Jack Dorsey, the founder of Twitter, recently asserted in an interview on the 21 in 21 podcast with Haley Berkoe, that the Bitcoin community ought to prioritize scaling payments to stay relevant. “I think it has to be payments for [Bitcoin] to be relevant on the everyday,” he said.
However, as an individual deeply entrenched in the Bitcoin ecosystem, working alongside Bitcoin developers, market-makers, and investors, I fundamentally disagree with the notion that payments are the primary avenue for Bitcoin adoption.
The most effective strategy to elevate Bitcoin’s relevance is to develop additional utilities for everyday users that extend beyond selling or sending it away – a concept commonly referred to in the Bitcoin community as “hodling”. This is particularly pertinent in the corporate world, where an effective strategy includes more than merely holding BTC on a balance sheet.
Bitcoin is a generational asset. It is essential to understand that most holders do not plan to sell, hence the focus should be on maintaining a healthy chain. As the rewards for miners decrease with each halving cycle, finding sustainable incentives for them will become a significant part of the Bitcoin conversation over the next decade. Scaling activity to Layer 2s, like Stacks, can introduce smart contract functionality to the ecosystem without compromising the base layer, thereby creating more opportunities than just scaling payments.
By 2025, Bitcoin has cemented itself as “digital gold”. Individuals, institutions, and even countries hold it as a safe-haven reserve investment. This trend does not suggest a future as a payment vehicle; instead, it presents an opportunity for Bitcoin users to participate in Bitcoin Decentralized Finance (DeFi) and make BTC a productive asset.
A recent Binance research report noted that only approximately 0.8% of bitcoin is currently used in DeFi. Therefore, there is almost $1 trillion in untapped on-chain value if we can build a compelling case for Bitcoin development.
Bitcoin’s primary strength lies in its security, decentralization, and finite supply. Given these attributes, why would anyone use their BTC as a means of payment? Through DeFi protocols, users can bridge their bitcoin to an L2 and borrow stablecoins. Since most consider BTC as generational wealth, it becomes optimal collateral. DeFi enables the use of digital assets for payment while keeping your BTC securely stored on the Bitcoin blockchain, thus unlocking BTC as the most pristine form of collateral.
I concur with Dorsey when he stated that Bitcoin would not succeed if it “fails to be relevant to people on a daily basis.” However, we can foster enduring relevance by empowering people to accomplish more on-chain through Bitcoin DeFi.
Developers working on platforms that expand Bitcoin’s functionality, enabling lending, borrowing, and other financial services without compromising its security, will emerge as the new leaders in this sector. By leveraging these L2s, we could see people creating savings accounts filled with bitcoin, earning yield in bitcoin, taking out loans against their bitcoin, and all these actions will be facilitated by the scalable L2s.
Bitcoin can maintain its role as a generational wealth asset or a store of value against inflation, while simultaneously being an active asset across a dynamic financial ecosystem.
The real utility lies in generating opportunities to do more, not in using BTC for your morning coffee purchase.
