In this second installment of our "Bitcoin Renaissance" series, FCAT’s blockchain analysts explore the surge in Bitcoin developer activity prompted by ordinals and new technologies — examining the emerging use cases and innovations that are enhancing the protocol's functionality, scalability, and utility.
As an asset, Bitcoin has prompted widespread research and continues to gain adoption globally. However, the Bitcoin network and its respective development community are of equal or even greater importance.
Just as successful Formula 1 drivers rely on pit crews to fine-tune cars, make strategic adjustments, and ensure optimal performance behind the scenes, the Bitcoin ecosystem's success reflects more than market value or popularity. Under the hood, developers, miners, and node operators work tirelessly to ensure the security, scalability, and functionality of the Bitcoin network. While the driver may be the one taking the checkered flag, they need an entire team to get them to the finish line.
Similarly, contributors to the Bitcoin network are often-overlooked, unsung heroes who enable the asset to reach its full potential. To use the earlier metaphor, this paper is not for or about the driver but rather the car and the teams who built it.
The 2023 introduction of ordinals and BitVM ignited innovation across the Bitcoin network. This new wave of development was dubbed the “Bitcoin Renaissance” and reflects a definitive transformation of the protocol's underlying functionality and future scalability. This movement has sparked a surge in developer activity and a greater focus on enhancing utility—which, as a result, has caused Bitcoin to evolve rapidly and led to a proliferation of new use cases.
At the heart of this revolution is BitVM, a game-changing technology that enables oV-chain computations to be verified on-chain. This breakthrough has the potential to unlock more complex decentralized applications and use cases on the Bitcoin network. Meanwhile, support for a softfork enabling covenants is gaining traction, promising to enable more flexible transactions and improved smart contract capabilities.
While investor interest in bitcoin as a store of value asset has continued to grow globally, developers are working diligently behind the scenes to ensure the network can scalably and securely support that potential growth.
Want to learn more? The Bitcoin Renaissance is in full swing—read the report to stay ahead of the curve and dive into the latest developments, expert insights, and in-depth analysis driving the future of Bitcoin.
References & Disclaimers
Digital assets are speculative and highly volatile, can become illiquid at any time, and are only for those investors willing to risk losing some or all of their investment and who have the experience and ability to evaluate the risks and merits of an investment.
This information is for informational purposes only and is not intended to provide investment or any other advice and should not be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any security or other assets. The opinions provided are those of the authors and not necessarily those of Fidelity Investments or its affiliates. Fidelity does not assume any duty to update any of the information. Fidelity and any other third parties are independent entities and not affiliated. Mentioning them does not suggest a recommendation or endorsement by Fidelity.
The following is excerpted from an interview with Apolline Blandin, Research Affiliate of Cryptocurrency and Blockchain at the Cambridge Centre for Alternative Finance (CCAF). The findings from Apolline’s research on the Bitcoin mining industry were published in the 3rd Global Cryptoasset Benchmarking Study in 2020. In this interview Apolline discusses some of the most important trends in Bitcoin mining including cost structure and hashrate dispersion across geographies, use of renewable energy sources, and treasury management strategies. The interviewer is FCAT’s Brian Wright, senior manager of Bitcoin mining.
The following is excerpted from an interview with Whit Gibbs, the Founder & CEO of Compass Mining. Compass recently authored the North American Mining Index. In this interview, Gibbs provides unique insights into the topical issues facing the US mining industry including the effects of the mass exodus of Chinese miners in mid-2021 as well as an industry-wide shift to sustainable mining solutions. The interviewer is FCAT’s Kevin Kelly, business analyst of Bitcoin mining.
The following is excerpted from an interview with Jameson Lopp, a bitcoin engineer and the CTO of a crypto start-up, Casa. In this interview, Jameson discusses some of the trends seen in custodial and non-custodial wallets and talks about ways to manage coins without the aid of an intermediary. The interviewer is Parth Gargava, a senior software engineer in FCAT’s blockchain incubator.
