Twitter founder Jack Dorsey recently stated that the Bitcoin community should prioritize scaling payments to maintain relevance. “I think it has to be payments for [Bitcoin] to be relevant on the everyday,” he told Haley Berkoe on the 21 in 21 podcast.
However, I find myself at odds with this perspective.
As someone actively engaging with Bitcoin builders and market participants, I believe that payment functionality alone is not the pathway to achieving widespread Bitcoin adoption.
To enhance Bitcoin’s everyday relevance, we must focus on enabling users to utilize their Bitcoins without the immediate need to sell or transfer them (i.e., hodling). This focus is particularly crucial on the institutional front, where a robust corporate strategy extends beyond merely holding BTC on balance sheets.
Bitcoin represents a generational asset. Given that most holders view it as a long-term investment rather than a transactional currency, we must consider how to keep the blockchain healthy and vibrant. As miner rewards decrease with each halving cycle, sustainable incentivization methods will be vital to the ongoing conversation surrounding Bitcoin’s future. Engaging Layer 2 solutions, such as Stacks, which can introduce smart contract functionality without jeopardizing the base layer, presents far more substantial opportunities than solely scaling payment capabilities.
By 2025, Bitcoin has solidified its status as “digital gold,” with individuals, institutions, and even countries treating it as a safe-haven investment. This developing trend does not suggest a trajectory toward becoming a primary payment vehicle; rather, it offers a fertile ground for Bitcoiners to engage in Bitcoin DeFi, transforming BTC into a productive asset.
A recent Binance research report highlights that merely 0.8% of Bitcoin is currently utilized in DeFi. This statistic unveils nearly $1 trillion of untapped potential on-chain, contingent upon our ability to create compelling cases for building on Bitcoin.
Bitcoin’s inherent strengths lie in its security, decentralization, and finite supply. Given these traits, why would individuals choose to spend their BTC as a mere payment method? Instead, DeFi protocols enable users to bridge their Bitcoin to Layer 2 solutions, facilitating the borrowing of stablecoins. As BTC is increasingly perceived as generational wealth, it emerges as the ideal collateral. DeFi not only allows for payments using digital assets while securely maintaining BTC on the blockchain but also positions Bitcoin as the most pristine collateral available.
I concur with Dorsey’s proposition that Bitcoin’s success hinges on its daily relevance. However, we can cultivate enduring relevance by empowering individuals to engage with Bitcoin in more meaningful, on-chain ways through DeFi.
The future leaders in this space will be those builders who develop platforms extending Bitcoin’s functionality to include lending, borrowing, and various financial services without compromising security. By leveraging Layer 2 solutions, we can envision users creating bitcoin-based savings accounts, earning yield in bitcoin, and obtaining loans against their BTC—actions that will largely transpire through scalable L2 networks.
Bitcoin can maintain its identity as an asset of generational wealth or a hedge against inflation while also actively participating in an evolving financial ecosystem.
Ultimately, the true utility of Bitcoin lies in creating opportunities for users to engage in a myriad of activities, rather than simply facilitating everyday transactions like buying coffee.
