Botanix 🕷️

BITCOIN RAILS #54: BUILDING A FINANCIAL SYSTEM ON BITCOIN | with @Botanix CEO @WillemSchroe 🔗 YOUTUBE: youtu.be/76GxNbaHzXk 🌿 SPOTIFY: open.spotify.com/episode/5CaCTt… “People in finance understand the financial system, but not money. People in Bitcoin understand money, but not the financial system.” In a world where financial markets make up 70% of all money flow around the world, we have two choices: come up with technical solutions that enable these use-cases in a decentralized way, or simply accept that Bitcoin will be used in a custodial way whenever more complex use-cases are at play. @botanix CEO @WillemSchroe is staunchly rejecting the latter — and attempting to solve some of the toughest challenges faced by the L2 and scaling landscapes (e.g. the “honeypot problem” that nearly all other L2s will ultimately face if not addressed). Willem and I break down the design space of Bitcoin L2s, why DeFi may be necessary for Bitcoin’s financial system to emerge, and how different technologies — like Spiderchains, BitVM, Lightning, and others — could eventually combine into a decentralized Bitcoin-native financial stack. In this episode, we discuss: - Why Bitcoin needs a financial system, not just payments (hint: without it, we'll end up like Gold) - The role of DeFi and stablecoins in Bitcoin adoption - The "honeypot problem" introduced by most Bitcoin bridges, and how implementing Spiderchains could be the solution - Combining Spiderchains, BitVM, and other models into the ultimate Bitcoin scaling stack This episode of Bitcoin Rails is powered by: - Best In Slot (@bestinslotxyz) — the leading API for Ordinals and BRC20 data aggregation and indexing. - Spark (@lightspark) — a statechains implementation advancing Bitcoin-powered payments. - Citrea (@citrea_xyz) — a leading Bitcoin rollup technology and BitVM alliance contributor. TIMESTAMPS 00:00 Intro 02:02 From Cryptography to Bitcoin 04:48 Willem’s Wake Up Call 06:40 Self-Custody or Bust 10:06 DeFi and EVM Rise 13:20 Why Bitcoin Needs DeFi 16:24 Yield as Adoption Signal 18:12 Spiderchains Problem Setup 20:42 Decentralized Bridge Concept 25:30 Spiderchains Architecture Explained 32:45 BitVM Trust vs Upgrades 37:41 BitVM + Spiderchains 42:48 Lightning as Interop Layer 46:14 Ark and EVM Debate 49:30 Infra Needed for DeFi 52:49 Why EVM Wins Adoption 56:48 Is Bitcoin Scaling Behind? 59:41 Retail vs Institution Adoption 01:01:26 Inflation Awakens Adoption

Had a great chat with @botanix CEO @WillemSchroe about why expanding self-custodial Bitcoin — and the Layer 2 technologies making this possible — is the only way Bitcoin meaningfully differentiates itself from Gold. The most critical impediment of Gold is that it's difficult to use in a self-custodial way. If Bitcoin doesn't solve the challenges we face around self-custody, we won't be able to outperform Gold in a meaningful way. Full episode drops tomorrow. Follow to make sure you don't miss it ⏰

We're so early. #Bitcoin