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How will the Arrival of Smart Contracts Impact Bitcoin?

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Bitcoin

By now, most people around the entire world have heard about Bitcoin. It is the first cryptocurrency, the largest coin in the industry, and its brand is so massive that, for a lot of people, it is synonymous with cryptocurrency itself.

Bitcoin first emerged when Satoshi Nakamoto, its mysterious creator, published its white paper on October 31st, 2008. Only a few months later, on January 3rd, 2009, the coin was launched, and it changed the world forever. Of course, back then, nobody had any idea, and it would take years for BTC to become known and used.

During those years, skeptics kept announcing its death time and time again, and these days, nobody can even count how many times ‘the death of bitcoin’ emerged as a newspaper title or a prediction given by traditional banking institutions, regulators, governments, as well as regular people skeptical of this technology.

However, Bitcoin gave us a promise of decentralization and having control of our own money, which was something that immediately hooked everyone who came into contact with it.

It wasn’t long before new projects started coming out, at first as simple copies of BTC, but in time, more and more innovative and different. In time, this innovativeness led to the birth of Ethereum, which changed the world for the second time.

The arrival of smart contracts

The launch of Ethereum in 2015 changed the crypto industry, as well as nearly every other industry, forever. This is due to the fact that Ethereum introduced smart contracts — self-executing, immutable, trustless contracts that were essentially just agreements written in code and stored on top of the blockchain technology.

But, this single invention led to the creation of countless solutions that we know and love right now. Some prime examples include the likes of dApps, stablecoins, DeFi protocols, NFTs, and much more. However, due to the difference in architecture, they were only available on Ethereum. You couldn’t create them on Bitcoin’s network, as it simply wasn’t created in a way that would support them.

This made Ethereum unique, and probably the most innovative thing to emerge in the crypto industry since Bitcoin itself. Of course, projects similar to Ethereum started to emerge soon after that, and these days, there are countless development platforms just like it.

Well, maybe not exactly like it. Ethereum has its fair share of problems, many of which are shared with Bitcoin, such as low transaction count, inability to scale, high transaction fees, and alike. In fact, in terms of technical capabilities, Ethereum was outperformed by one of its clones fairly quickly.

But, as the original development platform, it continued to reign supreme, and to this day — over six years later — not a single project managed to outperform it, despite all of its flaws.

With that said, it would seem that the crypto industry is ready to take the next step in its evolution. Its first step was its creation, which was marked with the launch of Bitcoin. The second step was the launch of Ethereum. Now, Dfinity’s Internet Computer is getting ready to take things to the next level and bring infinite blockchain to the masses.

What is the Internet Computer and what does it do?

Simply put, Internet Computer is a project that aims to use smart contracts — and offer them to others — for the purpose of reimagining everything at the internet scale.

But, what does that mean?

Well, the project wishes to host smart contracts on its blockchain, make them run at web speed, and have them serve the web from cyberspace, run efficiently, scale within an environment with an unbounded capacity, and more.

It is one of the projects that aim to make the entire internet decentralized, host humanity’s websites, services, financial rails, and more. In other words, it wishes to be the project on which the next generation of internet services will be built. And, since the world is rapidly gravitating towards decentralization, this seems like a perfect project to take on that role.

However, the project is also important for another reason, and that is its intention to bring smart contracts to Bitcoin.

Internet Computer will enable smart contracts on Bitcoin’s network

As mentioned previously, Bitcoin is incapable of having smart contracts on its network natively. It simply wasn’t designed in a way that would allow it. However, Internet Computer aims to make it possible through an integration with the Bitcoin network, which would ultimately change the direction in which Bitcoin is heading.

No longer will BTC have to launch wrapped versions of itself on other chains in order to have indirect access to smart contracts and their functionalities — it will now be able to utilize Internet Computer’s capabilities to have them run in its own back yard.

This will open up an entire world of new possibilities, and it will be like Bitcoin and Ethereum had combined. With Bitcoin’s seemingly infinite lifespan, massive brand, high price, low supply, extreme demand (especially since institutional investors started buying every coin available), the Bitcoin DeFi sector will likely explode beyond anything we have ever seen before.

There is no telling what it might do to the BTC price, and some have even speculated that Bitcoin itself might become the fabled ‘Ethereum Killer.’

Of course, this is all pure speculation as of yet, as we still don’t know how much will all of this be possible in reality. But, speculation like that is bringing a lot of hype to the crypto industry, as giving Bitcoin the possibilities like dApps, DeFi protocols, NFTs, and alike, would be the biggest step in a development that the project has ever seen.

It would certainly cement its position in crypto forever, even though some have previously started to speculate about which coin might replace BTC, given its technical limitations and the fact that sentiment and its brand are the main things keeping it so high up. With so many new use cases, BTC would be virtually unchallenged, if it can all truly happen as it is assumed.

It is certainly an interesting idea and one that is very close to reality. Internet Computer has the potential to change the way the entire internet works, of course, but its ability to change Bitcoin might be even more exciting. For the moment, we will have to wait and see how the development and integration of the two projects progress. But, after that, it may very well be that BTC would push its own limits more than anyone ever thought would be possible.

Ali is a freelance writer covering the cryptocurrency markets and the blockchain industry. He has 8 years of experience writing about cryptocurrencies, technology, and trading. His work can be found in various high-profile investment sites including CCN, Capital.com, Bitcoinist, and NewsBTC.

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