50 Shades Of Native Bitcoin YIELD 🟧₿+ [ Lightning / Liquid / Botanix / Sequentia ]

Video Transcript:

Hello there and welcome to the Hash Power Academy, your place to learn anything to do with Bitcoin. The topic of today’s video starts with a very important message. There is only one native Bitcoin yield and that is producing freshly mined blocks. Everything to do with the discussion of layer 2s which operate on top of the blockchain or even the layer 1 being this most fundamental discussion of how we add blocks to the chain the native issuance and settlement of transactions and creation of that last million bitcoin 1.1 million bitcoin to be mined and also we can include side chains into this so that interoperability that all these different new developments on top of bitcoin’s blockchain is going to have in the future. These are critical and the discussion behind it is of course native Bitcoin yield ways of creating cash flows whether it’s within Bitcoin or fiat cash flows which are converted into Bitcoin in the context of Michael Sailor. So what we’re going to discuss here is yes, Bitcoin mining is the most native intrinsic way of creating Bitcoin yield. But the struggle here is that there are particular chains and marketing communications discussing some way of creating natural Bitcoin yields, which is some form of wrapped, staked, pegged version of cash flows in a quantity of SAT that’s not natively BTC. Why? Well, I’ll take the example of lightning to begin with. We’ll discuss a few other chains as well. Lightning is multi-IG channels, which is you use the layer 1 blockchain to connect Bitcoin in channels with other people. And so the Bitcoin sits in the layer one because it never moves. But the layer 2 is this sort of transactional relationship that you have with another entity in this upper layer. and the lightning network. Think of the way that lightning sort of hits the ground. It’s finding the shortest path to strike the ground by using the least amount of energy. It’s almost like how water flows down a hill. Now, what it’s doing is finding that path of least resistance through the lightning network to allow your funds to move through the network in the cheapest way possible, quickest way possible. And there’s some few failures in there of invoices not working or the payment fully not rooting to who you’re trying to send it to. So the nativity aspect there is that there are yield sources particularly with lightning which is running a lightning node but it’s very nominal amounts because there’s different payments being rooted through your node and maybe you’re collecting a small fee. So that is the closest layer two way of creating yield but it’s so nominal in comparison to other ways of creating bitcoin yield. The next one I will discuss is liquid which is a federation and it’s a side chain and they have their own address format. So there’s no native aspect of yield in this. There is probably products, market, services being built within the liquid ecosystem which you can earn their wrapped version of Bitcoin and peg it back out into Bitcoin. So there’s ways of creating yield or accessing different things that create yield, but it’s not native. It’s not natural. Where should we go to next? Botanics. This is a new form of EVM layer 2, which is right here. And EVM is that translation across from Ethereum and the all different aspects related to complexities of transactions and a virtual machine which there is going to be ways of DAPs and different tokens and all other different things being built in that higher layer which will create yield but again it’s not native for the particular reason that the Bitcoin that you may earn in that layer two is not in the same address format of Bitcoin’s layer one. Not native, not really yield. It’s external yield sources. It’s the biggest question and the biggest failure in the dangers of several years going back into all different projects that tried to create Bitcoin yield, which is they blew up because the true question to ask is what is your yield source? Where should we go to next? Sequentia. This is an interesting one that I’ve just recently learned about. And Sequentia is essentially a side chain. So it has communication with liquid and lightning, but also that communication with layer 1, which they uniquely have, which is they have the same address format as Bitcoin’s layer 1. Now the reason why I was looking at these particular projects is because um well I’m developing my own form of platform which allows people access into Bitcoin mining in a very accessible way. And the biggest struggle that I have is I have freshly mined Bitcoin from Bitcoin mining coming out in the layer one. Bitcoin’s blockchain freshly mined. I have to distribute that to all the different users and owners of the hash rate. And what that means is if I used any form of layer 2 or side chain or anything EVM, I have to wrap, stake, tokenize the Bitcoin into their particular ecosystem to distribute and account all of the different payouts of Bitcoin to those users. Now, I don’t want those potential vulnerabilities in the process. I’d like to distribute out to layer 1 wallets. So the closest one is actually sequential but the the long-term path to putting hash rate on chain in that sort of way is quite a challenge and quite an interesting journey for me to delve into. Um but yeah the overall gist of this particular video is to just explore that idea that yes there is going to be different communications out there from different projects talking about Bitcoin yield because traditional finance is trying to create cash flows of Bitcoin. People loan against their Bitcoin to access cash. It’s not creation of cash flows from some form of external yield source, but even lending Bitcoin to create some small amount of interest as well. There’s people taking all different risks and trying to gain different reward rewards because we have this asset which does have a compound annual growth rate that people quote at say 30% a year, but it’s volatile as well. So everything has their tradeoffs. Yeah, this is a an interesting sort of video to to explore these different ideas because of all the different subject areas of energy, electricity, mining, hash rate, the blockchain and Bitcoin. The blockchain is the particular one that uh if I was to say which one I haven’t studied the most, it would be the nittygritty deep diving into the code side of things and all the different op codes. And yeah, the path for me is to to learn about them as well and be on that educational journey also. And well, what I learn I will pass on to you. Thank you for listening and I will see you in the next video. Goodbye.