Taproot Assets Bitcoin as an exchange medium

Who is Bitcoin for and what is Bitcoin? Twitter has a variety of catchphrases to help you with this. Bitcoin is for everyone… no wait, it’s for anyone! Bitcoin can be used as a form of storage. Bitcoin is used as a means of exchange. It would be easy to make a traditional appeal to authority by declaring that Bitcoin is what Satoshi said. “A Peer-to-Peer Electronic Cash System”.

Bitcoin is what we choose to make of it. It’s what we make it. We must build protocols and services to make Bitcoin a medium of exchange or a place to store value. 

It’s sometimes more interesting to know who we are building for. Do we build for Americans who are looking to make a long-term commitment? Are we building for a shop owner in Brazil? Are you a reseller in Turkey or Nigeria? A software developer in Nigeria? 

If we want bitcoin to be a medium of exchange, we need to focus on the users who need it most — and Taproot Assets is the tool for that job. 

Taproot Assets

Taproot Assets allows us to take the assets, and units of account, that people want and need today as mediums of exchange — and move them to Bitcoin infrastructure on the Lightning Network.

Taproot assets is, technically, a protocol allowing the mining of Bitcoin-based assets using Taproot Transactions in a blockspace-efficient manner. The November 2021 Taproot Soft Fork made this possible. The protocol uses client-side validation, is opt-in and does not require any consensus changes. Lightning Network is a protocol that allows for the exchange of fungible assets. You can start using it on mainnet right now.

Taproot Assets has a very flexible protocol, which is already opening up a lot of possibilities. But the primary use is for Lightning stablecoins.

If you want to find out more about the topic, please read on. docsFind tutorial and demo video clips on YouTube. here.

Why is it such an effective tool to encourage adoption? 

Meeting People Where they Are

It’s easy to get immersed in the Bitcoin world — where we use bitcoin, talk about it constantly, and dive deep into all the things it fixes. This passion is contagious. When we can connect people to this world, the magic begins.

The majority of people do not have time to spend on studying economics or monetary history. The world isn’t accustomed to having a lot of free time or disposable income. Keep your head down. We need to meet people at their level if we are going to make Bitcoin a global phenomenon. And we can: We have the tools and the skills to build things that are truly useful — products that people love not because they’re Bitcoin-powered, but because they solve real problems. 

It’s not just our understanding of Austrian economy that will bring about adoption, it’s also the fact we build things so useful they are used by everyone. The real measure of utility is users. Users are the true test. It is not the number that counts, but rather it’s you. People are a diverse group go up!

Stablecoins

Let’s now talk about stablecoins. Stablecoins are clearly a good fit for the market, regardless of whether they’re loved or questioned. The invisible voice has spoken! 

Look at these numbers:

Stablecoins are the main currency for crypto-transactions in Brazil. They’re used primarily as a payment and remittance method. 

Tether says it is used by 434,000,000 users around the globe, and that they transact $11 billion USDT per day. Savings account for 13% or the USDT total supply. These are people who live in emerging markets and do not have access to dollar.

The market capitalization of Tether (USDT), which has an estimated value of over $153 billion, is expected to reach $10 trillion by 2024. USD Coin follows, with a market cap of $61 Billion. The numbers are from CoinGecko.

You can also use this to your advantage. 

Why are people choosing stablecoins now? Utility.

The majority of people in the world do not have the luxury of HODLing through a bearish market. Many people don’t think about the complexities of fractional reserve bank. They’re busy living — busy being fathers, and mothers, and small business owners, and doctors, and carpenters, and farmers, teachers, and students. The things that make the world go round.

Money experts are here to provide the help they require. 

Stability and affordability are essential. 

Infrastructural Adoption

As the Bitcoin adoption story goes, first we achieve store of value, then medium of exchange, and then unit of account — the final boss! If we allow stablecoins to exist, do we prevent bitcoin from reaching unit of account? No. Bitcoin is a unit for account when and where the world will need it.

They will choose a stablecoin because they believe it to be the best choice for them. It is also the one that offers the greatest utility. The don’t think about “adopting Bitcoin”But they will adopt Bitcoin, the network. They will adopt Bitcoin as a network. The payment infrastructure will also be adopted by them. 

We are constantly thinking of ways to replace Visa and we must be able to process transactions in more currencies than Visa.

The Turkish seller is an expert at what he does and not in decentralized network technology. Lightning will replace Visa as soon as it is the more convenient, affordable and better choice for his business. Lightning is already the fastest, most affordable choice for many companies. 

Imagine the precoiner owner from Brazil. She is managing her business using Taproot Assets Lightning as a wallet to make transactions with a stablecoin. She switched from Bitcoin infrastructure. The simple, easy to use mobile wallet she used to simplify her business and reduce her cost, as well as her risk, prompted her. She can make global transactions in multiple currencies that are instantly settled. The wallet she chose was a convenient way to exchange currency, but it is only a button away from removing her precoiner status.

She can switch to Sats if the fiat collapse occurs on any random Tuesday. The Bitcoin infrastructure is already in place. 

Multi-asset Network

Underestimating the utility and potential of Taproot Assets’ multi-asset Lightning Networks is an outrage. This is a new medium of exchange that the world hasn’t seen.

Application builders and their users can have any unit of account that they like — U.S. dollars, Brazilian reais, euros, etc. — and it’s all routed through Bitcoin. Taproot Assets Lightning transaction require Bitcoin liquidity. The Lightning Network is supported and grown by these transactions, which provide an array of possibilities. Alice may send Bob a USD payment, while Bob receives BTC. Alice could send a second payment to Carol in USD, which will then be sent through the Lightning Network and the central sats liquidity.

Stablecoins allow our Turkish vendor to provide goods and services to the Brazilian store owner. He can interact seamlessly with Bitcoiners around the globe, and even with companies in other countries. Stablecoins are not required to be touched if the user does not want to. 

Then it gets better. Let’s imagine for a moment this scenario…

(https://x.com/MichaelLevin/status/1885402488955662448) 

A global, scalable, instantly settled payment network that’s meaningfully cheaper than Visa — a payment network that now gives users the option to transact in whatever coin they prefer. This is the brilliance of building with Bitcoin as infrastructure — people adopt the network before they even know it’s Bitcoin. 

You can also read our conclusion. 

We need to build for Bitcoin to be a currency of exchange. If this is the goal, then it’s up to us as experts to provide the users with what they clearly tell us they want: low-cost, instant transactions. Also known as multi-asset Lightning.

Taproot Assets, as we all know, is an extremely versatile protocol. It can and will be used for all sorts of things — including use cases that appeal to the American crowd who see bitcoin primarily as a long-term investment. Permissionless innovation, yay! We’re helping Bitcoin enter its new era as an exchange medium with this protocol.

It is a featured article in the current issue. Print The Lightning Issue of Bitcoin Magazine. This is a sample of the entire issue.