Why the Best Developers Skip Bitcoin and Build in Other Ecosystems (And How That’s Changing)

Bitcoin has been the most secure and decentralized blockchain among all existing blockchains. This is largely because it was the first blockchain, pioneering the culture we see in the crypto industry today. However, when it comes to developer interest, Bitcoin often gets overshadowed by other blockchains that are more developer-friendly, such as Ethereum, Solana, Avalanche, etc.

Why is that? It comes down to Bitcoin’s design. When Satoshi Nakamoto created the first implementation of the Bitcoin client, the primary purpose was to serve as a peer-to-peer (P2P) electronic cash system—not as a platform for building dapps like decentralized exchanges or lending protocol.

In recent years, this narrative has been shifting with the rise of Bitcoin L2s which increase transaction throughput and introduce programmable layer native to Bitcoin. We’ll learn about this change, but first, let’s understand issues that prevented it from happening for so long.

Bitcoin’s Limited Scalability & Expressivity

Satoshi’s vision for Bitcoin was to create peer-to-peer (P2P) electronic cash system capable of competing with networks like Visa. That’s the system he designed and it was capable of achieving this goal when it was first created.

“The existing Visa credit card network processes about 15 million Internet purchases per day worldwide. Bitcoin can already scale much larger than that with existing hardware for a fraction of the cost.” - Satoshi Nakamoto (Bitcoin Talks)

Fifteen years after Bitcoin’s launch, it has evolved from the peer-to-peer electronic cash system envisioned by Satoshi to primarily serving as a store of value. This shift in narrative has left Bitcoin trailing behind newer blockchains in terms of transaction throughput and on-chain expressivity.

Bitcoin is relatively slow compared to other chains, with transaction confirmations taking around 10 minutes, while networks like Ethereum and Solana confirm transactions in just a few seconds. Additionally, Bitcoin has a block size limit of 4MB, restricting how many transactions can be included in a single block. These slow confirmation times and limited block size hinder the scalability of the network.

In terms of programmability, Bitcoin uses a simple scripting language called Script, which allows developers to create basic applications like multi-sigs and timelocks. However, Script is not Turing-complete, meaning it limits the complexity and expressivity of programs that can be written. This restricts the creation of more advanced applications like decentralized exchanges or lending protocols. Beyond technical limitations, Script also lacks comprehensive tutorials and development tools, which further hinders developers trying to work with it.

The issues discussed so far are related to Bitcoin’s base layer (Layer 1), but many of these problems can be addressed through Bitcoin Layer 2 solutions. Let’s see how Bitcoin L2s are emerging to solve these scalability and programmability challenges, expanding Bitcoin's expressivity.

The Solution: Bitcoin L2s

We’ve seen the current issues with Bitcoin’s base layer. Modifying the base layer is challenging today because the network is too large, and it requires the consensus of the majority to accept any new changes. The solution to this problem is Bitcoin Layer 2 (L2) solutions.

Bitcoin L2s provide a trust-minimized network that inherits the security of Bitcoin, making them an excellent solution. These L2s address two major problems of the base layer: scalability and expressivity.

Bitcoin L2s can be categorized into three types: state channels, sidechains, and rollups. While we’ll explore each of these, it's important to note that not all of them solve both problems. State channels allow users to transact off-chain and then post the results on-chain. This addresses only the scalability issue by increasing the network’s transaction throughput to thousands, if not millions.

Sidechains and rollups are more comprehensive solutions, as they tackle both scalability and expressivity. They also allow developers to use virtual machine (VM), such as EVM or SVM. However, the security implications of these solutions differ. Rollups inherit security from the base layer, while sidechains may not, as they are independent chains with their own validator sets. For a better understanding of the implications, you should read more about sidechains vs. rollups.

With the introduction of many new Bitcoin L2s, challenges like liquidity fragmentation and fee spikes during network congestion have emerged. Surge, a composable metalayer, provides a programmable environment for L2s, leveraging Bitcoin’s security model and zero-knowledge cryptography to solve these problems. Learn more about Surge with our Litepaper.

Developer Momentum

Users are showing more interest in Bitcoin L2s, but what about developers? Developer activity on Bitcoin L2s is growing quickly, thanks to more funding and new projects. A big reason for this is that many Bitcoin L2s now use EVM as their virtual machine. This makes it easier for developers who already know Solidity to start building on Bitcoin since EVM has great tools and resources.

Here are some stats about developer activity on Bitcoin L2s:

• BoB now has almost 40,000 contracts deployed on its mainnet.

• Stacks is seeing a 30% monthly growth in smart contract deployments.

These Bitcoin L2s have been around for a while, but they are still relatively new compared to Bitcoin. Despite this, there is growing interest from developers in these projects. According to the Electric Capital survey, developer interest in Bitcoin L2s and scaling solutions has been increasing, reaching 40% in 2023.

Alongside developers, VCs are also showing strong interest in the Bitcoin L2 ecosystem, funding developers to build these solutions. Bitcoin L2s have seen a sevenfold increase, from 10 projects in 2021 to 75 in 2024. Moreover, over 36% of funding has been allocated to Bitcoin L2s in 2024

The Future of Bitcoin Layer2s

Bitcoin is evolving beyond being just a store of value and is becoming a platform for building innovative on-chain applications. This shift is powered by Bitcoin L2s, which bring improvements in scalability and on-chain expressivity.

Exciting developments are underway to push this transformation further. Features like the reintroduction of OP_CAT and a programmable layer with BitVM are set to expand what’s possible on Bitcoin. These advancements will help overcome current limitations, making Bitcoin and its L2s more appealing to developers.

While today’s Bitcoin L2s might not fully meet the expectations of developers or users, ongoing improvements will soon make them more accessible and practical. This evolution might move us away from Satoshi’s original vision of peer-to-peer electronic cash, but it’s paving the way for a more versatile Bitcoin.