There are over 1,000 blockchains operating throughout the world in 2023, with new platforms being proposed every day. Established market leaders such as Bitcoin and Ethereum are crossing the 10 year mark.
Historically, there are two schools of thought regarding blockchain technology. The first is that most blockchains used for finance will die out, leaving one clear winner. The other is that blockchains will specialize and multiply.
Even if specialized blockchains for every use case see success in the future, new projects must fill a need. Investing time and money into a project that is a clone of existing projects is not only wasteful, we would consider it unethical.
Since cryptocurrency and blockchain are highly technical burgeoning technologies, it isn’t always easy for users to identify and understand how certain projects differ from others. Laymen believe that all coins and tokens are speculative investments made to buy and sell, but someone with even a basic understanding of cryptocurrency knows that there are major differences between projects like Bitcoin and Ethereum.
We conceived Mintlayer to meet a specific need that is not currently being addressed. Even though other projects purport to offer DeFi on Bitcoin, there are some fundamental tenants they fail to comply with. These unique differences are sometimes in the details, but they’re important for long-term goals and compatibility.
Users Can Use Their Native Bitcoin on Mintlayer
The first and one of the most important differences between Mintlayer and other projects that purport to offer DeFi on Bitcoin is that Mintlayer allows people to use their native Bitcoin, while all other platforms require either a wrapped token pegged to the value of Bitcoin or a token bridge.
This is a major point of friction for people that want to use their Bitcoin with decentralized finance applications. Users have needed to convert their BTC into a wrapped version that is native to the blockchain they wish to use it on.
Even Blockchains that are the most incompatible with Bitcoin can offer pegged tokens.
On Mintlayer, users will use their native Bitcoin via atomic swap. This keeps users from relying on a third-party to act as a custodian and removes a major friction point between Bitcoin holders and DeFi applications as they exist today.
DeFi users lost $3,180,023,103 in 2022 due to hacks and other exploits in 2022. Token bridges and wrapped tokens were responsible for the majority of those losses. Mintlayer allows access to the large liquidity present on the Bitcoin blockchain without the increased attack surface.
No Native Gas Token
Most projects require their token to pay gas or fees when using their network. Our ML token will be available to use for network fees, but on Mintlayer users can pay fees with any token that blocksigners will accept.
As the Mintlayer ecosystem grows, users will reward blocksigners to accept popular tokens to become eligible for more rewards. This means that users will not need to keep a separate cache of gas tokens to use applications or complete transactions on Mintlayer.
This is another point of friction that is common across many blockchains that Mintlayer has eliminated.
Bitcoin Interoperability UTXO
Mintlayer isn’t the only blockchain that is built on the UTXO model, but it’s an important difference between Mintlayer and blockchains that aren’t.
Mintlayer’s mission is to connect the world’s pre-eminent cryptocurrency, Bitcoin, with a sidechain that facilitates a comprehensive DeFi ecosystem. It was crucial that we maintained as much interoperability with the Bitcoin blockchain as possible.
UTXO is ultimately more scalable. Since it is possible to process multiple UTXOs simultaneously, it allows parallel transactions and encourages scalability innovation. It also offers a higher level of privacy since it is harder to link transactions.
Lightning Network integration
Mintlayer is being built from the ground up with Lightning Network integration in mind. Our mobile wallet already has the Lightning Network integrated, and our development team is looking into several ways that we could take advantage of the Lightning Network’s incredible speeds and cost efficiency.
We expect that the Lightning Network will, at the very least, operate as a layer 3 on top of Mintlayer to facilitate payments and scale the network. Just like on Bitcoin’s existing Lightning Network, users will operate a peer-to-peer network of nodes that are anchored to the Mintlayer blockchain.
Mintlayer’s implementation of the Lightning Network will create unique features that increase its utility. For example, A node can set up a channel nominated in Bitcoin, and a channel nominated in a stablecoin, making it possible to exchange currencies during a transaction. Small businesses will be able to accept sales in Bitcoin, then receive payment in a stablecoin on Mintlayer.
Our development team is also looking at other new ways to leverage the Lightning Network’s efficiencies.
Superior Sustainability and Efficiency
Participants can run a full Mintlayer node on an average consumer PC which isn’t dedicated. Onerous hardware requirements do not block participation, which allows for a more inclusive network.
Mintlayer allows batching transactions, even between different tokens. A batched payment weighs about ⅓ of a traditional Ethereum transaction and grants more privacy against blockchain analysis.
Mintlayer uses Wasm, which is more efficient than Ethereum’s Virtual Machine. EVM doesn’t support integers smaller than 256-bit; any 256-bit operation has to be performed by the CPU with multiple 64 or 32-bit operations.
Why Be Different?
Mintlayer has had the luxury of hindsight when it comes to blockchain technology development. We have witnessed what other projects have succeeded with and what has caused significant problems.
We didn’t select these unique characteristics and features just to stand out from a crowd–we selected them because we feel there are clear advantages associated with their use or that the associated development costs are well worth the investment.
Our team believes that Bitcoin’s key differences are part of what has made it so successful at being adopted. Mintlayer’s key differences contribute to our overall vision in the same way, which is to build out a decentralized finance ecosystem that conforms to the Bitcoin community’s axioms. All other proposed solutions that lack these key differences compromise our community’s principles.