At the end of the article the day before yesterday, I wrote the following passage:

"The crypto ecosystem cannot always rely on Bitcoin. In the future, for the crypto ecosystem to truly change our lives, there must be real application innovations and new business models."

Additionally, I wrote:

"It is very unfortunate that after the protocol innovations in the Bitcoin ecosystem, there has been almost no follow-up in application innovations."

Today's article is a continuation of my thoughts on the two passages above.

Although it is still difficult to judge when the crypto ecosystem will have innovations that can truly change our lives, I have been paying close attention to this progress and gradually feel that this pattern can still be discerned from some details and signs.

To avoid bringing personal biases into this thought process, I tried to think about the problem from the opposite perspective:

After years of practice and exploration, is it possible to determine which ecosystems are least likely to see application innovations?

Following this line of thought, I began to have some concerns about the Bitcoin ecosystem.

In this bear market, we have witnessed a vigorous wave of protocol innovations in the Bitcoin ecosystem, witnessing firsthand the emergence of a large number of new assets and concepts based on these protocol innovations.

Now, looking back at these newly emerged protocols, assets, and concepts, I believe they essentially have not deviated from the path paved by early Bitcoin explorers, which is innovation based on Bitcoin's on-chain storage, or in other words, they are still revolving around on-chain storage.

Once this innovation based on on-chain storage comes to an end, application innovations in the Bitcoin ecosystem will come to a halt.

Although developers have proposed Bitcoin's second-layer scaling and added powerful virtual machines to the second layer, unfortunately:

Either the applications created using these features are just copies of Ethereum's applications;

Or people simply do not use these features for application innovations.

Among these, the second point, "people do not use these features for application innovations," is a very concerning point for the Bitcoin ecosystem.

Why am I so focused on the second point?

Because it reflects the subconscious positioning of ecosystem developers or the community regarding a blockchain ecosystem. Once this subconscious is formed, it is very difficult to change.

Additionally, can innovations based on on-chain storage, aside from asset issuance, continuously drive application innovations in other fields of crypto technology?

I believe not.

Otherwise, there wouldn't be an Ethereum white paper.

Isn't Ethereum's goal to expand Bitcoin's core framework, transforming it from mere on-chain storage (or simple scripting functions) into a Turing-complete on-chain computer?

Therefore, for the Bitcoin ecosystem to develop, there must be application innovations based on smart contract functionalities that are born, developed, and thrive within its ecosystem.

Once we delve into this, there are a few typical cases from this bear market that are worth our attention.

Recently, MEME coins on Solana have been very popular, and one major reason for this popularity is the emergence of the MEME platform Pump Fun, which provides a full-service experience.

Although Pump Fun cannot be considered a significant innovation, it greatly integrates the entire process of MEME issuance and improves the efficiency of MEME launches, which is a nice micro-innovation.

In addition to Pump Fun, there is also a MEME coin called GOAT on Solana, which is operated and promoted by AI agents. The special significance of this token lies in its integration of AI applications into the Solana ecosystem.

These are some of the relatively good application innovations on Solana since this bear market began.

What about the Ethereum ecosystem?

I believe two relatively good application innovations have emerged in this bear market:

One is Facaster, which has grown in the social domain;

The other is AI agent-based applications, such as Aether on Base and the platform Virtual that provides services for AI agent issuance.

Did these applications use any brand new blockchain technologies?

No.

They are merely combinations with other applications or integrations of existing tools and processes, focusing more on innovations in application models.

Can the existing Bitcoin ecosystem support the technological needs for such innovations?

Of course.

Bitcoin's second-layer scaling can now technically support such model innovations.

But no one is doing it.

Or rather, when people first come up with such ideas, they do not consider implementing them on Bitcoin and its second-layer scaling, but instead think of implementing them on smart contract public chains.

This either indicates that no one in the Bitcoin ecosystem has such ideas;

Or it shows that when people have such ideas, they subconsciously do not consider Bitcoin.

For many years, we have emphasized that Bitcoin's infrastructure is insufficient and its functionalities are not powerful enough, which is why numerous teams in the Bitcoin ecosystem tirelessly propose new second-layer scaling solutions.

In fact, while Bitcoin's infrastructure may still not be ideal in terms of security, its functionalities are already sufficient; it fully supports smart contracts identical to those on Ethereum.

However, in such a situation, some seemingly interesting small innovations and experiments still have not occurred in the Bitcoin ecosystem.

Can we see some signs from this?

If we think a bit further: in the future, when people have new ideas and thoughts, will they still not consider Bitcoin and instead prefer existing smart contract public chains?

The above innovations are just small innovations from some small teams or even individuals.

Aside from them, we also know that many large teams, such as Sony, exchanges, Bored Apes, Uniswap, and others, are building their second-layer scaling based on Ethereum. In such a case, when these large teams seek innovation, will they choose their own Ethereum second-layer scaling or the Bitcoin ecosystem?

I think the answer is self-evident.

If individuals, small teams, large companies, and institutions all default to choosing non-Bitcoin ecosystems for application innovations, then we must ask a question:

Where are the application innovation teams in the Bitcoin ecosystem?

Or when you, I, or others have a small idea in the application field that requires smart contract functionalities, will you, I, or they consider existing smart contract public chains or Bitcoin's second-layer scaling?

I have a deep impression that when the innovation in the Bitcoin ecosystem first showed signs during this bear market, all the observers of the ecosystem cheered: Bitcoin is starting to have an application ecosystem; it is no longer just "digital gold," but can become a platform for building applications like Ethereum. This made people unconsciously raise Bitcoin's upper limit to an exciting position.

However, once Bitcoin loses the support and development of an application ecosystem and returns to being merely "digital gold," can its upper limit still be raised to the once-anticipated position?

Next Saturday, November 9, at 8 PM, we will hold an online discussion in the Twitter Space.

The link to the space is: https://x.com/i/spaces/1vOxwrOlEAWJB

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