Charles Hoskinson, the founder of Cardano, and Muneeb Ali, co-founder of Stacks, recently engaged in a debate on Twitter about the potential and limitations of Bitcoin’s layer-2 (L2) innovations, particularly in comparison to networks like Cardano and Ethereum.
Hoskinson argued that Bitcoin’s architectural limitations make it impossible for it to support a vibrant L2 environment. He pointed out that Bitcoin cannot change enough to support the things required for L2s, such as:
- Secure L2s
Hoskinson also criticized the practical aspects of implementing L2 solutions on Bitcoin, stating that they often require centralized or federated infrastructure to operate, which contradicts Bitcoin’s decentralized ethos.
Ali countered Hoskinson’s arguments by mentioning BitVM, a new technology that allows new functionalities at the L1 to be deployed, with further upgrades being handled at the L2 level. He asserted that BitVM does not require any changes to Bitcoin and that it resolves the critical issues of transferring BTC in and out of L2s with practical latency and a 1-of-n honest assumption.
Hoskinson remained skeptical of BitVM, arguing that it is essentially “new paint on old ideas.” He raised concerns about long finality windows and optimization trade-offs when involving fraud proofs in such systems.
The debate between Hoskinson and Ali highlights the ongoing discussion about the potential and limitations of Bitcoin’s L2 innovations. It remains to be seen whether other voices from the Bitcoin L2 community will contradict Hoskinson’s claims.