Bitcoin, widely recognized as a store of value on a global scale, is set to evolve as a new Bitcoin-backed network emerges, challenging the SEC’s notion that Bitcoin lacks its own ecosystem and therefore is not a security. Conflux, announcing an Ethereum Virtual Machine (EVM) compatible Bitcoin Layer 2 solution, has seen its token price surge. This Layer 2 will utilize Bitcoin for transaction fees and allow various assets to be bridged from Bitcoin.
The upcoming solution aims to enhance the security provided by Bitcoin miners for third-party smart contracts. It is anticipated to be heavily utilized in the Real World Asset (RWA) space, especially since Bitcoin is now officially recognized as an asset class by the U.S.
The Proof of Stake (PoS) consensus protocol is set to increase reliability through Bitcoin staking. A testnet launch is expected within the next two months, with a mainnet launch projected for May 2024.
EVM compatibility is a crucial aspect of this development, enabling protocols currently operating on the Ethereum Virtual Machine to easily transition to this new platform.
This innovation marks a significant shift in the Bitcoin ecosystem, introducing the integration of smart contracts and expanding Bitcoin’s functionality beyond just a value storage mechanism.