’s market will require overcoming network effects and earning user trust .
• Stacks: Stacks (formerly Blockstack) takes a unique approach by being a separate Layer 1.5 blockchain that anchors to Bitcoin for security. Stacks has its own miners, token (STX), and smart contract language (Clarity), but every Stacks block’s hash is recorded on Bitcoin’s chain . This gives Stacks applications a “Bitcoin finality” – the state of Stacks is redundantly stamped onto Bitcoin, providing Bitcoin’s immutability as a backstop. Stacks uses a novel mining mechanism called Proof of Transfer (PoX) where Stacks miners spend BTC to compete to mine STX blocks . Those BTC expenditures are distributed to STX holders (“Stackers”) as rewards, effectively paying out in BTC. Through this mechanism, Stacks is secured by Bitcoin without a direct peg: STX is not backed 1:1 by BTC, but Stacks’ consensus and state progress rely on Bitcoin transactions. Stacks enables rich smart contracts (Clarity is a decidable, interpreted language designed for predictability and security) and has built a growing ecosystem of Bitcoin-integrated apps. Developers have launched DeFi protocols, NFT marketplaces, and Web3 apps on Stacks, with the assurance that all activity is anchored to Bitcoin’s ledger. For example, the Stacks-based DEX ALEX introduced a BRC-20 trading platform that boosted Stacks’ DEX volumes by 50% . The total value locked (TVL) in Stacks DeFi grew from ~$7M to over $50M in 2023 . Stacks’ STX token is also notable as one of the first SEC-qualified crypto tokens (approved via Reg A+ in 2019), and its holders can “Stack” STX to earn Bitcoin rewards (yield derived from miners’ BTC spend). Upcoming upgrades (e.g. the sBTC initiative) aim to enable a trust-minimized BTC bridge, improving how Bitcoin can be moved into Stacks contracts . Stacks markets itself as “the leading Bitcoin L2 for smart contracts, apps, and DeFi”, letting developers “build apps that leverage Bitcoin as a secure base layer” . Its approach avoids modifying Bitcoin or requiring BTC to run arbitrary code, instead using a separate chain that symbiotically benefits from Bitcoin’s stability.
• Other Layer-2 and Sidechain Initiatives: Beyond the major players above, the Bitcoin ecosystem is experimenting with several other layer-2 or sidechain concepts. Fedimint, for instance, is a federated custody protocol enabling community-run Bitcoin “banks” (with privacy via Chaumian e-cash) that can integrate with Lightning. Drivechains (BIP-300/301 proposals) are a concept to allow multiple, user-selectable sidechains pegged to Bitcoin, secured by Bitcoin miners; this remains under discussion and not yet deployed. Statechains are another idea, enabling off-chain transfer of UTXOs between parties (useful for moving BTC quickly without on-chain transactions). Additionally, research initiatives like Simplicity (a new smart contracting language by Blockstream) and Miniscript (a safer way to compose Bitcoin Scripts) are expanding what developers can do directly with Bitcoin’s scripting—though still within Bitcoin’s fundamental limits. These efforts reflect a broad push to extend Bitcoin’s functionality “without sacrificing the core security of [the] UTXO-based design” . The guiding philosophy is to keep Bitcoin’s base layer simple and robust, while using layers on top (or pegged to it) for innovation. This layered approach contrasts with monolithic smart contract chains and aligns with Bitcoin’s ethos of minimizing trust and change at the base layer.

Significant Projects and Protocols Built on Bitcoin

Thanks to the above infrastructure, a variety of applications are now flourishing on Bitcoin or its extensions. Below is an overview of major project categories leveraging Bitcoin:

