It feels like nearly a lifetime ago now that Ordinals were making headlines and stirring up all sorts of arguments about how to use block space; while the debates raged on for a brief moment in time, fees were astronomically high, making the base chain unusable for the average person.
If you wanted to spend Bitcoin, you were relegated to side chains or the Lightning network, and even then, you still might have issues since the price to peg into a side chain or establish a Lightning channel would make for an expensive startup cost.
As standard transactions were pushed to other layers, the base chain was filled with NFTs, BRC-20 token minting, transfers and more of these meta-protocol transactions. It left these Ordinal users competing with each other for block space, and boy, did they run up quite a bill with miners absolutely loving the premiums they were netting.
But manias don’t make a market, and eventually, the bidding war for block space slowed down, leaving many speculators spending thousands on Bitcoin fees only to be left with useless metadata with no bid to sell into; the cycle rugging was complete.
Since then, it’s been pretty quiet on the Ordinals front as the market seeks out a new narrative to drum up excitement and liquidity. Out of that desperation, we’ve seen so many self-proclaimed L2 projects rolling out the red carpet for the next round of speculation.
One such development is Fractal Bitcoin, a new Bitcoin “side chain” that recently deployed its mainnet.
What is Fractal Bitcoin?
Fractal Bitcoin is a new side chain designed to extend the capabilities of Bitcoin by leveraging advanced cryptographic techniques and unique consensus mechanisms.
A side chain is a separate blockchain linked to a main chain (in this case, Bitcoin) through a peg-in system. Other side chains offer two-way peg-ins like Rootstock and its pow-peg method or a one-way peg like the Liquid Network.
The peg-in system allows Fractal Bitcoin users to peg in Bitcoin and assets created using meta protocols like BRC-20 tokens or Runes. This allows the token metadata to be transferred between the main chain and the side chain, effectively enabling new features and functionalities without altering the core protocol of the main chain.
Its architecture promises reduced block confirmation times to 30-60 seconds and efficient network load management.
As a nod to the base chain and orange washing the new network, the genesis block of Fractal carries the same message found in Bitcoin’s first block:
“The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.”
Fractal tokens..bleh
When I started reading through the documentation, I had a little hope for Fractal; even if the technical explanations were a little sparse, we’d always see what they had to offer once Mainnet launched.
I was rooting for you, but when I got to the part where they’re launching their own token, I was immediately put off by the entire idea.
In my eyes, this just became a Stacks remora chain with an OP_CAT-enabled fork Bitcoin Core instead of an EVM.
Like every other blockchain around, issuing another token makes no sense for the economics of the chain other than selling it to the open market and getting instant exit liquidity without having to prove a use case or garner market demand that will generate regular income.
Apparently, there will be a distribution of the 210 million tokens as follows: miners will receive 50%, the ecosystem will retain 15% as treasury, and 10% will go to community grants. The project also plans a presale of 5% of the tokens, with a lock-up period to ensure initial network stability.
OP_CAT
Fractal also introduced support for OP_CAT, a controversial opcode enabling limited smart contract functionality on Bitcoin that was disabled by Satoshi Nakamoto in 2010.
While Nakamoto expressed concerns regarding potential attack vectors targeting the opcode, there has been renewed interest in having it enabled on the base chain once again.
Now, getting an upgrade on the base chain is easier said than done and can take years, so pushing OP_CAT on Liquid and Fractal can prove to be a breeding ground for innovation and prove its use case.
Core Features of Fractal Bitcoin
Fractal claims that it would launch some multi-layered ecosystem that would use Merkle trees to group and aggregate more transactions; from the documentation, they don’t really explain how it would all work, and from what we can see from the main net, so far, it hardly seems like all that big a change from just adding merged mining to Liquid.
Once you get through all the technobabble of virtualization” and “recursively” “scaling in layers”, it doesn’t seem to be anything more than another fork of Bitcoin.
Core contributors to the project include UniSat Wallet and blockchain development firm Block Space Force.
Scalability Enhancements
Like any so-called scaling solution, Fractal claims that it can produce faster blocks at a cheaper cost to the user than the base chain, so in theory, it could be used for commerce as we see with Lightning, but that doesn’t seem to be the primary focus based on the marketing.
One of the motivations behind Fractal Bitcoin is to address Bitcoin’s scaling issues when it comes to stuffing metadata into blocks. While Bitcoin remains a robust and secure network, its transaction throughput is limited by block size and block time and will likely still be plagued with metaprotocol token creation.
Fractal aims to move the post-minting action, such as trading and transforming into its layer, and mitigate competition for block space with various metaprotocol users.
Cadence Mining
Cadence Mining is another one of the chain’s barely differentiating factors; it’s a play on the usual merged mining, where miners safeguard two blockchains at once; this method spaces out block rewards, enabling miners to mine Fractal Bitcoin blocks every third block.
Innovation and Development
Fractal will have its work cut out for it in differentiating itself from other faux L2s and smart contract chains where degens can do their trading. Fractal has also partnered with UniSat and OKX to launch the Fractal Mainnet Bootstrap Program, rewarding active users and developers willing to port their projects over to Fractal or enable Fractal support.
Challenges with Bootstrapping Another Network
Honestly, Fractal looks like another fork of Bitcoin, which has even less of a cult following than BCH and BSV, and if their track record is anything to go by, then Fractal native coin will be trending down as the pre-mine holders dump their allocations over time and the merged miners try to dump their rewards into any buying demand that can be generated by the projects using this chain.
Security Risks
As with any new chain, there are potential security risks associated with Fractal Bitcoin. Ensuring the side chain is secure and resistant to attacks is crucial for maintaining user trust and network integrity since I doubt many will be running any node to verify the various layers that will make up fractal.
Additionally, will Fractal be able to maintain a meaningful amount of hash rate that would protect it from 51% attacks?
I don’t know, and honestly, I don’t care!
Adoption and Integration
The success of Fractal Bitcoin will depend on its ability to gain adoption with the Ordinals community as its base and later try to attract those who have been degen trading and memecoin shilling on other smart contract chains. It’s a pretty fickle audience to target and one that tends to chase liquidity rather than functionality, so it will be an uphill battle for Fractal to try to attract and keep these users over a long enough time frame.
Fractal or Fickle?
Do I have any interest in what Fractal has to offer? Not really, no, they’re catering to a niche, and more power to them; if Fractal can corner the market on meta-protocol activity and abstract more of the activity into these other environments, it just means less competition for base chain block space and fewer chances of random trends clogging up the mempool.
Selfishly, I am all for it; if these transactions no longer affect my need for block space, why wouldn’t I?
If willing market participants want to engage in speculative trades on meme coins or runes or whatever keeps them entertained, that’s their choice.
Knock yourself out.
It will be interesting to see if activity on Fractal will generate any meaningful amount of fees for miners willing to merge mine these blocks and whether they can honour their claim as an additional income stream for the Bitcoin network, as many Ordinals promotors claimed during its founding.
As with any new technology, I recommend approaching it with caution. Like any new ecosystem, we have no track record to look to, and the real battle comes when you open it up to public scrutiny.
If you do want to use this layer, don’t put in more than you’re willing to lose; just because a main net is launched doesn’t mean all the bugs have been figured out, and pushing live to a world where real money is on the line, will attract interested parties who will take the time to try and break it for a piece of the TVL locked in the ecosystem.
Do your own research.
If you want to learn more about the fractal network, use this article as a starting point. Don’t trust what we say as the final word. Take the time to research other sources, and you can start by checking out the resources below.
