Jeff, the founder of Merlin Chain, argues that Ethereum can handle most of the innovations built on layer-2 networks, but Bitcoin cannot, making layer-2s more important for the Bitcoin ecosystem.
Bitcoin decentralized finance (DeFi), or BTCFi, a new movement seeking to bring DeFi to the Bitcoin network, has grown in popularity since the advent of Ordinals and BRC-20 tokens. In episode 47 of Cointelegraph’s Hashing It Out podcast, Jeff, the founder of Merlin Chain — a native Bitcoin layer-2 network — explains how the BTCFi movement is evolving from BRC-20 to BRC-420, the issues faced by layer-2 networks and Bitcoin (BTC), and why the rise of building utility on the network is bullish for the entire ecosystem.
Jeff breaks down the difference between BRC-420 and BRC-20, explaining that BRC-20 allows developers to create and mint tokens, whereas BRC-420 is about modulized data and tokenized modules. He cites an example of how an artist could use BRC-420 to distribute an album on-chain.
Jeff says that an artist can inscribe five songs separately and then put all of the songs together as one inscription by using BRC-420. The artist can then tokenize the album into multiple shares, allowing fans to purchase the album on-chain.