• Lightning Network Applications: The Lightning Network not only scales payments but also unlocks novel use cases for Bitcoin. A range of Lightning apps (LApps) have emerged: for example, Strike and Cash App use Lightning for instant remittances (a user can send dollars which convert to BTC and back to local currency for the recipient, reducing remittance fees from ~5% to nearly 0% ). Micro-payment platforms like podcasting app Fountain allow streaming satoshis (fractions of BTC) to content creators per minute of audio – something infeasible with on-chain fees . Social networks (like Nostr, a decentralized protocol often used with Lightning “zaps” for tipping) and messengers (like Sphinx chat) enable tipping, paywalls, or rewards via Lightning. In online gaming, startups (e.g. Zebedee) integrate Lightning for real-time rewards in BTC. There are also trading applications such as LN Markets, a derivatives exchange where users trade using a Lightning channel (enabling instant deposits and withdrawals with no custody). These illustrate how Lightning’s fast, low-cost nature is spurring innovation in areas requiring high-frequency or tiny transactions, from IoT machine payments to pay-as-you-go APIs . Lightning is also increasingly used by merchants for everyday payments: in countries like El Salvador (where Bitcoin is legal tender), vendors from street food stalls up to McDonald’s accept BTC via Lightning invoices. The expanding support by major exchanges and payment processors means users can seamlessly use Lightning for transfers – by early 2025 Coinbase reported over 15% of its Bitcoin withdrawals were already going through Lightning after it enabled the feature . Overall, Lightning has catalyzed a Bitcoin payments renaissance, fulfilling Bitcoin’s original vision as “electronic cash” in a scalable way.
• Ordinals and NFTs on Bitcoin: A breakthrough development in 2023 was the advent of Ordinals and Inscriptions, which effectively enabled NFTs and digital artifacts directly on Bitcoin’s L1. The Ordinals protocol (created by Casey Rodarmor) allows numbering each satoshi in the blockchain and “inscribing” it with arbitrary data (images, text, etc.), stored in witness data of transactions. Using this method, users began embedding artwork, collectibles, and other media on-chain as Bitcoin NFTs. This was unprecedented in Bitcoin’s history – earlier attempts at colored coins or Counterparty tokens always relied on off-chain data or small OP_RETURN pointers, whereas Ordinals put the full content (e.g. an image file) in the blockchain. Starting in early 2023, Ordinals sparked a frenzy of activity. By March 2024, over 67.3 million inscriptions had been recorded . A massive wave of these were driven by a new class of fungible tokens on Bitcoin: BRC-20 tokens. Introduced by a pseudonymous developer “Domo” in March 2023, BRC-20 is a token standard akin to Ethereum’s ERC-20 but implemented via Ordinals inscriptions of JSON data (defining token supply, transfers, etc.) . Essentially, a BRC-20 token involves inscribing a script file (JSON) on a satoshi that declares a token name, maximum supply, and minting or transfer operations; Bitcoin nodes or indexers then track these like a token ledger. This clever hack requires no changes to Bitcoin – it operates outside Bitcoin’s rule-set, similar to how writing data in a Bitcoin transaction can create an overlay protocol. The popularity of BRC-20 blew up in spring 2023: meme tokens like “ordi”, “pepe”, and others were issued, some attaining market caps in the millions of dollars . On April 2, 2023, daily Ordinal inscriptions hit a record (72,328 in one day – over double the previous peak) as BRC-20 minting activity surged . At one point, text inscriptions (largely BRC-20 transactions) comprised the majority of new entries, driving up blockspace usage and Bitcoin transaction fees. By transaction count, BRC-20 operations became the dominant type of Bitcoin transaction – one analysis noted that as of mid-2025, BRC-20 token mints and transfers made up the vast majority of Ordinal transactions . Overall, about 77.7% of all inscriptions by March 2024 were BRC-20-related (only ~3.5% were image inscriptions, the remainder being text/JSON) . This phenomenon revealed both the potential and challenges of Bitcoin’s new expressiveness: it expanded Bitcoin’s utility (people were issuing stablecoins, game tokens, and more via BRC-20) but also clogged the mempool and led to debate in the community. Some Bitcoin purists called these usages “spam,” and one Core developer even marked the Ordinals method as a potential vulnerability in the protocol (assigned a CVE tag) . Nevertheless, Ordinals and BRC-20 demonstrated that Bitcoin can host a vibrant NFT and token economy. An entire ecosystem sprung up: NFT marketplaces for Ordinals (e.g. Ordswap, Magic Eden’s Bitcoin section), wallets with Ordinal support, and indexing services. Innovators also proposed alternatives like “Runes” (a draft protocol by Rodarmor to optimize fungible tokens) and “Taproot Assets” (formerly Taro by Lightning Labs) to issue assets more efficiently. The Ordinals craze subsided from its initial peak – e.g. after a May 2023 boom, NFT trading on Bitcoin cooled by late 2023 – but a baseline of activity remained. By making Bitcoin “fun” and expressive, Ordinals attracted new builders (including some from Ethereum NFT communities) to experiment with Bitcoin. It also crucially established a fee market for blockspace beyond just BTC transfers, which some argue will help Bitcoin’s long-term security model as block subsidies dwindle . In summary, Bitcoin now has a viable NFT scene and even rudimentary tokens directly on L1, something once thought impossible without compromising the protocol. This has broadened the perception of Bitcoin from “just digital gold” to a platform where creative assets and communities can thrive (albeit in a very different technical manner than on Ethereum).
• Bitcoin DeFi and Financial Services: With platforms like RSK and Stacks, decentralized finance on Bitcoin is becoming a reality. On RSK, projects like Sovryn and Money on Chain offer lending, borrowing, trading, and stablecoins (DOC on Money on Chain is a BTC-collateralized stablecoin). Sovryn, as mentioned, processed over $2B in trades and provides services like margin trading and liquidity pools using BTC as the primary asset . Another RSK-based protocol, Babelfish, aggregates stablecoins from multiple chains (including those bridged to RSK) to improve liquidity. While RSK’s DeFi ecosystem is small relative to Ethereum’s, it illustrates a path for Bitcoin-backed assets to participate in DeFi without leaving Bitcoin’s orbit. Over on Stacks, several DeFi projects have launched: ALEX is a one-stop DeFi platform (DEX, lending, launchpad) that even built a bridge to trade BRC-20 tokens ; Arkadiko offers collateralized stablecoins and yield mechanisms via Stacks; Stackswap and Megapont facilitate token launches and NFT trading on Bitcoin through Stacks. Uniquely, Stacks has a concept of “Stacking” (locking STX to earn BTC yield), which is a DeFi-like incentive that directly rewards participants in Bitcoin – over 1000 BTC has been distributed to Stackers to date, showcasing a Bitcoin-native yield source. Another area is bitcoin-backed loans and BTC yield generation in a more centralized but Bitcoin-focused manner – e.g., services that let holders borrow against BTC or earn yield by routing liquidity on Lightning. The ecosystem also includes Bitcoin lending markets (like HodlHodl’s Lend or Atomic Loans) and Bitcoin-focused asset managers creating structured products on BTC yield. While these may not all be “on-chain” smart contracts, they highlight the financialization of Bitcoin holdings in a trust-minimized way.
• NFTs and Gaming on Bitcoin Layers: In addition to on-chain Ordinals, Bitcoin’s side layers also support NFTs and gaming assets. Stacks, for instance, saw NFT collections (like Bitcoin Birds, Megapont Apes) that use Bitcoin for settlement. The CrashPunks NFT collection even enabled “Stacking” of NFTs for BTC rewards. On Lightning, there are simple NFT-like constructs (LN “immutable invoices” can serve as digital artifacts) and gaming rewards as mentioned. Even Counterparty – the 2014-era protocol that produced the famous Rare Pepe NFTs on Bitcoin – has seen a minor resurgence, as those assets gained historical significance. More recently, a protocol called Bitcoin Stamps (inserting image data in spendable ordinals via OP_RETURN) offered an alternative way to encode pixel art on Bitcoin; and Tlputs (Trustless lotteries) emerged, showing creative uses of Bitcoin Script for fun dApps. These remain niche, but they exemplify a growing creativity in using Bitcoin as a base for collectibles and interactive experiences, often tying into Bitcoin’s culture and memes.
• Other Emerging Protocols: There are projects leveraging Bitcoin for identity and web infrastructure as well. For example, Microsoft’s ION is a decentralized identity (DID) network operating as a Bitcoin Layer 2 – it anchors DID operations (create/update keys, etc.) into Bitcoin transactions, providing a tamper-evident ledger for identity claims . This allows login systems or credentials that are self-sovereign but secured by Bitcoin (users own their identifiers, and the public key mappings are tied to Bitcoin’s blockchain). Similarly, the earlier Blockstack system (now Stacks) had a decentralized naming system for user identities and domains, recorded on Bitcoin. Another example is Nostr, a decentralized social media protocol that is not on a blockchain at all, but has integrated Bitcoin by using Lightning for payments and identity (Lightning pubkeys as account identifiers). The synergy of Nostr and Bitcoin grew so strong that Jack Dorsey’s node implementation for Nostr is named “Damus” after a Bitcoin meme, and many in the Bitcoin community use Nostr as a censorship-resistant social platform with Lightning “zaps” (tips). While not on Bitcoin’s chain, it leverages Bitcoin’s ecosystem to empower users in new ways. All these show that Bitcoin’s role is expanding as a base trust layer or value layer for various applications.

In summary, virtually every major crypto use case has some analog in the Bitcoin world now: payments (Lightning), DeFi (RSK/Stacks), NFTs (Ordinals/Stacks), tokens (BRC-20, Taro), identity (ION, Blockstack), etc. Many of these are still early-stage or smaller scale relative to their Ethereum counterparts, but they are rapidly evolving. As one 2023 conference dubbed it, we are seeing a “Bitcoin Renaissance” of innovation, with builders flocking to Bitcoin to “try all these experiences to see what works” . The next sections will analyze how Bitcoin’s technology differs from other chains, and why a growing number of developers and users are choosing to build on Bitcoin despite the challenges.

