If you just look at Twitter, you’d think Lightning is the only real layer 2 proposal for Bitcoin, but I think Cosmos actually presents a fascinating alternative, with very different tradeoffs.
Imagine a Cosmos zone with a validator set (maybe the ATOM validators, or maybe not) who control a Bitcoin multisig wallet. There are a lot of ways you could choose these validators (with a staking token, using BTC itself as a stake, or even with some variant of Proof of Work) but you can use this basic framework to have a zone where users can send Bitcoin, and then use it in ways that mainchain bitcoin can’t be used, for example in complex smart contracts that extend functionality beyond what Bitcoin Script allows.
Something that’s always put me off about a lot of the ETH ecosystem is that seemingly every new project comes with a new, increasingly illiquid token. Cosmos plus Bitcoin gives us the chance to create things like prediction markets without needing a new token at all—and using the single cryptocurrency that is most “money-like” as a result of its superior liquidity and acceptance.
2019-03-14 | Full Review