Liquidity dilemma + Decentralized Finance missing: What kind of 'lightning revolution' does BTC acceleration need?

Authored by: Jimmy

Summary: Bitcoin Thunderbolt, like Bitcoin Lightning, is a speed-up network born to solve the confirmation acceleration problem of the Bitcoin network. The difference is that Bitcoin Lightning does not support programming, can only make payments, and has high construction costs. In contrast, Nubit's Bitcoin Thunderbolt plans to support programming and more Turing-complete complex operations, improve liquidity shortages, make up for the lack of deployment capabilities in Defi applications, and truly achieve the 'super-speed evolution' of Bitcoin.

The story of Bitcoin is always about time.

Time has made it indestructible, and time has also allowed it to grow in extremes.

Its security is built on time: 10 minutes per block, a stable and unchangeable supply of 21,000,000, longest chain consensus...

Its challenge also comes from time: a throughput of 7 transactions per second, even less than an Ethereum L2.

If Bitcoin wants to become a truly global currency and global computing network, it must become faster, stronger, and more scalable - but the fundamental security of Bitcoin does not allow it to change the underlying rules arbitrarily.

Undoubtedly, Bitcoin is the most secure decentralized financial network in the world, but at the same time, it has also become one of the slowest public chains.

Bitcoin is secure enough, but not fast enough.

Bitcoin is reliable enough, but not flexible enough.

In such a predicament, the Bitcoin community has embarked on a difficult path of technological evolution.

Lightning Network: Lightning Network, an unfinished dream

How to speed up Bitcoin?

Over the past decade, the Bitcoin community has been trying to answer this question.

As early as 2015, the first "acceleration plan" for Bitcoin was born. It is called the Bitcoin Lightning Network.

At that time, the debate over Bitcoin's scalability had just begun. SegWit soft fork had not yet been proposed, and on-chain scaling solutions were in fierce competition with sidechain solutions. The community was in constant debate over issues such as block size and transaction throughput, trying to find a way to make Bitcoin as convenient as credit card payments while preserving its decentralized nature.

In February 2015, Joseph Poon and Thaddeus Dryja proposed the concept of the Lightning Network in a paper, hoping to make Bitcoin transactions faster and cheaper through State Channels.

The idea of the Lightning Network is: if all transactions are submitted to the Bitcoin mainnet, the efficiency will definitely not keep up. So why not put small transactions off-chain and only write them into the blockchain at the final settlement?

This idea does work. To date, the Lightning Network has become one of the important infrastructure in the Bitcoin ecosystem, supported by various Bitcoin wallets and payment service providers globally. However, strangely, it has never really gained widespread adoption.

It cannot be denied that the Lightning Network makes Bitcoin transactions faster and cheaper. But if we return to the core vision of Bitcoin "decentralized, verifiable, secure," it is easy to find that the Lightning Network still has several key issues to solve:

1. Liquidity Issue: It still remains a 'channel network'

Lightning requires users to deposit BTC in advance to open payment channels, which means that users' funds are locked and liquidity is limited. Once the BTC in the channel runs out, the transaction will fail, and it must be rerouted, increasing transaction costs and uncertainty.

In other words, it is not suitable for large-scale, more extensive financial applications.

2. Intelligent issue: It cannot achieve DeFi on Bitcoin

The changes in the Bitcoin ecosystem far exceed the scope of payments.

From Ordinals to BRC-20, from Runes to BitVM, the asset layer of Bitcoin is undergoing constant revolution. However, the Lightning Network still only supports basic payment logic and cannot run complex contracts, financial protocols, or asset transactions.

In other words, it cannot meet the needs of rich DeFi applications and products.

3. Decentralization issue: Its degree of decentralization is decreasing

In theory, the Lightning Network is a decentralized payment network. However, in reality, the majority of liquidity is concentrated in a few 'super nodes' (large payment providers), users often need to transact through these nodes, weakening the concept of decentralized finance in Bitcoin and also compromising security.

Simply put, if Bitcoin is to become a true global financial infrastructure, it needs far more than just a simple payment network.

It needs an acceleration layer that can execute complex logic.