Bitcoin vs. Other Blockchains: Capabilities and Limitations

When comparing Bitcoin as a development platform to smart contract blockchains like Ethereum or Solana, several key differences emerge:

Programming Model: Bitcoin’s base layer uses the UTXO (unspent transaction output) model and a limited scripting language. Bitcoin Script is intentionally constrained – it’s not Turing-complete, has no concept of global state or looping, and primarily enables basic spending conditions (signatures, hashlocks, timelocks, multisig, etc.). This makes Bitcoin transactions very predictable and secure (fewer complex failure modes), but also means you cannot easily program arbitrary application logic on L1. In contrast, Ethereum uses an account model with a global state, and the EVM (Ethereum Virtual Machine) which is Turing-complete. Developers can write smart contracts in high-level languages (Solidity, Vyper) that compile to EVM bytecode, enabling complex decentralized applications directly on-chain. Solana similarly uses an account model and a high-performance runtime where programs (written in Rust, C, etc.) execute on-chain. The trade-off here is between expressiveness and simplicity/safety. Ethereum’s expressive design has led to an explosion of DeFi and NFT apps, but also many bugs and exploits (e.g. The DAO hack in 2016, countless DeFi hacks exploiting complex contract logic) . Bitcoin’s conservative design has never been compromised at the protocol level – a point often attributed to its simplicity. As one analysis put it, Bitcoin “avoids complexity on L1, betting that advanced functionality can be achieved via layers without sacrificing base-layer security” . If a feature can be built as a second-layer protocol or sidechain, Bitcoin core developers generally prefer that over adding risk to consensus code. This makes Bitcoin development slower and more deliberate, but yields a very stable foundation. For developers, it means building on Bitcoin often involves learning new paradigms (UTXO-based programming, off-chain protocols, etc.) rather than simply writing a quick Solidity contract. However, recent tooling like Miniscript (which makes composing complex Bitcoin scripts easier) and Taproot (which allows smart contracts to be hidden as single-signature outputs until executed, enabling more flexibility like MuSig and future covenant capabilities) are gradually improving Bitcoin’s native programmability.

Throughput and Speed: Bitcoin’s blockchain has a 10-minute average block time and a limited block size (~1–4 MB with SegWit), yielding on-chain throughput on the order of 5–7 transactions per second in practice . This is a far cry from conventional payment networks (Visa processes ~1700 TPS on average ) and from newer chains: Ethereum’s base layer handles ~15–30 TPS (with ~12-second blocks), and Solana can process thousands of TPS with sub-second block times (in ideal conditions). The result is that Bitcoin L1 prioritizes security over performance – under high demand, Bitcoin transactions face backlogs and high fees, as seen during surges (e.g. the Ordinals frenzy in May 2023 caused fees to spike and blocks to consistently hit the 4MB weight limit). Solana, by contrast, was designed for high throughput (parallelizing transactions and using a form of time-scheduling via Proof-of-History) to support web-scale applications like high-frequency trading or social networks on-chain. But higher throughput often comes at the cost of decentralization or reliability: Solana’s history includes network outages and resets during 2021–2022 when on-chain traffic overwhelmed its nodes. Ethereum has taken a middle path of improving base efficiency and relying on Layer 2 scaling (rollups) for higher throughput; post-2023, Ethereum expects most transactions to happen on L2 rollups with data posted to L1 for security, somewhat analogous to Bitcoin’s layered approach (indeed, Bitcoin’s Lightning is conceptually similar to an Ethereum state-channel network, and emerging Bitcoin “rollups” concepts use Bitcoin for data availability). In summary, Bitcoin’s base layer is intentionally not throughput-optimized – it relies on layers like Lightning for speed. This means real-time or high-volume applications must use those layers, which can complicate development but yields a very robust base chain. Ethereum and Solana offer one-stop higher throughput environments, which can be more developer-friendly for certain applications (e.g. launching a new token or NFT is trivial on Ethereum via a smart contract, whereas on Bitcoin it requires an external protocol like Ordinals or a sidechain).

Finality and Consistency: Bitcoin’s proof-of-work consensus is probabilistic – a transaction is generally considered final after ~6 confirmations (~1 hour) to guard against chain reorgs. Ethereum, since the move to Proof-of-Stake (in 2022’s Merge), now has faster block finality (via checkpointing; blocks are finalized within minutes under normal conditions) and does not rely on probabilistic work. Solana’s PoS has very quick confirmations (often 1–2 seconds) but weaker decentralization in validator set. The difference can matter for certain financial applications: for instance, rapid trading or lending platforms may prefer the faster finality of Ethereum or the near-immediacy of Solana. However, Bitcoin’s long confirmation time is partly mitigated by the fact that Bitcoin doesn’t revert – it has over a decade of consistent operation without major consensus failures, giving confidence that even if slow, it is extremely steady. Additionally, Layer 2 networks can provide instant settlement assurances (Lightning payments are instant and, once delivered, effectively final for practical purposes, as they would require breach of channel security to reverse). So, Bitcoin shifts the user experience: fast interactions happen off-chain; the base layer acts as the settlement and dispute resolution layer. This is conceptually similar to how many Ethereum apps are moving to rollups (optimistic or ZK-rollups achieve fast user experience with delayed settlement on L1). Another point is uptime: Bitcoin prides itself on near 100% uptime (99.99%+ since launch – no scheduled downtime, no chain halts), whereas Solana’s bleeding-edge design has led to several outages that required validator coordination to restart. Ethereum had one major rollback in its history (the 2016 DAO fork) for social reasons, which Bitcoin maximalists often cite as a lack of immutability. These aspects highlight philosophical differences: Bitcoin treats the base layer as sacrosanct and slow-moving, Ethereum is willing to evolve more rapidly (and even undo events like the DAO exploit to preserve its vision of the platform), and Solana aims to maximize performance even if it means pushing the limits of decentralization.

