Craig Wright, the man behind the Bitcoin SV node and lead developer at blockchain technology company nChain, tweeted yesterday: “Lightning networks are not layer 2. If you’ve been told it is, you’ve been lied to. Omni protocol, Lightning networks are layer 0, they are designed to steal network effects from the main network, not to compete.”
As a supporter of BCH, Craig Wright has some influence in the BCH community, and since the relationship between omni protocol and Bitcoin is somewhat similar to the relationship between the Wormhole protocol and BCH, the opinion of Craig Wright on Twitter caused controversy in the BCH community. The controversy revolves around whether omni and wormhole protocols steal the network effects of Bitcoin and Bitcoin Cash.
Introduction to Omni protocol and wormhole protocol
The Omni protocol, a platform for creating and trading custom digital assets and currencies, is a layer of software that builds on top of the Bitcoin blockchain. Omni protocol transactions are equivalent to bitcoin transactions, using the next generation of features on the Bitcoin chain. Using this protocol, tokens can be created, blockchain-based crowdfunding can be initiated, and token transactions can also be conducted under the OMNI protocol, from which the USDT comes. The key to the establishment of Omni protocol lies in the op-return data in the bitcoin script. The op-return data is located in the Bitcoin block and belongs to the remarks information, which will not be parsed by nodes. This data is as immutable as bitcoin transactions. When we customize the content in the op-Return when we initiate a transaction, the bitcoin node will not recognize the op-Return, then Omni will parse the data, if the data is customized token information, then the token based on Omni will be generated.
In view of the good performance of Omni protocol, the developers of BCH drew on the advantages of Omni and developed a wormhole protocol based on BCH. After the wormhole protocol went online, it won unanimous praise from the BCH community, and many enthusiasts began to use their BCH to issue tokens on the wormhole. So far, more than 190 tokens have been issued using wormholes.
Does the wormhole protocol steal network effects from BCH?
My point is that the wormhole protocol not only does not steal the BCH network effect, but enhances it.
First, the wormhole protocol does not modify the underlying network and does not deliberately make BCH work with it to make changes.
The reason why wormhole protocol can stand out among numerous BCH issuing token schemes is that its security occupies a large part. In BCH community, with intelligent contract implementation hair token function is an enduring topic, whether foreign or domestic developers are actively looking for a suitable solution, the agreement before the advent of the wormhole, BCH also have seen other scheme, such as op – group plan, but because BCH involved changes in the underlying protocol, Community members feel there is a risk, so these proposals remain theoretical. Although the wormhole protocol is not very original, it is safe and efficient, so there is no resistance to the introduction of the scheme.
Secondly, wormhole protocol issuance of tokens requires the use of BCH, which can improve the deflationary nature of BCH.
Creating and issuing tokens using the wormhole protocol requires a certain amount of WHC (the base currency of the wormhole protocol). Since THE WHC cannot reverse burn in exchange for the characteristics of BCH, the generation of WHC will permanently reduce the total number of BCH, thus increasing the deflationary nature of BCH. The most likely scenario is that BHC coin prices will rise. A reduction in the total amount of BCH does not affect its use as a peer-to-peer currency, since individual BCHS can be split and used with low fees.
Finally, the wormhole protocol increases the possibility of BCH.
The smart contract feature is a trend that has propelled Ethereum to the second place in the crypto market by market capitalization, and is an integral part of BCH’s existence. Recently, Ethereum was exposed as a serious congestion problem, with up to 65,308 unconfirmed transactions of Ethereum. Ethereum network is heavily congested. Many of ethereum’s previous successes rely on the large-scale application of smart contracts, but now ethereum’s biggest advantage is gradually disappearing. Ethereum prices fell on the news, as did the number of on-chain transactions. The reason for the congestion in Ethereum is the transaction of smart contracts and the popularity of decentralized Dapps in the last two months, which occupy a large amount of block space and cause continuous congestion. Although this is the performance of Ethereum as a smart contract public chain as the first choice of developers, the continuous congestion has shown that Ethereum network is at its limit, not seeking expansion will reduce user viscosity. In this case, the more competitive wormhole protocol becomes the choice of more people.
The wormhole project is an excellent project in itself, not only introducing competition in the realm of Token issuance, but also providing a new option for the overall cryptocurrency market. The future of the roadmap is also exciting, and it is only because it is just getting started and the overall crypto market is cold that it will be underutilized in practice. Its significance to BCH is just like the red envelope function in wechat. Perhaps at the beginning, its significance is not obvious, and it may just be a “fancy” thing. But with the warming of the market and its own improvement, it will bring us a surprise no less than the value of “red envelope function” added to wechat.