🎥1.3 Market Background
Current Development of Blockchain Public Chain
Since the era of Bitcoin, blockchain technology has undergone multiple phases; the most prominent is the emergence and development of various public chains. From Bitcoin's single currency application to Ethereum's smart contract platform and subsequently to various chains focused on specific functions like BNB Chain, Solana, and Cardano, each public chain attempts to address specific issues of blockchain technology through its unique technical advantages. The development of these public chains not only drives blockchain technology innovation but also significantly enriches the crypto asset ecosystem, a fact that our audience, particularly blockchain enthusiasts and investors, should recognize as a significant development.
Currently, the market value of mainstream blockchain platforms indicates a total cryptocurrency market capitalization of $2.67 trillion. Within this market, Bitcoin (BTC) holds the highest market share at approximately 51.1%, while Ethereum (ETH) has about 16.5%. These figures demonstrate that Bitcoin and Ethereum continue to dominate the crypto market.
Barriers Between Ecosystems and Asset Circulation Issues
Despite the expansion of public chains, which offer a wide range of possibilities for blockchain applications, they also present a challenge —the 'barrier between ecosystems'.
This term refers to different blockchain networks forming independent ecosystems due to variations in technical standards, consensus mechanisms, and development languages. This obstacle leads to complications in asset and information flow between chains, restricting the overall application of blockchain technology and the maximization of crypto asset value. For instance, native ERC-20 tokens on Ethereum cannot operate directly on the Bitcoin network and vice versa.
Blockchain platforms like Bitcoin, Ethereum, and BNB Chain are built on their unique technical architectures and consensus mechanisms. This technical diversity means they need more natural compatibility, leading to difficulties in cross-chain asset transactions. For example, Bitcoin uses the UTXO model, while Ethereum uses an account-based model. The fundamental differences in handling transactions and states make direct asset transfers between the two chains complex and costly.
Each blockchain network uses different token standards, such as Ethereum's ERC-20, incompatible with Bitcoin or other chains' token standards. This inconsistency further complicates asset circulation because transferring assets between blockchains often requires centralized exchanges or dedicated bridging services, increasing transaction costs and time.
Due to the lack of a unified cross-chain transaction protocol, users often need multiple tools and services to transfer assets across chains, complicating the process and introducing security risks at each step. For example, users may need to transfer assets to a centralized exchange and then to another chain, involving multiple security measures.
Restrictions on asset circulation between blockchains and the transaction, as mentioned, can result in inefficient capital utilization. Funds may need to be locked for extended periods during transfers, affecting their usage efficiency. High transaction fees and potential exchange rate risks also contribute to low capital efficiency.
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