Security and Decentralization: Bitcoin is widely regarded as the most decentralized and secure blockchain due to its high node count, enormous mining power, and longest operational history. By some estimates, Bitcoin has tens of thousands of fully validating nodes globally (exact numbers vary, but it’s easily accessible to run a Bitcoin node on commodity hardware, which encourages a broad distribution). The proof-of-work mining on SHA-256 has aggregated immense hash power (~ hundreds of exahashes per second), making a 51% attack economically unfeasible at nation-state scales. Moreover, Bitcoin’s protocol rules have remained stable – changes require near-unanimous community agreement (e.g. SegWit’s soft fork had broad consensus). Ethereum, while also significant, has a lower number of nodes (the resource requirements for running an Ethereum node, especially after enabling an archive of state, are higher than Bitcoin’s UTXO set) and has shifted to proof-of-stake, which introduces different trust assumptions (e.g. the need to trust that a supermajority of staked ETH will follow protocol rules and not collude). Solana is even more centralized in practice – it’s optimized for high throughput at the cost of requiring very powerful hardware to run a validator (which narrows the participants largely to those with data-center resources). In a telling statistic: Bitcoin has never been compromised or fundamentally changed, whereas Ethereum has had critical bugs (though quickly patched) and one major fork as mentioned, and Solana’s youth has seen various stability incidents . For developers prioritizing robustness and trust minimization, Bitcoin provides a sense of confidence that the base protocol will not unpredictably change or fail. It is “a network that prioritizes security and consistency over rapid change” – akin to an extremely reliable backend server. However, that also means if you need a feature that Bitcoin doesn’t support, you can’t expect it to be added quickly, if ever. Ethereum’s community, by contrast, pushes frequent upgrades (roadmaps with sharding, The Surge, etc.) to enhance performance and features, which can be seen as positive for innovation but concerning for stability (each upgrade has potential risks).

Development Ecosystem: Ethereum clearly leads in sheer number of active developers and resources. By late 2023, Ethereum had on the order of 5,000+ monthly active developers, and it has been the origin of 71% of all smart contract code that other chains later adopt . Ethereum’s tooling – IDEs, libraries, frameworks like Truffle/Hardhat, extensive documentation – make it relatively straightforward to build and deploy a new dApp or token. Solana also boasts a passionate developer community (especially for novel projects like NFT marketplaces, games, etc.) with its own set of tools (e.g. Anchor framework for Solana programs). Bitcoin’s developer ecosystem is comparatively smaller and historically focused on protocol development rather than applications. According to Electric Capital’s 2023 report, Bitcoin had ~1,071 monthly active open-source developers working on Bitcoin-core and ecosystem projects (not counting those working on closed-source or enterprise projects) . This was actually a decline from the prior year by about 20%, mostly due to fewer new hobbyist devs during the bear market, although the number of experienced Bitcoin devs rose slightly . Importantly, a significant portion (roughly 40%) of Bitcoin’s developer efforts in 2023 was devoted to Layer 2 and scaling solutions – reflecting the focus on Lightning, sidechains, and now Ordinals. In fact, about 3% of Bitcoin developers were working on Ordinals-related tech after its introduction . This indicates that while Bitcoin’s app layer is newer, it is gaining attention. Still, the mindshare and knowledge base for writing, say, a Lightning application or a Stacks smart contract is not as large as that for writing an ERC-20 token contract on Ethereum. Bitcoin development has a higher learning curve in many cases, and fewer “plug-and-play” templates. That said, the gap is narrowing as new tools and SDKs emerge: for example, Lightning Development Kit (LDK) and Bitcoin Dev Kit (BDK) (supported by Spiral, a Block subsidiary) aim to make integrating Bitcoin and Lightning into apps easier. Clarity, Stacks’ smart contract language, provides a secure-by-design approach (static analysis, no reentrancy bugs, etc.) for building contracts that interact with Bitcoin state. And efforts like RGB protocol (for issuing assets and smart contracts off-chain with Bitcoin as the “court”) and BitVM (a 2023 proposed framework for arbitrary computation in a Bitcoin trust-minimized way) are pushing Bitcoin development forward. To summarize, Bitcoin lags in built-in capabilities and dev tooling compared to chains like Ethereum, but it compensates with extraordinary security and a design that minimizes the chance of catastrophic mistakes. The ecosystem is actively trying to provide the “missing pieces” through layers and tools, guided by the belief that this approach yields a more robust and scalable stack in the long run . Whether that proves true will depend on continued progress in Bitcoin layers and the willingness of developers to adopt a layered mindset.

Comparison Snapshot: The following table highlights some key differences:

Attribute	Bitcoin (Base Layer)	Ethereum (Base Layer)	Solana (Base Layer)
Consensus	Proof of Work (SHA-256); highly decentralized miners & nodes .	Proof of Stake (since 2022); validator set changes, less energy use.	Proof of Stake (Tower BFT); high-performance validators (requires powerful nodes).
Block Time	~10 minutes (probabilistic finality ~60 min for 6 confirms).	~12 seconds (finalized within ~6–12 min via PoS checkpoints).	~0.4 seconds (new block ticks quickly, finality within seconds, but past outages show potential instability).
Throughput (L1)	~5–7 TPS typical (limited by 1MB/4MW block size). Scaling via Layer 2 (Lightning ~millions TPS theoretical off-chain).	~15–30 TPS on L1 (gas-limited); scaling via Layer 2 rollups (many hundreds or more TPS off-chain).	Thousands TPS on L1 (can reach ~65k TPS in bursts in ideal lab conditions). No separate L2 needed for current usage.
Smart Contracts	Very limited on L1 – simple scripts, no loops. Complex logic via off-chain or sidechains. Taproot enables more flexibility (e.g. multisig contracts, Taproot Assets) but still not general-purpose.	Yes – Turing-complete via EVM. Rich smart contracts (DeFi, NFTs, etc.) directly on-chain. Large ecosystem of contract templates and standards (ERC-20, ERC-721…).	Yes – via on-chain programs written in Rust/C. High complexity possible (Serum DEX, Metaplex NFTs on-chain). Requires careful coding (no global interpreter like EVM; uses explicit program logic).
Security/Decentralization	Highest – most battle-tested, >13 years with no protocol hacks. Thousands of nodes, mining power billions of dollars, very hard to 51%. Design favors security over features .	High, but less than BTC by some measures – PoS has different attack surfaces (nothing-at-stake issues, potential centralization in staking). Ethereum’s history includes one rollback (DAO fork) and various contract exploits (not consensus faults) .	Lower – smaller and more concentrated validator set; chain has been halted/restarted in past. Prioritizes performance over maximum decentralization. Still considered secure for many apps, but critics point to frequent upgrades/outages earlier as risks.
Dev Ecosystem	~1000 monthly open-source devs (2023) . Tooling improving (Lightning SDKs, Miniscript, Clarity on Stacks). Smaller pool of auditors and auditors (few Bitcoin DeFi protocols to audit vs Ethereum’s many). Very strong core protocol dev community.	Thousands of devs (Ethereum had ~5k active in 2023, plus many more on related L2s) . Mature tooling, extensive documentation, large community. Many auditors and experienced teams (though hacks still occur due to complexity).	Growing community; Solana devs enjoy building games, consumer apps. Rust expertise needed. Tooling like Anchor framework helps. Fewer auditors available (and Solana exploits have occurred, though often at interface layers like bridges).

Table: Bitcoin vs. Ethereum vs. Solana – A high-level comparison of technical characteristics.

