Bitcoin, the world's first and most widely adopted cryptocurrency, has faced numerous challenges in its journey to becoming a mainstream payment method. In this article, we will explore the issues encountered by Taproot Wizards during their Quantum Cats sale, and how these challenges can be addressed to improve the overall user experience and make Bitcoin a more viable payment solution.
The Sale and Its Challenges
Taproot Wizards, a leading Bitcoin-only merchant, recently completed their Quantum Cats sale, which saw over 300 BTC in Bitcoin L1 payments (over $15m USD) processed. However, the sale also encountered several issues that highlight the limitations of Bitcoin as a payment method, including:
- Long Confirmation Times:
- For low-demand products, long confirmation times are not a significant issue. However, for high-demand products, buyers need to know as soon as possible if their payment was successful. This can lead to multiple payments being sent by buyers, resulting in a high number of refunds.
- To minimize refunds, Taproot Wizards had to approve orders based on unconfirmed transactions, which required manual review and increased the risk for the merchant.
- Payment Amounts Not Enforceable:
- Unlike other payment systems, Bitcoin allows buyers to send any amount they want, which can lead to underpayments or overpayments. For high-demand products, this can result in buyers attempting to pay more to secure a larger allocation.
- Taproot Wizards had to process 20 BTC in refunds (over $1 million USD) due to intentional overpayments by buyers.
- Onchain Fees:
- High-demand sales can lead to increased onchain fees as buyers attempt to overpay miners to ensure their transactions are confirmed first. This can make the network more expensive to use for everyone else.
- Taproot Wizards had to manually review incoming payments to minimize their impact on the network and ensure that only payments likely to confirm were processed.
- "Just Use Lightning Bro":
- While the Lightning Network can structurally resolve many of the issues with Bitcoin's payment system, it is not a feasible solution for high-demand sales due to its limited capacity and the need for service providers to lock up significant amounts of BTC to support such sales.
The Future of Bitcoin Payments
Despite these challenges, there is hope for Bitcoin to become a more viable payment solution. One potential solution lies in the revival of Bitcoin's OP_CAT scripting function, which would allow for the development of better payment networks on top of Bitcoin that address the issues mentioned above.
By staying up to date with developments in the Bitcoin community, such as those from Taproot Wizards and their Quantum Cats campaign, we can continue to push for improvements and innovations that will make Bitcoin a more successful payment method.
Chain Key Bitcoin
Chain key bitcoin (ckBTC) is a "trustless bitcoin twin" that can help address the challenges faced by Bitcoin in terms of scalability, speed, and transaction costs. By leveraging the Internet Computer's advanced technology, ckBTC enables fast and low-cost transactions while maintaining the security and decentralization of the Bitcoin network.
ckBTC is a multi-chain bitcoin 'twin' that is cryptographically secured 1:1 with real bitcoin. It is created by a pair of open source, verifiable smart contracts, which allows for cross-chain transactions. This innovative approach enables users to enjoy the benefits of both the Bitcoin and Internet Computer networks without having to trust wrapped bitcoin from centralized bridging services.
One of the most significant advantages of ckBTC is its ability to process millions of small transactions at a fraction of the cost and time it would take on the Bitcoin network. This is made possible by the Internet Computer's high-speed and low-cost infrastructure, which allows for 1-2 second finality and negligible fees.
The integration of ckBTC into the MyLugano crypto payment app developed by NOKU is a major step towards the Internet Computer infrastructure integrating with the city of Lugano to eventually enable a plethora of municipal services using bitcoin. This real-world use case demonstrates the potential of ckBTC to revolutionize the way people interact with Bitcoin and other cryptocurrencies.
In conclusion, ckBTC offers a promising solution to the challenges faced by Bitcoin in terms of scalability, speed, and transaction costs. By combining the security and decentralization of the Bitcoin network with the advanced technology of the Internet Computer, ckBTC has the potential to transform the way we use and interact with cryptocurrencies.
