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CoinFabrik’s Takeaways from Bitcoin Unleashed 2023

Bitcoin’s resilience and growth are evident across various cycles. But lately, the conversation has evolved from solely championing Bitcoin’s dominance to considering its diverse roles and opportunities within the cryptoeconomy, thereby unlocking new potential for expansion.

Bitcoin Unleashed took place in London on October 19 and 20, and it brought together key players in the Bitcoin space—from developers to investors—to tackle pressing issues and explore new opportunities. The event, organized by the Stacks Foundation, covered everything from technical workshops and live demos to in-depth discussions on DeFi, L2s, Ordinals and regulation. And if that wasn’t enough, it wrapped up with a hands-on hackathon. Simply put, if you wanted to catch a glimpse of Bitcoin’s evolving narrative to understand where it’s headed, Bitcoin Unleashed was the place to be.

In line with this spirit of innovation, and having contributed to the Stacks ecosystem through multiple security audits, CoinFabrik has had the privilege of taking part in the event and reinforcing our commitment to a secure and robust decentralized future. Here are our takeaways from Bitcoin Unleashed.

Building Bitcoin L2s: The Stacks Foundation is Focused on Innovation

Muneeb Ali, founder of Stacks and CEO of Trust Machines, opened Bitcoin Unleashed by discussing the importance of Layer 2 solutions, commonly known as L2s, for Bitcoin.

Muneeb says “Bitcoin L2s are the single most important thing that we have to work on to grow Bitcoin” and that we should “separate BTC, the asset, from the rails that it runs on”.

He believes that Bitcoin’s core strength lies in its open, durable and neutral nature, supported by a strong community. However, to make Bitcoin more usable for everyday transactions and financial services, L2s are essential. These L2s allow for faster and cheaper transactions without altering the fundamental properties of Bitcoin’s primary layer, and he sees them as the next critical step for Bitcoin’s growth and adoption.

On the second day, Kenny Rogers, Developer Advocate at the Stacks Foundation, highlighted Bitcoin’s power to change the financial system. At the same time, he questioned the stability of current DeFi models and praised Bitcoin for its foundational strength, while noting the necessity for Layer 2 solutions to build upon it.

The crux of Rogers’ message was that to keep Bitcoin’s network thriving long-term, it needs ongoing activity, and this is why it needs to be interacted with at layers beyond its base layer. He called on the community to make sure that these layers are built with the same ethos of decentralization and security that Bitcoin itself embodies. Optimistically, he pointed out that many developers who initially started with Bitcoin moved to Ethereum for its more build-friendly environment, but are now returning to Bitcoin as it becomes a hub for innovation.

What’s Next?

Muneeb also touched on the upcoming Nakamoto release by Stacks, which aims to introduce a trustless two-way peg system for Bitcoin, known as sBTC. This release is a significant step towards making Bitcoin fully programmable and expanding its utility and it’s another example of how Stacks continues to innovate and add value to the Bitcoin ecosystem.

Andre Serrano, sBTC Lead, also highlighted the user-centric upgrades coming to the Stacks Network, which aim to make transactions as secure as those on Bitcoin, enhancing the overall user experience. Serrano is closely working with startups preparing for the launch of sBTC, which promises to bring new users and applications to the network.

Serrano is particularly excited about sBTC’s potential to transform Bitcoin borrowing and lending on-chain. He envisions sBTC as a tool that serves as secure collateral and as a productive asset. This will open up new avenues for permissionless and non-custodial financial activities, including seamless trading between Bitcoin and stablecoins like USDC.