In essence, Bitcoin as a base layer is optimized for maximal reliability, security, and decentralization at the cost of raw functionality and speed. Other smart contract chains offer a more developer-friendly canvas and higher throughput, but with additional complexity and (often) a more centralized or change-prone environment. Whether one is “better” depends on the use case and philosophy: if you need to quickly deploy a complex dApp with global state (like a new algorithmic stablecoin or a DAO), Ethereum might be the straightforward choice; if you want to build a hyper-fast Web3 game or social network entirely on-chain, Solana’s performance is attractive. But if your priority is a trust-minimized system with the most durable foundation (e.g. a long-term settlement network for high-value assets, or applications that specifically benefit from Bitcoin’s monetary properties), then building on Bitcoin (with layer-2 augmentation) may be worth the trade-offs. Many in the Bitcoin community believe that Bitcoin’s limitations can be surmounted by layers that preserve its core virtues, rather than compromising the base layer’s integrity. This perspective ties into the ideological rationale for focusing on Bitcoin, as discussed next.

The Case for Building on Bitcoin: Ideological and Economic Factors

Beyond technical comparisons, there is a strong ideological and economic argument made by Bitcoin proponents for why developers and entrepreneurs should build on Bitcoin instead of or in addition to other platforms. Key points in this case include:

• Unmatched Security and Stability: Bitcoin’s foremost value proposition is its security track record and decentralization. It is the longest-running blockchain (since 2009) with virtually no downtime and no successful attacks on its core protocol . Its conservative upgrade process means it changes very little over time – which is a feature, not a bug, for those who want a dependable base layer. As one analysis put it, “you are building on a network that prioritizes security and consistency over rapid change”, aligning with a system that values robustness above all . By building on Bitcoin, developers can promise their users that the underlying foundation (the Bitcoin blockchain) is as solid and censorship-resistant as it gets. This is especially important for applications dealing with high-value assets or critical data. For example, a decentralized identity system anchored to Bitcoin (like Microsoft’s ION) benefits from Bitcoin’s immutability – users can trust that their identifiers can’t be quietly altered or censored by a central party . A startup focusing on Bitcoin infrastructure can also market this: that they “align with a system that values robustness and trust minimization above all” , which serious users (and institutions) increasingly appreciate in light of failures on less secure systems. In contrast, platforms that take a “move fast and break things” approach have indeed broken at times – e.g. major DeFi hacks on Ethereum, or Solana’s outages . By choosing Bitcoin, developers side-step many of those smart contract risks (or defer them to layers where any issues won’t threaten the base currency). This risk mitigation and “battle-tested” assurance is a core ideological reason for Bitcoin-focused development.
• Monetary Soundness and Liquidity: Bitcoin is not just a tech platform, it is also the world’s largest cryptocurrency by market value (over $500 billion as of 2025) . It is broadly recognized as a store of value – often likened to digital gold – with a fixed supply cap and a strong track record of appreciation over the long term. The economic case here is that any application built on Bitcoin taps into the deep liquidity and user base of BTC. Bitcoin has tens of millions of holders globally and near-universal name recognition. Builders see an “enormous, largely untapped capital” pool in Bitcoin that can be activated for new uses . For example, if you create a DeFi lending platform on Bitcoin, your collateral and medium of exchange is BTC – which many investors are keen to deploy (possibly more so than more obscure altcoins). Stacks highlights this by noting “over $1 trillion in latent capital is waiting for builders… to activate it” . There is a belief that unlocking ways for people to do more with their BTC (earn yield, trade, use in games, etc.) will catalyze a huge wave of economic activity because Bitcoin is the dominant asset in crypto (Bitcoin’s market dominance was ~54% by mid-2024, and even higher by 2025 ). Another aspect is liquidity and reserve status: Bitcoin is listed on essentially every crypto exchange, accepted by more merchants than any other coin, and held by institutions and even governments. Building on Bitcoin means your application deals in a currency that is widely accessible and not likely to disappear. New L1 platforms often struggle to bootstrap an economy; on Bitcoin, the economy (BTC) is already there – it’s about extending its utility. This ties to user experience: one can use Bitcoin apps without needing to buy a new token for gas or fees (Lightning fees, for instance, are in satoshis; Stacks apps can abstract STX fees or users may be willing to hold STX knowing it’s bonded to BTC’s success; RSK’s RBTC is 1:1 with BTC, etc.). This one-currency model is attractive to those who think fragmentation into thousands of tokens is user-unfriendly and speculative. Bitcoin’s status as “digital hard money” also means Bitcoin-based businesses might attract users who are long-term value-oriented rather than chasing the next quick yield farm – arguably a more sustainable user base.
• Regulatory Clarity and Trust: Bitcoin enjoys a relatively unique position in regulatory circles. It’s widely acknowledged by regulators (in the U.S., EU, etc.) that Bitcoin is a commodity or digital property, not a security. This cannot be said for many altcoins, which regulators have hinted or outright claimed are securities (subject to stricter laws) or face legal uncertainties. For example, in mid-2023 the U.S. SEC had not targeted Bitcoin with any enforcement, while Ethereum and others were under varying degrees of scrutiny. This regulatory clarity means building on Bitcoin may involve fewer legal headaches – one doesn’t worry that BTC itself will be outlawed or that using Bitcoin’s network for transactions will trigger compliance issues (beyond standard AML/KYC for services). A Bitcoin business can more confidently integrate with banks or traditional companies who are often more comfortable with Bitcoin (due to its reputation and over a decade of due diligence done on it) than with “the latest smart contract platform.” This is echoed by observations that companies like Tesla, MicroStrategy, and Block have Bitcoin on their balance sheets but generally avoid holding large amounts of alternative coins . By focusing on Bitcoin, a startup might “future-proof [itself] against the risk that a competing platform is regulated out of existence or labeled a security” . Additionally, because Bitcoin has legal tender status in some countries (e.g. El Salvador) and is being embraced in various forms (ETFs, etc.), building on Bitcoin aligns with the part of crypto that’s becoming institutionally accepted. Ideologically, hardcore Bitcoiners also appreciate not having to create new tokens (which might be seen as unregistered securities or as unnecessary complexity) – they prefer leveraging BTC’s pure commodity nature.
• Alignment with Decentralization Ethos: Many developers are philosophically drawn to Bitcoin’s principles – the cypherpunk, libertarian ethos of decentralization, censorship-resistance, and permissionless innovation. Bitcoin’s community historically disdained “crypto for crypto’s sake” or overly complex systems that could reintroduce central points of failure. By building on Bitcoin, one aligns with its ethos and community values. This can translate into a passionate user base and a supportive developer community. For instance, when an exchange or service builds on Bitcoin or adds Lightning, they often get praise and patronage from Bitcoin enthusiasts, which can be a loyal and vocal group. Conversely, building yet another token on another chain might not inspire the same ideological support. There is also a moral narrative: Bitcoin maximalists argue that many altcoins are unnecessary or even scams, and that truly decentralized apps should ultimately anchor to the most secure base chain (Bitcoin) rather than fragmenting across weaker networks. In 2023, we saw a “cultural shift” even within the Bitcoin community from being solely HODLers to encouraging builders: leading voices urged “[let us] build the cool things we need” on Bitcoin rather than elsewhere . Muneeb Ali of Stacks phrased it as Bitcoin becoming “more powerful than ever” with layers, proving that “Bitcoin is programmable” and can reach its full potential if we create the right tools . The idea is that empowering Bitcoin with more uses will onboard the next billion users while preserving the qualities that made Bitcoin successful in the first place . In short, building on Bitcoin is seen as contributing to the evolution of Bitcoin as a full-fledged economic platform, not just riding on a trend. This ideological stance often includes a long-term view: Bitcoin is expected to be around for centuries, so apps anchored to Bitcoin might also enjoy longevity. The “time preference” of Bitcoin builders is often low; they prioritize sustainable growth and resilience.
• Economic Incentives and Network Effects: Economically, by building on Bitcoin, developers can potentially bootstrap user bases faster. For example, an app that lets users earn or use BTC might attract Bitcoin holders more easily than convincing users to try an app on a new chain with a new token. The network effect of Bitcoin’s brand and user network is strong. Some projects explicitly target Bitcoin’s sizable community – e.g. the emergence of Bitcoin DeFi was partly to serve people who refused to use Ethereum but still wanted DeFi-like services. Additionally, Bitcoin’s transaction fees (when blocks are full) create an incentive for more Layer 2 adoption: if on-chain usage and fees rise (as happened with Ordinals), users naturally seek solutions like Lightning or sidechains, driving their growth. This feedback loop can accelerate if Bitcoin adoption increases globally (which many foresee with events like future halving cycles or macroeconomic shifts). Thus, building on Bitcoin can be positioning oneself for a potential mass adoption wave where Bitcoin is the primary value rail worldwide. If such a scenario unfolds (however far-fetched it may seem to others), those who built the financial and application layers on Bitcoin early would be in a pole position to capture huge value. As an example, if stablecoins migrate to Bitcoin via protocols like Taro (Taproot Assets) on Lightning, then billions in daily settlement might flow through Bitcoin’s L2; companies with Bitcoin Lightning infrastructure (payments, liquidity provisioning, etc.) would see massive demand . In fact, Tether announced in 2025 that USDT would launch natively on Bitcoin’s Lightning Network, reflecting a belief that Lightning could be the “only scalable network for stablecoins long term” given its ability to handle high volume cheaply . If stablecoins and other assets do move to Bitcoin, the “enormous liquidity” of Bitcoin’s network will be unleashed into new use cases – a thesis many Bitcoin-focused VCs (like Trust Machines, Bitcoin Frontier Fund) tout when funding Bitcoin startups. To sum up, the economic case is betting that Bitcoin will remain the dominant value layer, so integrating with it is more valuable than chasing smaller ecosystems that could fade or get restricted.
• Community and Culture: The Bitcoin community is often described as resilient, principles-driven, and increasingly open to new ideas that don’t compromise Bitcoin’s core. After years of skepticism toward on-chain gimmicks, the success of things like Ordinals has “revived much of the conversation surrounding Bitcoin’s use cases and capabilities”, heralding what some call a new Bitcoin builder culture . Being part of this movement can be rewarding; there’s a sense of mission in “making Bitcoin the platform for everything” in a responsible way. Developers who once left for Ethereum are returning to explore Bitcoin’s new avenues . Aligning with Bitcoin can thus attract talent who believe in its vision and want to contribute to a more decentralized future on the firmest foundation. Also, Bitcoin’s culture values open source and public goods – there are many grants and programs (from organizations like Spiral, HRF, Brink, OpenSats, etc.) funding Bitcoin development. This support network can be helpful for early-stage projects that might not find the same altruistic backing on profit-driven chains. All in all, building on Bitcoin means joining the lineage of one of the most significant technological and social revolutions of our time, and many find that inherently meaningful.

