3 of these will drive Ethereum and Bitcoin in the next bull market

After 2021, we have entered cryptocurrency where people stop talking about financial decentralization and start discussing the tokenization of everything.

This shift represents a critical outlook that is set to guide three points for the upcoming bull market. To fully understand these points, it is important to understand that everything is information. Money is data. Your engagement with a brand is data. Your credentials are data. The ticket to your favorite show is data.

Starting in 2021, the ecosystem will increasingly store a large part of this data in the form of token tokens, NFTs and timestamps on the blockchain, which serves as a data store in this context.

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While not all data needs to be on the blockchain, the ability to store data on the blockchain will change how we store, share, and use automated and secure instructions and transactions.

Re: Non-Financial Blockchain Use Cases. pic.twitter.com/lYZFprXAry

— vitalik.eth (@VitalikButerin) May 27, 2022

And this prospect of tokenizing everything seems to be coming to Bitcoin. This gives the first concept.

Standard and uniform protocols will continue to evolve, and Bitcoin will become a network of multiple assets (or multiple data types).

In the year In January 2023, Casey Rodamore officially released the Ordinal Protocol, which in short allows any file type to be permanently inserted into the Bitcoin blockchain.

In less than a year, the community has experimented with music, artwork, journalistic articles and video games being recorded on the world's leading blockchain.

The Ordinals protocol was not the first to allow this, but it has received considerable attention. And everything points to this unquenchable flame.

More than a technical protocol, a culture and mindset has developed where many developers see Bitcoin as a canvas for the creation of other projects and applications, and nothing can stop the well-established cultural movements.

But remember: everything should not be placed 100% on the chain, because this is expensive and ineffective for some applications.

So protocols like Taproot Assets – which allow other assets to be created – on the Bitcoin network but in a way that allows most of the information to be off-chain will be important.

Speaking of storage costs on Layer-1 blockchains, it looks like Layer-2 blockchains are set to shine.

Crypto will come out of the bubble and finally reach the everyday person through Layer-2 blockchains

Those who were active during the bull market of 2021 will recall that around $50 was the norm for a transaction fee on Ethereum, while other NFTs such as Yuga Labs were developed by Yuga Labs where users paid up to six Ether (ETH). ) per transaction.

It's simple, if the blockchain is invisible, it doesn't reach the core. And expensive and slow transactions make blockchain highly visible.

That's why Layer-2 blockchains — designed to scale Layer-1 blockchains — will be so critical to the next bull market.

Although they had been around for years, neither they nor the market was ripe for building on them in the last cycle. On the one hand, many companies and developers don't believe that layer-2s are stable enough to handle high flows from the core. On the other hand, it was also a matter of people doing things without studying or understanding much.

The number of unnecessary projects on Ethereum was very important, and the reasons were different: it was traditional, because some companies did not even know what the secondary layers were, or simply because everyone was building on Ethereum.

Now, with the lessons learned and the stability with the bear market, the mindset of building is more mature and the ‘jobs' of blockchain are more clear to those building. .

And the cherry on top will be the implementation of EIP-4844, which is expected to happen on the Ethereum network in a few months, and will further reduce the transaction costs of the layer-2 network, making it more invisible and stronger to attract. And retain a core audience.

But the infrastructure is worthless if people can't connect to it and if companies can't build it, it's invisible. However, the solution is already here!

Abstract solutions will be the primary entry and retention mechanism for consumers and large traditional companies on the Web3.

The biggest issue is that the tokenism of everything is that in some cases decentralization is more of a hindrance than a help.

If the topic is the protection of Bitcoin (BTC), the topic of decentralization is appropriate. However, when the subject changes to tokenized tickets or proofs of company loyalty, the value does not lie in the decentralization of the system. So, simplifying the user experience by removing complex processes — such as creating a partial wallet with social login or eliminating worries about gas bills — makes general sense and is important.

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Abstract solutions were the missing bridge so that the crypto universe would not remain a technical environment only for the technically skilled people willing to face various challenges and complex journeys. But now they are ready to shine!

And it's not about stopping decentralization, it's about finding an alternative. Those who want to remain 100% decentralized can do so, but currently have no choice. In this way, it avoids the crypto ecosystem from dying in the famous innovation abyss. Impressive infrastructure is pointless if people can't easily connect and navigate it in everyday life.

What is not often discussed is how important these abstraction solutions are for traditional companies to effectively integrate Web3. How many companies currently have a team of developers who can program in blockchain languages ​​like Solidity? Making it easy for developers to get started is also critical.

Dividing blockchain's journey to the mainstream into four stages, we can say that the label's abstract solutions, together with the advances mentioned in thesis two, will move Web3 into its final phase – with improved infrastructure, a few technical developers and brands joining the game. And the number of applications, projects, and use cases will multiply, attracting major attention.

As of today, it looks like blockchains will increasingly be seen as major platforms for multi-asset communication and as currencies in the next market cycle. The crown jewel will be elasticity, making the layers more invisible and easier for users to navigate and businesses to integrate. Welcome to Ethereum and Bitcoin Level 2.

This article is not intended for general information purposes and should not be construed as legal or investment advice. The views, ideas and opinions expressed herein are solely those of the author and do not necessarily represent the views and opinions of Cointelegraph.