A Security Guide for the Everyday User by CoinFabrik’s Alfredo Ortega & Mark Rudnisky from the Stacks Foundation

This talk titled “Is This Project Safe? A Security Guide for People Who Aren’t Auditors” aimed to break down the complexities of blockchain security into digestible insights.

coinfabrik at bitcoin unleashed event
The lecture was somewhat different from the security topics commonly seen. Mark Rudinitsky, Security Engineer Lead at Stacks Foundation, opened the presentation by showing how he hacked Super Rare, alerted the company, and as of the presentation day, nothing had been done. With a playful tone, Mark demonstrated the difference between security “bad guys” and “good guys.” In the second part of the presentation, Ortega showcased good security practices and what should be considered when selecting a project. The session offered an opportunity to learn from industry experts about how to evaluate the safety of blockchain projects, for those without a technical background.

The Wallet Trilemma

Later in the day, in an insightful discussion “Beyond the Seed Phrase: The Next Generation of Crypto Wallets,” it was pointed out that Bitcoin, despite its pioneering role and robust security, has largely missed out on the Web3 wave. One of the keys to changing this lies in developing Bitcoin-specific wallets that cater to its unique technical attributes. User experience is also undergoing a transformation, especially as newcomers enter the ecosystem. While Bitcoin has often been viewed as a static technology, the landscape is changing with the advent of innovative projects like Stacks and Ordinals. A significant challenge ahead is the “wallet trilemma,” which involves finding the right balance between safety, usability, and interoperability. Addressing this trilemma could unlock the mainstream adoption of everyday DeFi solutions on Bitcoin and its L2s.

ALEX: Pioneering DeFi on Bitcoin

Dr. Chiente Hsu from ALEX captivated the audience with a vision of Bitcoin’s financial future that was both expansive and grounded. On day one, she dismantled the notion that Bitcoin’s current send-and-receive capabilities are enough, asserting that true finance—the kind that shapes civilizations—requires a more robust set of tools. She described finance as a “time machine,” a mechanism for transferring value that is integral to human progress. 

On day two, she unveiled ALEX’s game-changing plans to act as the vital protocol layer between L1 and L2, all while eagerly anticipating the Nakamoto release that will supercharge Bitcoin transactions from a sluggish 30 minutes to ~5 seconds. This will help unlock a new realm of financial possibilities like risk management, lending, and borrowing. 

But ALEX isn’t stopping there. They’ve put their money where their mouth is, launching a crypto fund aimed at nurturing projects that share their ambitious vision for a flourishing Bitcoin-based DeFi ecosystem. We find these initiatives to be more than valuable for anyone dedicated to propelling the Bitcoin ecosystem forward.

Insights on Regulatory Hurdles and Opportunities

A significant topic of discussion at the event was the current regulatory landscape in the U.S. and its impact on the crypto industry. The sentiment was that the U.S., despite being a hotbed for innovation and capital, is pushing businesses to look for opportunities in offshore jurisdictions due to its unfriendly regulatory environment. London was cited as a city that has historically capitalized on such shifts, particularly in markets like derivatives and foreign exchange.

The conversation also touched on the current “Wild West” nature of the crypto space, emphasizing the challenges and opportunities it presents. There was a shared excitement about the growing infrastructure, especially in the DeFi sector, which promises to bring more liquidity and broader adoption. However, the dual challenges of navigating both the innovative crypto space and the traditional financial regulatory environment were highlighted, underscoring the need for a robust support system for founders.

Rena Shah, Head of Operations and Strategy at Trust Machines, offered a compelling perspective on regulation. She expressed a desire for regulators to recognize the transformative potential that decentralized technology has for humanity. “This is why many of us are in the Bitcoin space,” she noted. Shah believes that if regulators could broaden their understanding, they would see the value of Bitcoin and decentralized tech extends far beyond mere speculation.

Ordinals Also Made Headlines at the Event

The panel “Ordinals Infra: What’s next in Minting and Inscribing” was one of the highlights of the event. Jim Crane, founder of This is #1 and Auditionals, pointed out that Ordinals have fundamentally altered the game by fusing the artwork and its proof of ownership into one unified entity on the Bitcoin blockchain. This is a departure from traditional NFTs, which separate these elements. Brian Laughlan from OrdinalsBot and Jan Smejkal from Xverse further elaborated on the limitless creative possibilities that Ordinals offer, from generative art to game inscriptions.

