Stacks Nakamoto upgrade unfolds a new era for the Bitcoin L2

Bitcoin layer-2 solution Stacks initiated the rollout of its Nakamoto upgrade shortly after the halving last Friday. This significant development is designed to enhance transaction throughput and unlock Bitcoin finality for layer-2 transactions.

The Nakamoto upgrade aims to enable faster block processing and ensure all settlements are finalized on the layer-1. This will allow Bitcoin to remain secure while being programmable, similar to Ethereum and Solana Virtual Machines.

Muneeb Ali, the co-founder of Stacks, told Blockworks that the Nakamoto upgrade and the general growth of Bitcoin layer-2 infrastructure may revive interest in the Bitcoin blockchain itself.

“Users are finally separating BTC the asset from Bitcoin as the rails,” Ali said. “BTC is the only digital asset that has proved itself as a hedge or store of value. This has created nearly $1 [trillion] in capital just sitting there. I believe the significant advancements made by [layer-2s], like Stacks’ Nakamoto upgrade, are a large contributor to this resurgence.”

Loading Tweet..

According to the Stacks team, the Nakamoto upgrade rollout will continue over the next month, improving block times from the current 10-30 minutes to around five seconds. Ali notes that these improvements will enable Bitcoin layer-2s to support the growing DeFi applications that are being built.

“I think the market is awakening to the fact that Bitcoin can be the base layer for our industry. Bitcoin is the apex crypto asset, and [layer-2s] are enabling an economic flywheel around BTC through apps and smart contracts,” he said.

In addition to improved Bitcoin layer-2 infrastructure, Ali notes that other types of innovations are also gaining significant interest in the Bitcoin blockchain. These include ordinals and BRC-20s, which saw a spike in interest following Bitcoin’s all-time high last month.

“Experimentation is good for Bitcoin and Bitcoin [layer-2s], so we should encourage more R&D around [layer-2s], Ordinals, Runes and other innovations. I predict that post-halving we will see a [layer-2] summer where the Bitcoin developer ecosystem and competition heats up,” Ali said.

Get the news in your inbox. Explore Blockworks newsletters:

Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
Empire: Start your morning with the top news and analysis to inform your day in crypto.
Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
The Drop: For crypto collectors and traders, covering apps, games, memes and more.
Supply Shock: Tracking Bitcoin’s rise from internet plaything worth less than a penny to global phenomenon disrupting money as we know it.