Bitcoin Needs More Layer-2 Networks Than Ethereum – Merlin Chain Founder

Bitcoin decentralized finance (DeFi), or BTCFi, a new movement that seeks to bring DeFi to the Bitcoin network, has grown in popularity since the introduction of Ordinals and BRC-20 tokens. In episode 47 of Cointelegraph's Hashing It Out podcast, Jeff Merlin, founder of the Bitcoin Layer-2 network – the native Bitcoin Layer-2 network – explains how BTCFi's activity is evolving from BRC-20 to BRC-420, the issues faced by Layer-2 networks and Bitcoin (BTC) and why. Adding a building resource to the network is energy for the entire ecosystem.

Jeff outlines the differences between BRC-420 and BRC-20, where BRC-20 allows developers to create mint tokens, while BRC-420 is a modified data and alternate module. The artist cited an example of how he uses the BRC-420 to stream an album on a chain.

Jeff says that an artist can write five songs separately and then use the BRC-420 to put all the songs together as a single piece. The artist can then promote the album to multiple shares, allowing fans to purchase the album on the chain.

Jeff added that layer-2 networks are more important to Bitcoin than Ethereum because they provide use cases for the Bitcoin ecosystem that cannot be built on layer-1, unlike Ethereum, which hosts most innovations built on layer-2 networks. It highlights the inability to deploy smart contracts on the Bitcoin network without building Layer 2, which is not the case for Ethereum.

The founder of Merlin Chain pointed out that most Bitcoin layer-2 platforms are not building ecosystems that support the specific needs of the Bitcoin community, which is involved with other innovations already built on the network. Instead, they are simply taking concepts from Ethereum Layer-2s and bringing them back to make it difficult to please the community.

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