At the recent Bitcoin++ developer conference in Austin, Texas, Bitcoin Magazine’s Alex B. sat down with Michael from Boltz and Tiero from Ark Labs to discuss the latest developments in Bitcoin’s tech ecosystem, with a particular focus on emerging technologies such as the Lightning Network, Liquid, and Ark.
Lightning’s journey and challenges
Reflecting on the Lightning Network’s journey, Michael shared his insights on the challenges it has faced, especially in high-fee environments. “The biggest blind spot that has become crystal clear recently is that Lightning tends to hit hard in high-fee environments,” he said. He elaborated on the difficulties posed by skyrocketing fees and the need for better preparation and solutions, such as migrating operations to a different chain via submarine swaps.
Tiero highlighted an underestimated challenge posed by lightning infrastructure. He noted the need for innovative designs that use lightning to connect different layers like Fedimint, Liquid, Ark, etc. to improve user experience. “Lightning will always be the vehicle to connect all these new ideas,” Tiero said.
Liquid’s contested role
Though adoption has been relatively modest compared to other technologies, Michael and Tiero acknowledge that Liquid has proven to be a stable and reliable platform. “Liquid has been around for years. It’s well-known, it survived, and it’s still here to stay,” said Michael, pointing out the platform’s resiliency and reliability over the years. This stability is crucial for developers who want to build and experiment with new solutions without the risk of frequent interruptions.
Ark Labs’ Tiero elaborated on the benefits of sidechains like Liquid, highlighting their ability to reduce congestion on the Bitcoin mainchain. “When you have a sidechain, with clear tradeoffs, you can reduce strain on the mainchain,” he said, highlighting that Liquid’s architecture offers clear benefits, including lower transaction fees and faster processing times. This is especially beneficial in a high-fee environment, where moving operations off the mainchain can result in significant cost savings.
Michael also addressed the competitive landscape for new blockchain propositions, arguing that Liquid’s established track record offers a level of reliability and predictability that newer solutions may lack: “In the overall scheme of things for new propositions coming out, I think Liquid will continue to have a presence at least for a while.”
Emerging Standards and Interoperability
Discussing fragmentation within the ecosystem, Boltz’s Michael outlined the important role his company can play in providing liquidity to different chains and services. This ability to facilitate swaps between different Bitcoin layers, including Lightning, the main chain, and Liquid, is essential to maintaining a liquid and interconnected ecosystem. By offering these services, Boltz is bridging the gap between different platforms, allowing users to move assets seamlessly.
Michael also emphasized the importance of maximizing competition among service providers so that users receive the best market rates. “Ultimately, open specifications make sense. But this process is still in its early stages,” he said, emphasizing the need for experimentation before moving towards standardization. This experimental phase will allow best practices to be identified, which will help develop standardized protocols.
Ark Labs’ Tiero agreed with Michael, adding that it’s difficult to establish a universal standard at this stage because users have diverse needs: “Every company has its own users and sensibilities for those users.” He suggested that a larger, more diverse ecosystem would justify efforts toward standardization, but until then, companies need the flexibility to innovate and cater to specific user segments.
They both agreed that the priority right now is to allow companies to freely experiment and innovate. “If we can try things out for ourselves and see how it goes, we can go a lot faster,” Michael said. This approach allows for quick iteration and adaptation, fostering a more robust and resilient ecosystem in the long run.
Innovation by ARK
Ark Labs’ Tiero shared some interesting information about the company’s latest project, Ark: “ARK is still in the idea stage,” he explained, focusing on creating a protocol that can seamlessly integrate with existing technologies like Lightning and effectively address user needs.
“We’ve been able to show that it’s viable and that it works, and I think the next step is trying to understand what are the real use cases where there’s a huge demand,” Tiero noted. By focusing on practical applications and real user needs, ARK aims to create a robust, user-friendly protocol that addresses the ecosystem’s current limitations.
Experimentation is a key part of ARK’s development strategy. Tiero emphasized the importance of testing in a flexible environment like Liquid before finalizing detailed specifications. “Let’s just build as much introspection code into Liquid, which is super flexible, so that we can actually run recursive contracts,” he explained. This approach allows the team to maximize the protocol’s potential and make necessary adjustments based on real-world applications and feedback.
Michael addressed the uncertainty surrounding ARK’s future use cases and liquidity requirements: “Again, it’s kind of an unknown unknown. In theory, it’s interesting for service providers who have liquidity anyway,” he said, highlighting the need for further research and development.
Optimism about Bitcoin’s future
Concluding the discussion, both Tiero and Michael expressed strong optimism about the future of Bitcoin Layer and Covenant Technology. Tiero in particular is optimistic about Covenant Technology’s progress and sees it as a transformative force that will power protocols like ARK and Lightning. “These two days have made me very, very optimistic because, for the first time, all the people working with Covenant in production or in general have become very, very knowledgeable about this topic,” Tiero said, welcoming the opportunity to bring together experts to discuss and refine these ideas in a collaborative environment that could lead to breakthrough innovation.
They also praised concrete proposals such as the Rusty Russell Restoration Project, which aims to methodically enhance Bitcoin’s scripting capabilities. “Rusty’s model really gives us food for debate, a frame of reference for what these contracts mean from a computational perspective, and, as I said, we can restore Bitcoin’s script to its original glory in a safe and sensible way,” Michael said.
