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How Bitcoin Is Changing Finance

July 10, 2024
CryptoMoneyUpdate


For the past fourteen years, Bitcoin has had one job—money.
Scarce, decentralized, and out of the central banks’ control, Bitcoin’s
monetary properties made it an elite alternative to conventional currency.
Bitcoin’s role as a store of value and, to a lesser extent, a medium of
exchange drove the asset from a cypherpunk curiosity to trillions of dollars.

However, 2023 marked a pivotal shift in Bitcoin’s journey.
Enter Casey Rodarmor and the introduction of Ordinals, a breakthrough allowing
Bitcoin holders to inscribe specific satoshis—each Bitcoin can be divided into
100 million satoshis, and now, each satoshi can reference unique data. Soon
someone else built on Ordinals theory to inscribe token balances on individual
sats, and a token economy on Bitcoin was born.

Building on this foundation, Rodarmor unveiled the Runes
protocol this year. Runes offers a cheaper, leaner, and more efficient method
for creating tokens directly on Bitcoin, without the need for off-chain data.
Bitcoin has crossed over from being a “boring rock” to a multi-functional home
for meme coins, stablecoins, utility tokens, and other asset types.

Currently, the most visible application of Runes and BRC-20
tokens is speculative, with meme coins like DOG TO THE MOON, ORDI, and SATS capturing attention. While these meme coins may seem frivolous or fleeting, they
represent the early stages of a broader evolution.

One of the most exciting potential applications of Bitcoin
tokens lies in the tokenization of real-world assets (RWA). This sector,
encompassing hundreds of trillions of dollars in value, includes stocks, bonds,
real estate, and private credit.

The advantages of tokenizing these assets on a
blockchain are manifold: 24/7 trading, unparalleled transparency, and seamless
peer-to-peer transactions. Despite these benefits, only $10 billion worth of
RWAs are currently tokenized, and this is primarily across chains like
Ethereum, Polygon, and Stellar.

Real-World Assets

The journey for RWAs and Bitcoin tokens is still in its
early stages. Tokenized RWAs face significant regulatory hurdles and
uncertainty, while Bitcoin tokens remain technically complex and
user-unfriendly. Yet, these challenges are not insurmountable. They are the
growing pains of an ecosystem on the brink of maturity.

Long-term, the question arises: where better to tokenize
your assets than on the most robust, liquid, and time-tested blockchain in
existence? Bitcoin, with its unparalleled security and resilience, stands head
and shoulders above other blockchains.

If you are tokenizing legacy
assets—assets that are expected to endure for decades—you want to ensure the
underlying blockchain will remain viable for just as long. Bitcoin, with its
impeccable track record and ingrained trust, offers that assurance.

Moreover, Bitcoin’s network effect and liquidity make it the
ideal candidate for housing the trillions of dollars worth of tokenized RWAs.
The network effect is a powerful phenomenon; as more participants join and use
Bitcoin, its utility and value grow exponentially. This dynamic creates a
virtuous cycle, further solidifying Bitcoin’s position as the premier
blockchain for serious, long-term financial applications.

A Blockchain for Financial Applications

The implications of this shift are profound. Imagine a world
where the stock market never closes, where real estate transactions are as
simple as sending an email, and where bonds can be traded globally, 24/7, with
complete transparency and security. This is not a distant dream but an imminent
reality that Bitcoin is uniquely positioned to deliver.

As we navigate the noise and volatility of the present, it
is crucial to keep our eyes on the horizon. The future of finance is being
built today, brick by digital brick, on the Bitcoin blockchain. The path may be
challenging and the journey complex, but the destination promises to redefine
the financial landscape in ways we are only beginning to comprehend.

In conclusion, while the market’s ups and downs may capture
headlines, they are mere footnotes in the larger narrative. The stock, real
estate, and bond markets of the future will be on Bitcoin, ushering in an era
of unprecedented efficiency, transparency, and accessibility. It is time to
look beyond the noise and embrace the transformative potential that lies ahead.