Bitcoin not only needs to be 'faster,' but also 'smarter.'

Bitcoin Thunderbolt: Bitcoin "Lightning Network"?

Ten years later, a unexpected text may be the answer.

On February 21, 2025, Hanzhi, who is pursuing a Ph.D. in CS at UCSB and concurrently co-founded Nubit, posted a tweet on his X personal account, sparking a large amount of discussion and dissemination in a short time. In the tweet, Hanzhi publicly announced a Bitcoin acceleration plan - Bitcoin Thunderbolt, the Bitcoin "Lightning Network".

From the name, Bitcoin Thunderbolt directly points to the transaction acceleration and programmability of Bitcoin, indicating that this technical solution may be able to fill the capabilities that Lightning Network currently cannot achieve.

Currently, Nubit has not yet disclosed the complete technical details, but from the information it has revealed, Bitcoin Thunderbolt may have the following key features:

1. No need for channels, no need to lock funds

Unlike Lightning Network, which requires the establishment of payment channels, Thunderbolt may not rely on a centralized liquidity network, but rather on the native solution of the Bitcoin mainnet.

2. 100% Bitcoin-native

All transactions and computations are built on Bitcoin, without relying on additional L2 networks or centralized indexers, fully inheriting Bitcoin's native security.

3. Smart programmability, supporting smart contracts on Bitcoin

Thunderbolt may bring true smart contract execution capabilities to Bitcoin, compatible with BRC-20, Runes, Ordinals, and even enabling the implementation of decentralized finance (BTCFi).

This means that Bitcoin can not only be used for payments, it can become a decentralized financial network, supporting automated asset issuance, decentralized trading, and even more complex contract execution.

If these assumptions hold true, Bitcoin Thunderbolt may not just be an accelerator for Bitcoin, but a "Layer 1.5"—achieving intelligence, scalability, and transaction acceleration without altering the underlying consensus of Bitcoin.

This new architecture makes people can't help but speculate:

Will Bitcoin Thunderbolt be the key to "smarter and faster" Bitcoin? How will it be achieved?

The values of Bitcoin: Something more important than speed

Returning to Bitcoin itself, when we talk about Bitcoin, what are we talking about?

The Bitcoin ecosystem has always been a slow and cautious evolution process.

For the Bitcoin community, 'speed' does not mean everything, 'decentralization, security' are the core values of Bitcoin.

This is also why Bitcoin's technological evolution is much slower than Ethereum's - every upgrade must go through rigorous review and consensus.

So, can Bitcoin Thunderbolt really be accepted by the Bitcoin community?

At present, it has at least several characteristics that conform to the Bitcoin concept:

1. Do not change the underlying consensus of Bitcoin: Thunderbolt does not require a hard fork, but operates based on the existing Bitcoin protocol.

2. Decentralized secure execution method: If BitVM is its core technology, then it will have decentralized computing capabilities instead of relying on centralized nodes.

3. Enhance the use of BTC as a financial asset: Through programmability, Thunderbolt may enable BTC to have a richer range of financial applications, rather than just value storage.

Whether Bitcoin OG can adopt this new technology may be one of the future challenges of Bitcoin Thunderbolt.

But as soon as lightning appears, thunder follows.

Ten years of thunder hidden, today the wind sings.

Bitcoin has been developing for 16 years. In 2015, Lightning; in 2017, SegWit; in 2021, Taproot; in 2023, BitVM. Each innovation represents a confrontation between old and new factions, a fierce battle between decentralization and scalability, and intense competition among solutions.

Bitcoin Lightning has been running for ten years, but has not yet achieved full success; Bitcoin Thunderbolt is rising with the momentum and should be the orthodox.

Though thousands of trials, though tiring, blowing away the wild sand, we finally arrive at gold.

Will Bitcoin Thunderbolt (Bitcoin Lightning Network) become the next key chapter in Bitcoin history?

Nubit co-founder Hanzhi revealed that the technical details of Bitcoin Thunderbolt will be announced at the ETH Denver conference at the end of February 2025, and BitVM founder Robin will also discuss on the same stage. At that time, more exciting details may be revealed.

We wait and see.