Charles Hoskinson recently announced that Cardano will now pivot to become a Bitcoin Layer 2 solution.
This shift means that Cardano will work to enhance Bitcoin by adding features that Bitcoin currently lacks. Here is an article we wrote about how this will happen as a Layer 2.
What Does Layer 2 Mean?
To understand this shift, let’s break down what Layer 1 (L1) and Layer 2 (L2) mean. Layer 1 refers to the base blockchain network, like Bitcoin or Cardano itself. When we talk about Layer 2, we’re referring to a system built on top of Layer 1 to improve speed and functionality.
Romain Pellerin, the Chief Technology Officer (CTO) of Cardano, explained that this pivot will allow Cardano to give Bitcoin something it doesn’t have: smart contracts. They can be used for various things, like creating decentralized applications (dApps) and handling transactions without needing a middleman.
In Pellerin’s words, “Cardano will give Ordinals the smart contract capability that Bitcoin is missing.” Ordinals are a way to inscribe data onto Bitcoin, and by enabling smart contracts, Cardano aims to unlock new possibilities for using Bitcoin.
Cardano will give Ordinals the smart contract capability that Bitcoin is missing
It’s not that Cardano will switch from being a L1 to being a L2 of Bitcoin. It’s called UTXO-enabled interoperabilty between 2 L1s ❤️
Good click bait though 😆
— Romain Pellerin (@rom1_pellerin) October 28, 2024
Not a Complete Switch
It’s important to note that Cardano isn’t entirely switching from being an L1 to an L2. Instead, they’re creating what’s called “UTXO-enabled interoperability.” This means that Cardano will work alongside Bitcoin, allowing both networks to benefit from each other’s strengths. By doing this, Cardano hopes to create a more seamless experience for users while boosting Bitcoin’s capabilities.
🚨 BREAKING: The founder of Cardano, Charles Hoskinson ,just reversed his stance on Bitcoin and announced that Cardano L1 is pivoting to become a Bitcoin L2 🚀 pic.twitter.com/UCpGnvMHMt
— Ordinal News 🟠 (@Ordinal_News) October 29, 2024
Bitcoin has always been seen as the king of digital currencies, but it has its limitations. By integrating Cardano’s advanced features, Bitcoin could become more versatile and user-friendly. This could attract more developers and users, making the whole crypto space more vibrant and diverse.
Disclaimer
The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment, and informational purposes only. Any information or strategies are thoughts and opinions relevant to the accepted levels of risk tolerance of the writer/reviewers and their risk tolerance may be different than yours. We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments so please do your due diligence. Copyright Altcoin Buzz Pte Ltd.
