From Payments to Smart Contracts: The RGB Protocol Opens a New Journey for Bitcoin Web3

The Bitcoin network has developed over more than a decade and has become the preferred foundational currency layer of the Web3 world. While ensuring decentralization and security, Bitcoin continuously enhances its privacy protection capabilities through technologies such as Schnorr signatures and Taproot, laying the groundwork for future innovations. However, blockchain technology still faces the impossible triangle dilemma, which limits large-scale applications.

In this context, the Bitcoin Layer 2 protocol RGB is gradually maturing and is expected to break through technical limitations. RGB combines the characteristics of Bitcoin as a monetary layer with the flexibility of smart contracts, allowing for the creation and management of various assets on the Bitcoin network, enabling broader financial and application innovations.

The core of the RGB smart contracts lies in ownership management and state verification. It controls the transfer of rights through Bitcoin scripts and one-time sealing mechanisms, ensuring that each transfer complies with validation rules. This innovation injects new vitality into the Bitcoin network and is expected to drive the development of the Web3 ecosystem forward.

The development of the LNP/BP protocol and RGB has formed a layered structure similar to TCP/IP, organically integrating the currency layer, protocol layer, and application layer. This brings more second-layer solutions to the Bitcoin network, enhancing transaction speed and privacy protection, while supporting richer smart contracts functionalities.

In the future, as these technologies mature, we can expect to see the widespread adoption of decentralized finance, as well as the emergence of diversified Web3 applications such as blockchain games and on-chain social applications. The RGB protocol opens up new possibilities for Bitcoin and is expected to drive a more open, inclusive, and innovative Web3 future.