Bitcoin, as the pioneer of cryptocurrency, is a complex adaptive system interwoven from three core technologies: transparent and trustworthy code (blockchain technology), decentralized distributed accounts (UTXO technology), and asymmetric, reality-aware, and self-adaptive Proof of Work (PoW) technology.
Currently, various solutions have emerged for the vertical scaling of Bitcoin. At the PoW level, mining pool technology and merged mining technology have achieved scalability by improving mining efficiency and security, but they have also absorbed most of the profits in the cryptocurrency industry. At the blockchain level, #BRC20 explores the potential of Bitcoin’s blockchain as a data storage medium by recording information on-chain. Meanwhile, at the UTXO level, #Runes represents an attempt to extend the existing account model.
However, the true charm of Bitcoin lies in its inherent decentralization, and the cornerstone of this feature is precisely its distributed UTXO-like account model. Compared with traditional account models, the UTXO model uses unique transaction outputs as carriers of ownership, offering higher security and privacy.
We believe that #BRC20 and #Runes are merely early explorations of Bitcoin’s technological extensions. At this stage, they are more akin to Ethereum’s 2017 ICO boom—primarily addressing asset issuance and speculation demands, without truly touching large-scale real-world applications. The essence of UTXO is not just about tokens but a distributed account system.
Therefore, a potential direction for innovation is to decouple Bitcoin’s UTXO account system from its original blockchain and PoW mechanisms for independent reuse. By reducing or completely removing dependency on Bitcoin’s existing blockchain and PoW, we can construct more flexible and efficient expansion applications, breaking through the current limitations of the Bitcoin ecosystem and enabling unlimited application scenarios. The core logic of this approach is that Bitcoin’s most essential value lies not merely in the cryptocurrency BTC itself, but in the vast user base and consensus represented by its UTXO account system.
The existing Lightning Network can be viewed as an early demonstration of BTC value transfer built on Bitcoin’s UTXO account model. It achieves faster and lower-cost micro-payments through off-chain transactions and on-chain arbitration/notarization. However, the application scenarios of the Lightning Network are still limited to monetary payments within the Bitcoin UTXO account system.
Looking forward, we can build broader real-world applications of trust based on Bitcoin’s mature and secure UTXO account system. This goes beyond simple value transfers and can expand into identity authentication, asset management, data rights confirmation, supply chain finance, and more.
To realize this vision, we can draw on the theory of complex adaptive systems, especially by referencing the methodology of P/NP perception of reality proposed in geb.network. geb.network explores concepts such as formal systems, recursion, and self-reference, which can inspire us to design a new type of UTXO-based system that is capable of self-evolution, environmental adaptation, and emergent complex functions. For instance, we can explore how to use the atomicity and indivisibility of UTXOs to build more secure smart contracts, or how to design new consensus mechanisms to maintain the state of an independent UTXO system.
In summary, Bitcoin’s UTXO account system holds immense potential. By independently extracting and creatively reusing it, we can break free from the constraints of Bitcoin’s existing blockchain and PoW, and build a more scalable and flexible trust infrastructure to serve broader application scenarios—truly unlocking the potential value of the Bitcoin ecosystem. This is not only a technological innovation, but also a profound understanding and innovative application of Bitcoin’s core value: decentralized consensus.