In summary, the ideological/economic case for Bitcoin as a base layer rests on security, trust, liquidity, and principle. As the Stacks team concisely puts it: “Bitcoin is the most battle-tested and decentralized blockchain… the most familiar, adopted crypto asset… giving builders access to an enormous user base and untapped capital.” With Bitcoin’s design, “users and developers alike benefit from the properties that make Bitcoin so powerful and secure.” It’s not just about technical specs, but about which foundation you trust to undergird the future of decentralized applications. For many, that answer is Bitcoin.

Trends and Momentum in the Bitcoin Builder Ecosystem

In the past couple of years, there has been a clear uptick in developer activity and momentum centered on building applications for Bitcoin:

• Resurgence of Bitcoin Development (2023–2024): After a period where most innovation was happening on other chains, Bitcoin saw a surge of new interest starting in 2023. The catalyst was arguably Ordinals’ launch in January 2023, which suddenly made Bitcoin exciting for creators and developers. By mid-2023, tens of thousands of new Bitcoin NFTs and tokens were being created, and even through downturns in the wider crypto market, interest in Bitcoin Ordinals remained robust . Ordinal-related projects flourished: new wallets (Ordinals Wallet, Hiro’s ordinal support), marketplaces (Gamma, Magic Eden’s BTC integration), and infrastructure (indexers, Ordinal theory improvements). The data underscores this boom: from Dec 2022 to Mar 2024, 67.3 million inscriptions were made , and at points in 2023 inscription transactions comprised over 30% of Bitcoin’s transactions and consumed 15–20% of blockspace . Although this activity raised fees (which some users complained about), it demonstrated latent demand for Bitcoin blockspace when new use cases are enabled. Miners earned significant revenue from fees during Ordinals peaks, helping make the case that Bitcoin’s security budget post-block-subsidy could be supplemented by such demand. By late 2023, even as NFT volumes on Bitcoin cooled, a second wave of Ordinals activity picked up with BRC-20’s revival (e.g. Binance listed the ORDI token, sparking interest again ) and exploration of more efficient token protocols (like Taproot Assets (TARO) which moved towards mainnet by Q4 2023). The Ordinals phenomenon undeniably brought new builders – some who had been focused on Ethereum NFTs pivoted to Bitcoin, intrigued by the novelty of truly immutable on-chain art and the early-mover opportunities on BTC.
• Lightning Network Growth: The Lightning Network has continued its steady growth, accelerating in some metrics as major players join. In 2023, nation-state adoption (El Salvador’s Bitcoin rollout using Lightning) and integrations by companies like MicroStrategy (which started running Lightning services) kept Lightning in the news. By September 2023, estimates suggested between 280,000 to 1 million users/wallets had been active on Lightning – a wide range due to privacy (exact counts are hard), but clearly up from earlier years. Transaction counts on Lightning were growing exponentially: one source noted a 1212% growth in Lightning transaction volume over a 2-year span, reaching ~6.6 million transactions by mid-2023 (up from ~500k in 2021) . Another report by late 2025 indicated Lightning was handling 8+ million transactions per month . Perhaps even more telling, the capacity (total BTC in channels) kept hitting new all-time highs. After plateauing around 5,000 BTC in early 2023, capacity started climbing again and by December 2025 broke past 5,600 BTC . This was a significant milestone worth nearly half a billion USD, and it happened even while Bitcoin’s price was consolidating – indicating confidence in the network’s utility . A chunk of the recent capacity growth came from institutional adoption: exchanges like Binance and OKX, and financial services like Kraken, all funneled liquidity into Lightning channels to facilitate customer transactions . Coinbase’s integration (completed in 2025) quickly saw uptake, with 15% of its BTC withdrawals using Lightning within months . This institutional involvement is a game-changer – it means hundreds of millions of users now have indirect access to Lightning payments through services they already use. Moreover, new use cases like stablecoins over Lightning are on the horizon: the Taproot Assets protocol by Lightning Labs (launched on mainnet in October 2023) enables minting assets that can be sent via Lightning channels . In January 2025, Tether announced it would use this to bring USDT (the largest stablecoin) to Bitcoin’s Lightning Network , potentially marrying the liquidity of the $80B USDT market with Bitcoin’s infrastructure. If that succeeds, Lightning could become a backbone for global stablecoin transactions – a huge win for Bitcoin’s relevance in the broader fintech space. Lastly, the developer tooling for Lightning has matured: APIs and services (Voltage Cloud, Blockstream’s Greenlight, etc.) make running Lightning easier for apps, and standards like BOLT12 (for static QR codes and richer invoices) are in progress, smoothing user experience.
• Stacks and Smart Contract Layer Momentum: Stacks, as a Bitcoin-adjacent ecosystem, saw a renaissance in early 2023 largely due to Bitcoin’s rising tide. The STX token soared in value when Ordinals took off (nearly 5× in early 2023) as speculation grew around Bitcoin layers. More substantively, developers on Stacks pushed upgrades to strengthen Bitcoin integration: the Nakamoto release (scheduled in phases through 2023–2024) moves Stacks toward a more trustless BTC peg (via the upcoming sBTC) and transforms Stacks to be more like a Bitcoin “layer” rather than a separate chain . This includes faster Bitcoin block confirmation on Stacks and better integration of Bitcoin state into Clarity contracts. The anticipation of sBTC, which aims to allow a 1:1 BTC representation on Stacks without central custodians, has been high – it could effectively give Bitcoin a “wrapped BTC” on a smart contract platform that is secured by Bitcoin itself, which has been a kind of holy grail. In terms of DeFi on Stacks, metrics improved: the TVL, while modest, grew significantly (from $7M to $50M as noted ) and new projects launched (for example, Zest protocol for BTC lending using Stacks). Stacks was even recognized in some developer rankings as the #1 Web3 project on Bitcoin for two years in a row , reflecting its leadership in that niche. In 2024, Stacks underwent rebranding efforts to emphasize Bitcoin (the term “Bitcoin layer” is now front and center in their materials) and initiated grants and hackathons to lure Web3 devs into the Bitcoin realm. The Hiro developer tools for Stacks saw upgrades, and Clarity language improvements were in the works (Clarity 2.0+ aims for more features and possibly compiled smart contracts). All these indicate a steady momentum to grow the Bitcoin dApp ecosystem via Stacks. One caveat is regulatory: in mid-2023 the SEC’s actions caused some U.S. exchanges to delist STX (seeing it as potentially a security since it was one of few tokens with SEC-qualified status ironically). However, by late 2023, Stacks PBC clarified STX’s unique status and the ecosystem continued internationally. The community also increasingly markets Stacks as an open platform not tied to any single company.
