The Next Chapter in Topl’s Journey: Integrating With Bitcoin

As we’ve been on the road meeting with and growing our builder community these past months, we’ve received some insightful feedback about the progress happening within the broader web3 space, along with a strong desire from our Topl community to enhance cross-chain connectivity. There is a growing awareness that “no one can do it alone”. Motivated to make web3 more accessible, we’ve embarked on a journey to explore how Topl can complement existing protocols and advance our mission of positive impact.

Having carefully considered various options, we are thrilled to announce that we’ve chosen to connect Topl with Bitcoin as a Layer 2 solution. This decision opens up a world of possibilities, and Topl is poised to revolutionize the global digital economy. The next evolution of Topl’s blockchain technology, Topl Thunder, brings full functionality and scalability to the Bitcoin ecosystem. By unlocking new functionalities for Bitcoin, we’re empowering financial stability and growth in emerging markets where it’s needed most.

With its eUTXO ledger design, Thunder has the ability to offer direct support for and compatibility with the growing number of client-side protocols in the Bitcoin ecossytem such as RGB, Ordinals, and Taproot/Taro Assets. Developers will enjoy the same functionalities as existing and future standards, all with lower fees, higher throughput, and faster finality. Thunder will provide a flexible gateway to Bitcoin, empowering builders, creators, and individuals to effortlessly build their digital economies secured by Bitcoin.

Why Bitcoin?

The decision to transition Topl into the Bitcoin ecosystem does not diminish the centrality of the positive impact on our identity or priorities. While it will adjust our specific impact go-to-market, these adjustments will provide more focus and act as a springboard for Topl to grow in emerging economies. Moreover, Bitcoin’s huge ecosystem and centrality to web3 allow us to tap into a growing market.

Growth in emerging economies

Bitcoin is already making significant inroads in emerging markets. Looking to both the most exciting Bitcoin startups and adoption numbers, it’s clear that Bitcoin’s impact is and will continue to be most profound in developing markets with a pressing need for a new financial system. Worth noting is the fact that the top five countries with the highest rates of Bitcoin ownership are all categorized as emerging or frontier markets.

India, Brazil, Indonesia, and Vietnam alone boast more than 118 million current Bitcoin holders, dwarfing the numbers in the US, UK, Germany, and Japan, which together only have 28 million Bitcoin holders (via Coinshare).

In emerging markets, Bitcoin is a vital hedge against inflation. There are five countries where inflation exceeds 100% per year, with an additional nine countries experiencing inflation rates above 30%. These same countries lead the way in Bitcoin adoption. Moreover, Bitcoin’s utility as a tool for remittances is on the rise, with Bitcoin transfers accounting for over 6% of funds flowing through the world’s largest remittance corridor, the US to Mexico.

The adoption of Bitcoin in these global markets is part of a more significant trend that sees developing countries embracing financial innovation. They are transitioning away from large, state-owned institutions with close ties to the US dollar and leaning towards neobanks and culturally aware financing options with lower barriers to entry.

Bitcoin and renewable energy

While headlines often highlight Bitcoin’s electricity consumption, providing the broader context to understand its carbon impact is essential. When we compare Bitcoin’s annual consumption of approximately 100 terawatt-hours to the data centers of the top 100 banks, which consume over 230 terawatt-hours annually, Bitcoin appears in a more favorable light. Moreover, if we think about Bitcoin as “digital gold”, it’s natural to ask about the energy consumption of mining this more traditional precious metal. The annual energy used in gold mining and processing is roughly 240 terawatt-hours, without considering the environmental impact of deforestation at mining sites.

Bitcoin’s unique energy usage also has the potential to benefit the energy grid, especially as we face increasing strain from climate change and the shift to renewable energy sources. Bitcoin miners represent a highly adaptable portion of the electrical grid’s user base. They can be powered down and brought back online quickly without complications. This elasticity is a significant advantage for electrical grids, as demonstrated during the Texas winter storms when Texas Bitcoin miners proactively reduced energy consumption by 98–99% to support the grid.

Bitcoin as an accelerant for Topl

Many of the use cases that Topl envisions, such as impact markets, alternative credit scoring for farmers, and community currencies, all share a common need: liquidity and market infrastructure. To enable users in emerging countries to buy or sell impact tokens or ethically sourced commodities, we need to generate demand for these assets and establish financial conduits for seamless funds movement.

By connecting to Bitcoin as a blockchain, we are also embracing Bitcoin as an asset. This integration unlocks a wealth of liquidity, on-ramps, off-ramps, and a broad market infrastructure that will empower Topl to source, transfer, and onboard/offboard value into the hands of those we aim to uplift and empower.

What does this mean for our community?

We stand on the brink of a transformative era for Topl. Best of all, our transition to connect with Bitcoin does nothing to impact the development or use of the Topl protocol. All functionality and integrations will continue as planned. Our network upgrade and token launch are still scheduled for the end of this year.

The journey ahead promises innovation, growth, and countless opportunities for our whole community. The only impact developers will see is the opportunity to begin integrating with Bitcoin in their own applications and projects starting in the first quarter of next year. This will bring a lot of exciting possibilities for everyone, not just in being able to use Bitcoin as an asset but also to tap into a larger, globally diverse community.

Thank you for your continued trust, support, and passion. Stay tuned for more updates over the coming weeks as we roll out a comprehensive timeline and additional details regarding this exciting transition. Join us on Discord to be a part of our next chapter and share your feedback with us!