How the Bitcoin Halving Will Drive Action to Layer 2s
Bitcoin underwent its fourth halving, leading to increased trading activity and rising transaction costs. The launch of Runes protocol enabled the creation of meme coins, contributing over $80 million in fees to miners. The rising fees are driving interest in layer 2 solutions like Lightning Network. The launch of Ordinals protocol and other developments are driving up Bitcoin fees. Tokens associated with Bitcoin L2s have outperformed BTC post-halving. However, high fees may price out users from using platforms like Lightning non-custodially. This may lead to increased usage of custodial Lightning services, raising concerns about sovereignty and anonymity over BTC holdings. The current path of Bitcoin is a result of the Blocksize Wars, which led to the focus on layer 2 scaling solutions.
