Biggest Opportunities in Bitcoin (as a founder)

This is a question I get often from founders. Where should I build?

"Ethereum is still the place to be, right? Or the influence is waning and I should invest my time in rising Solana? But Bitcoin IS the king crypto and everyone is talking about Ordinals. What should I do?"
- Indecisive Johnny

You should build on Bitcoin.

Just kidding. I'm not that dogmatic. Not everything belongs on Bitcoin. I also pay zero attention to other ecosystems, so I can't speak with any valid perspective there. You need to do some soul-searching on why an ecosystem makes sense for what you're building.

That said, here's 3 reasons why Bitcoin is a great place to build right now:
1) It's the largest asset by 3x the nearest competitor (and most of that is dormant)
2) There's huge interest from investors
3) The tooling to build on Bitcoin is getting better by the week

If you've made it past this divider. You've made the smart decision that Bitcoin is the place you want to build. But the question isn't that easy. Unlike Ethereum, you don't get to simply learn Solidity and install Metamask and you're good up and down the stack. Within the Bitcoin ecosystem, there is a bunch of pockets to build with entirely different dev experiences and functionality.

The L1, Ordinals, DLCs, Lightning, Rootstock, Liquid, Stacks, and RGB are just a few of the names you'll hear. Not including the meta-protocols and rollups starting to pop up.

Let's break down the best places to build over 3 criteria:

• Where investors are looking right now?
• Where users are at?
• What has the most functionality?

The Bitcoin Base Layer
The base Bitcoin L1 layer is the best place to build right now. It has the most investor interest, massive wallet support and a huge userbase. Unlocking the mostly dormant $700+ billion in BTC with compelling new uses is the biggest opportunity in crypto. The issue is how limited the scripting language is on the L1. There are 100x more things that can't be built on the L1 than can.
To be at the bleeding edge of base layer functionality, you should look at Taproot, Tapscript, Miniscript, and DLC's.

Investors: 4/5
Users: 5/5
Functionality: 2/5

Ordinals
Building on top of Ordinals is a great option to build on. This meta-protocol on top of Bitcoin launched just under a year ago and the design space of features this unlocks is still wide open. It gives you much more flexibility to build applications compared to the L1, you can use Bitcoin blockspace in interesting ways, users from other ecosystems have flocked to Ordinals, infrastructure is rapidly improving here, 4 major wallets support Ordinals (with more coming), and investors are keeping a close eye on this area.

Investors: 4/5
Users: 4/5
Functionality: 3/5

The Lightning Network (and Taproot Assets)
Lightning is going through growing pains as they solve problems operating in a sustained high-fee environment. That said if you believe, as I do, that these problems will find solutions. Lightning is an excellent place to build. It has seen 1200% growth in the past 2 years, it's uniquely positioned to handle low-value micropayments (half the network transactions are less than $.30 cents), and it has great wallet support which brings massive potential users. There's also development ongoing to support Taproot and DLCs over Lightning. It is a P2P network so it doesn't have global state. Keep that in mind when deciding.

Investors: 4/5
Users: 4/5
Functionality: 3/5

Blockchain L2's (Rootstock, Liquid, Stacks, RGB, and more)
These are decent places to build new use cases for Bitcoin. They bring more full-featured smart contract languages and faster block times. This allows you to deploy BTC the asset in applications that mimic any functionality on other crypto chains. The biggest risk here is users haven't moved in big numbers to these chains and investors are cautious on these chains accordingly.

• Stacks has the biggest developer, user, and application base, but doesn't currently have BTC on the chain (Update coming soon).
• Rootstock is EVM-compatible and has the current biggest TVL for DeFi.
• Liquid closely matches Bitcoin core and has covenants activated (which is the most discussed next upgrade for Bitcoin Core). This can be a good place to experiment and front-run future upgrades to Bitcoin, users have not moved to Liquid in any meaningful way.
• RGB has been in development for years and now starting to reach production level. It has a promising future but building here will put you at the bleeding edge (with all the associated risks)

Investors: 2/5
Users: 2/5
Functionality: 5/5

Rollups
This area is too early to build anything meaningful. Most development right now is happening at the protocol development level and none are production-ready yet. Many of the current options in the works are EVM compatible, so building with Solidity gives you an advantage here when the time comes.
Options to watch: Chainway, ZeroSync, RollKit, Bison Labs.

Investors: 1/5
Users: 0/5
Functionality: 4/5

This is a rough overview of the Bitcoin ecosystem landscape as it stands right now at the end of 2023. It's a very nuanced topic and every application has different needs.

If you want to discuss what you are working on more in-depth.
Reach out to me on Twitter or e-mail.

Keep Building,
Jake.