The author acknowledges the transformative power of Bitcoin but emphasizes the crucial nature of 2024 for its mainstream integration and the need for Bitcoin to evolve beyond a mere store of value. The year 2024 is seen as the time when Bitcoin will either move closer to decentralization or be co-opted as just another financial product. The increasing influx of new investors through ETFs poses a risk, as it may result in investors holding representations of Bitcoin without direct engagement with the blockchain itself. This "paper Bitcoin" scenario presents a challenge to Bitcoin's true decentralization and self-custody of assets.
Though Bitcoin has been the largest digital asset by market cap, it has not been at the forefront of innovation in terms of use cases, with Ethereum and other chains leading the way. The author argues that Bitcoin needs to evolve as a technology, not just as a store of value, and points to the rapid development of layer 2 solutions like the Lightning Network as a step in the right direction.
The Lightning Network is cited as an example of what is possible but also a reminder of the existing limitations. The author asserts that current layer 2 solutions for Bitcoin do not yet have the capability to onboard the next billion users. The author emphasizes the need for Bitcoin to become an ecosystem where people can gather, trade, conduct business, and build, similar to the decentralized financial ecosystem seen in Ethereum and other chains.
The impending launch of ETFs is projected to expand Bitcoin's adoption, but the underlying blockchain needs to be proactive and accommodating for this to succeed. The author highlights the importance of Bitcoin's infrastructure being ready to harness the new activity for the advancement of a decentralized, sound money future.