• Rootstock and Others: RSK has had a slower build, but it’s carving out its niche. By 2024, Rootstock’s stats included 70,000 active addresses and 40+ protocols deployed . Its main DeFi apps (Sovryn, Tropykus, etc.) chug along with dedicated users. RSK’s parent company IOV Labs launched efforts like RIF (RSK Infrastructure Framework) for services like naming (RNS), messaging, and fiat ramp integrations to make the RSK network more usable. In 2023, there was also talk of a “Rootstock Light” on Lightning (a concept to use Lightning channels to peg in/out to RSK faster). Additionally, developer grants (up to $2.5M) have been offered to attract builders to RSK , and projects like DNA (Gasoline) tried making RSK transaction fees payable in BTC to improve UX. While RSK remains less popular than Stacks in terms of mindshare, it’s a stable presence and likely to benefit if Bitcoin DeFi attracts more attention. Another project, Liquid Network, saw some adoption by exchanges and OTC desks for rapid transfers, and in 2023 launched Liquid NFTs capability (though usage is limited due to the federation requirement). The Liquid community also developed a Lightning-Liquid bridge (enabling swapping L-BTC with BTC via atomic swaps), making it a piece of the broader Bitcoin layer puzzle.
• Drivechains & Other Proposals: In 2023, there was renewed discussion around BIP-300/301 Drivechains, which would allow Bitcoin miners to effectively run and secure multiple sidechains (each with its own rules, even enabling Ethereum-like functionality or other experiments) while keeping Bitcoin unchanged. This idea, championed by developer Paul Sztorc, gained some community attention with test networks and a push for activation. However, it also faced opposition (concerns about miner power and security). As of 2025, drivechains are not active on Bitcoin, but if they ever are, they could open a floodgate of “build on Bitcoin” possibilities (each drivechain could be a new playground tethered to Bitcoin). Similarly, covenant proposals like OP_CTV (CheckTemplateVerify) have been floated to enable advanced layer-2 constructions (like channel factories or vaults) more efficiently. These remain in limbo, but ongoing research and debate around them show the developer community’s hunger to extend Bitcoin’s capabilities carefully. Even the concept of Bitcoin “rollups” was explored – in 2023, a team demonstrated a proof-of-concept where a Rollup on Bitcoin (using Ethereum’s rollup code but anchoring to Bitcoin) could work for certain applications, albeit without modifications Bitcoin can only be a data availability layer to limited extent.
• Developer Metrics: While raw counts of developers are lower on Bitcoin, the experience level is high. By end of 2023, 80% of active Bitcoin developers were “experienced” (i.e. had 1+ year of contributing) , meaning churn is mostly among newbies. This suggests a solid core of Bitcoin-savvy engineers driving things forward. Bitcoin and Ethereum together consistently attract the bulk (around 40%+) of all crypto development activity , illustrating that despite the rise of many chains, Bitcoin hasn’t been abandoned at all. It retains a central place in the multi-chain universe, and indeed, many Ethereum developers are “multi-chain” and have started contributing to Bitcoin projects as well . Hackathons like Bitcoin++ and Bolt-a-Thon have been popping up, and conferences (Bitcoin Miami, etc.) now have entire tracks on Lightning and Layer 2 building. The Bitcoin Frontier Fund (formerly Stacks ventures) is funding dozens of startups aimed at Bitcoin use cases – from Lightning banking apps to Bitcoin-based creator platforms. Jack Dorsey’s company Block (formerly Square) remains a driving force: it’s building decentralized Bitcoin mining kits, a new developer-friendly Lightning wallet (codenamed “c=”), and even exploring a decentralized web platform (Web5) that uses Bitcoin and ION for identity and Lightning for monetization. In mid-2023, Block’s TBD group released Nostr’s Damus app and tipped that Bitcoin will be integral to Web5 infrastructure. Another momentum indicator: VC investment in Bitcoin-focused startups picked up, even as overall crypto VC cooled in 2022–2023. For example, Lightning Labs raised additional funding to work on Taproot Assets, and new funds like Ten31 and Trammell Venture partners explicitly target the Bitcoin ecosystem. This infusion of capital is enabling better user interfaces, marketing, and education around Bitcoin apps – areas where historically Bitcoin lagged.
• User Adoption Trends: On the user side, Bitcoin’s global adoption continues. For instance, by H1 2023, the total number of global crypto owners reached ~516 million, and Bitcoin users made up a significant portion of that . Bitcoin’s share of the crypto market rose to ~64% by mid-2025 , hinting that interest (and possibly trust) consolidated back towards Bitcoin after a turbulent 2022 (Terra collapse, FTX fraud, etc. that shook confidence in many alt ecosystems). Payment usage of Bitcoin via Lightning is also increasing: one payment processor (CoinGate) reported Lightning’s share of Bitcoin payments doubled from 2023 to mid-2024, reaching about 15% of all Bitcoin payments they processed . And as noted earlier, major retail integration is quietly underway – e.g. one fintech app (OnePay, backed by Walmart) in 2025 enabled Bitcoin purchases and Lightning behind the scenes for potentially 150M shoppers . All these hint at an inflection point where building on Bitcoin is not just a niche hobby but on the cusp of mainstream utility.