For the past fourteen years, Bitcoin has had one job—money.
Scarce, decentralized, and out of the central banks’ control, Bitcoin’s
monetary properties made it an elite alternative to conventional currency.
Bitcoin’s role as a store of value and, to a lesser extent, a medium of
exchange drove the asset from a cypherpunk curiosity to trillions of dollars.

However, 2023 marked a pivotal shift in Bitcoin’s journey.
Enter Casey Rodarmor and the introduction of Ordinals, a breakthrough allowing
Bitcoin holders to inscribe specific satoshis—each Bitcoin can be divided into
100 million satoshis, and now, each satoshi can reference unique data. Soon
someone else built on Ordinals theory to inscribe token balances on individual
sats, and a token economy on Bitcoin was born.

Building on this foundation, Rodarmor unveiled the Runes
protocol this year. Runes offers a cheaper, leaner, and more efficient method
for creating tokens directly on Bitcoin, without the need for off-chain data.
Bitcoin has crossed over from being a “boring rock” to a multi-functional home
for meme coins, stablecoins, utility tokens, and other asset types.

Currently, the most visible application of Runes and BRC-20
tokens is speculative, with meme coins like DOG TO THE MOON, ORDI, and SATS capturing attention. While these meme coins may seem frivolous or fleeting, they
represent the early stages of a broader evolution.

One of the most exciting potential applications of Bitcoin
tokens lies in the tokenization of real-world assets (RWA). This sector,
encompassing hundreds of trillions of dollars in value, includes stocks, bonds,
real estate, and private credit.

The advantages of tokenizing these assets on a
blockchain are manifold: 24/7 trading, unparalleled transparency, and seamless
peer-to-peer transactions. Despite these benefits, only $10 billion worth of
RWAs are currently tokenized, and this is primarily across chains like
Ethereum, Polygon, and Stellar.

Real-World Assets

The journey for RWAs and Bitcoin tokens is still in its
early stages. Tokenized RWAs face significant regulatory hurdles and
uncertainty, while Bitcoin tokens remain technically complex and
user-unfriendly. Yet, these challenges are not insurmountable. They are the
growing pains of an ecosystem on the brink of maturity.

Long-term, the question arises: where better to tokenize
your assets than on the most robust, liquid, and time-tested blockchain in
existence? Bitcoin, with its unparalleled security and resilience, stands head
and shoulders above other blockchains.

If you are tokenizing legacy
assets—assets that are expected to endure for decades—you want to ensure the
underlying blockchain will remain viable for just as long. Bitcoin, with its
impeccable track record and ingrained trust, offers that assurance.

Moreover, Bitcoin’s network effect and liquidity make it the
ideal candidate for housing the trillions of dollars worth of tokenized RWAs.
The network effect is a powerful phenomenon; as more participants join and use
Bitcoin, its utility and value grow exponentially. This dynamic creates a
virtuous cycle, further solidifying Bitcoin’s position as the premier
blockchain for serious, long-term financial applications.

A Blockchain for Financial Applications

The implications of this shift are profound. Imagine a world
where the stock market never closes, where real estate transactions are as
simple as sending an email, and where bonds can be traded globally, 24/7, with
complete transparency and security. This is not a distant dream but an imminent
reality that Bitcoin is uniquely positioned to deliver.

As we navigate the noise and volatility of the present, it
is crucial to keep our eyes on the horizon. The future of finance is being
built today, brick by digital brick, on the Bitcoin blockchain. The path may be
challenging and the journey complex, but the destination promises to redefine
the financial landscape in ways we are only beginning to comprehend.

In conclusion, while the market’s ups and downs may capture
headlines, they are mere footnotes in the larger narrative. The stock, real
estate, and bond markets of the future will be on Bitcoin, ushering in an era
of unprecedented efficiency, transparency, and accessibility. It is time to
look beyond the noise and embrace the transformative potential that lies ahead.





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