The panel also discussed the rapid growth of Ordinals, noting that inscriptions have soared from zero to over 35 million in less than a year. However, this surge has led to network congestion and debates around scaling solutions, underscoring the need for a more robust infrastructure to handle the increasing activity.

In summary, far from being a fleeting trend, Ordinals are carving out new avenues for digital assets and artistic ingenuity. Yet, they also bring complex challenges to the table—challenges that have electrified the community (like debates around network congestion and scalability) and that ignited a fervor to find innovative solutions.

The debate on The Risks of Bitcoin Ossification

Muneeb Ali and the renowned Bitcoin advocate Jameson Lopp, also Co-founder & CTO of Casa, went into the complexities and nuances of Bitcoin’s evolution. Lopp described ossification as a natural outcome for network protocols, likening it to a “rule of physics.” The idea is that as a network grows, changing its foundational language becomes risky and could potentially break the network. However, Lopp remains optimistic about the accelerating development in the Bitcoin ecosystem, particularly the rise of L2s and side chains, which he views as crucial for scaling and enabling permissionless innovation. Ali agreed that permissionless innovation should be a priority, with Lopp adding that he’d like to see improvements in security and privacy as well.

Ali believes the debate on the risks of ossification forces a valuable discussion on the properties we want from Bitcoin’s base layer, allowing most activities to happen on L2s and he advocates for Bitcoin’s Layer 1 to become more durable rather than experimental. Interestingly, he emphasized the importance of an inclusive consensus process in Bitcoin’s development. He noted that as Bitcoin grows, opposition to proposed changes will likely increase, making the next 5 to 7 years a crucial window for implementing forward-looking changes. 

The debate underscored the delicate balance between innovation and stability in Bitcoin’s ongoing development, highlighting the role of L2s as a promising avenue for future growth.

RSK: Expanding Bitcoin’s Utility with Smart Contracts

Daniel Fogg from IOV Labs gave an enlightening talk about Rootstock (RSK). RSK focuses on “everyday DeFi” use cases like pay, save, borrow, and send, targeting the underbanked populations in emerging markets. The platform has seen significant adoption in countries like Argentina, Colombia, and Nigeria, where traditional banking services are less accessible. Fogg emphasized that the adoption of cryptocurrencies is primarily coming from these emerging markets, and RSK aims to serve these communities by providing them with modern banking services through DeFi.

With $300 million in total value locked (TVL) and strategic partnerships with both Bitcoin miners and DeFi protocols like Money on Chain and Sovryn, RSK is positioning itself as not only a major player in the Bitcoin DeFi ecosystem but also as the second most secure blockchain in the world, making it an ideal platform for decentralized finance applications.

The platform is designed to be simple, with mobile apps that allow users to easily buy US dollar stablecoins, save, and send money overseas, making it a practical solution for the 1.8 billion underbanked people worldwide.

Building Together

Dr Chiente Hsu emphasized the importance of community and collaboration among entrepreneurs, urging them to look beyond their own projects, leverage the open-source nature of the industry and work with other teams for exponential growth. Edan Yago from Sovryn emphasized that creating a better world through Bitcoin isn’t a solo mission; it’s a collective endeavor that calls for builders to be as ‘Sovryn’ as the platform itself. Both speakers highlighted the need for partnerships, mentorships, and inter-ecosystem collaboration to achieve these ambitious goals. The takeaway is that in the open-source landscape of crypto, teamwork is essential— a philosophy deeply ingrained in CoinFabrik’s approach to pioneering Web3 technologies and ensuring robust security.

Closing Thoughts

Bitcoin Unleashed showed us where Bitcoin is headed and what we need to work on. A big thank you to the Stacks Foundation for organizing such an insightful event. It’s clear that the path ahead is paved with teamwork, innovation, and security. CoinFabrik is excited to be part of this journey, and we can’t wait to see what comes next.