Looking at the big picture, the momentum is clearly there: Bitcoin is no longer just hodled – it’s being put to work. The ecosystem is “unlocking Bitcoin’s latent capital” via layers that let people do more with their BTC . The cultural narrative has shifted from “Bitcoin can’t do that” to “Bitcoin can do that – via Lightning/Stacks/RSK/etc.” There is optimism that this multi-layered Bitcoin stack approach is reaching critical mass. As Trust Machines’ CEO Muneeb Ali said in 2023, “Bitcoin layers and developments like Ordinals make one thing clear: Bitcoin is programmable, and creating the tools to make it so will help the network reach its full potential.” Sustaining this recent cultural and developer shift will be key. If successful, we could see an era where Bitcoin, the first blockchain, also becomes the most utilized in terms of aggregate activity across its layers – fulfilling the idea of “building everything on Bitcoin” in practice.

Conclusion

The concept of “building everything on Bitcoin” represents a melding of Bitcoin’s unparalleled strengths with new innovations that broaden its capabilities. Technically, Bitcoin provides the secure bedrock – a base layer renowned for decentralization, stability, and a sound monetary unit. On that foundation, a vibrant Layer-2 and sidechain landscape has emerged: the Lightning Network for fast payments, sidechains like RSK and federations like Liquid for smart contracts and asset issuance, and unique chains like Stacks that anchor to Bitcoin for Web3 functionality. Simultaneously, native Bitcoin protocols (Ordinals, BRC-20) have shown that even Bitcoin’s base layer can host tokens and NFTs when creative techniques are applied. Compared to smart contract platforms, Bitcoin’s approach may appear more complex – requiring layers, channels, and pegs – but it is guided by a philosophy of preserving the core while extending functionality at the edges. This has resulted in slower initial growth in Bitcoin’s app ecosystem, but recent trends indicate a significant acceleration.

Importantly, the movement to build on Bitcoin is fueled not just by technology, but by a belief in Bitcoin’s unique value proposition. Bitcoin offers unmatched security, predictability in monetary policy, regulatory clarity, and a massive existing network of value. Developers and users drawn to Bitcoin often cite the desire for a trust-minimized platform – one where they don’t need to worry about arbitrary changes or centralization creeping in. The resurgence of Bitcoin development in the past two years underscores a key realization: that Bitcoin’s network effects – its capital, its community, its credibility – are too significant to ignore. Rather than start from scratch, many projects are now finding ways to harness Bitcoin’s strengths to deliver new functionality. Whether it’s global remittances settling over Lightning, NFTs secured by Bitcoin’s permanence, DeFi that uses BTC as the primary collateral, or identities rooted in Bitcoin’s ledger, the ecosystem is increasingly rich.

Challenges remain: developer tooling on Bitcoin can improve further; some layer-2 solutions face centralization trade-offs that must be mitigated; and Bitcoin’s base layer will continue to evolve slowly, requiring patience and ingenuity from builders. Competition from other blockchains is still fierce – Ethereum, Solana, and others are not standing still. Yet, we see a convergence where even those ecosystems often seek to connect back to Bitcoin (e.g. wrapped BTC in Ethereum DeFi, or Bitcoin being used in Cosmos via bridges). Bitcoin sits at the center as a universal reserve asset of crypto, and building on Bitcoin aims to make it the universal reserve platform as well.

Recent data provides reasons for optimism: developer participation in Bitcoin scaling and applications is growing ; usage of Bitcoin layers (Lightning transactions, Stacks contracts, etc.) is at all-time highs; and a cultural renaissance is underway, with Bitcoiners embracing innovation to keep Bitcoin vibrant. In the long run, a fully realized Bitcoin ecosystem might see everything from banking to gaming running on Bitcoin-based rails, with users enjoying both the functionality they expect and the security/financial sovereignty Bitcoin provides. As one panel at a Bitcoin builders conference concluded: Bitcoin is gradually being seen “not simply as a store of value or peer-to-peer money, but as an ideal platform for building everything… from wallets to applications” . That vision, once just theoretical, is now coming to fruition – step by step, layer by layer – on Bitcoin.

Sources: This report draws on a variety of up-to-date sources to ensure accuracy and credibility. Key references include Fidelity Digital Assets’ analysis on Bitcoin layers and outlook , the Electric Capital 2023 Developer Report , industry blogs from Trust Machines and Antidote research on building on Bitcoin , data from academic and industry research on Ordinals , Lightning Network metrics from Mempool/Amboss (via MEXC and other reports) , and statements from Bitcoin builders themselves (e.g. Muneeb Ali’s summit remarks ). These and other sources are cited throughout (in the format 【source†lines】) to provide further reading and verification of the information presented.