BitcoinBitcoin remains a network with greater value than all other crypto assets combined, maintaining overwhelming dominance in both market share and mining scale. Beyond the “digital gold” narrative, Bitcoin has become the first digital asset considered by global capital and the top priority for institutional adoption. For new Layer-1s, growth strategies must not only involve competing for existing capital or attracting new inflows, but also addressing the most challenging yet most powerful path: capturing Bitcoin’s immense pool of capital.
This is where Arch Network stands out. Arch is a Turing-complete smart contract platform that enables direct use of Bitcoin without bridges. Through a stack of technical layers—including ArchVM, DAG, dPoS, FROST/ROAST threshold signatures, and the Titan Indexer—it achieves scalability, speed, and security simultaneously. Most importantly, Arch provides a Bitcoin-specific system call layer that allows developers to natively perform functions such as UTXO creation and validation, Taproot signing, PSBT assembly, and L1 broadcasting directly within the VM. In doing so, Arch positions itself as the only network that can leverage Bitcoin without bridge risks, while delivering a user experience comparable to Solana.
Arch is more than just a layer for utilizing Bitcoin assets—it also contributes to the long-term sustainability of the Bitcoin network itself. Once all BTC has been mined, the network will rely on transaction fees for survival. If Arch grows to the scale of regularly generating trillions of won in transaction volume anchored to Bitcoin, it will provide miners with a stable source of fee revenue and reinforce Bitcoin’s permanence. In essence, Arch re-emphasizes Bitcoin’s fundamental value as a network, expanding its original utility as a censorship-resistant, decentralized consensus system.
In the blockchain industry, we often forget just how immense an asset Bitcoin is and the scale of the economy surrounding its network. While the broader crypto market continues to grow and projects are emerging with funding rounds ranging from hundreds of millions to billions of dollars, it is worth remembering that the combined value of all other crypto assets still falls short of Bitcoin’s value alone. The Bitcoin dominance metric, closely watched by many traders, is not just a number—it’s a key indicator of the proportion of the total market value that belongs to Bitcoin. A dominance rate above 60% means that more than half of all capital in this market is concentrated in Bitcoin.
In terms of market size, Bitcoin’s presence is overwhelming. According to research by Chorus One, the Proof-of-Stake (PoS) blockchain validator market is valued at around $800 million, whereas the Bitcoin mining market stands at approximately $16.8 billion—a gap of more than twentyfold. Even though Ethereum has transitioned from Proof-of-Work (PoW) to PoS and numerous PoS networks have emerged, Bitcoin’s absolute dominance remains unchanged. In particular, with the recent rise of Digital Asset Treasury (DAT) strategies, Bitcoin has consistently been the top choice for publicly listed companies looking to accumulate digital assets. This trend is likely to continue for the foreseeable future.
In this landscape, there are essentially three strategies a new Layer 1 can use to grow its market share: (1) attract new capital that does not yet exist in the crypto market, (2) capture capital already held by other networks, or (3) find a way—despite technological and ideological barriers—to absorb Bitcoin’s capital, which is by far the most difficult to acquire. Most new Layer 1s today focus on the first, the second, or a hybrid of the two. However, when it comes to Bitcoin’s market, most networks that have claimed to “utilize Bitcoin” have either been exposed to bridge-related risks or have suffered from poor usability (due to speed or UX limitations), leading to adoption failures. For Bitcoin holders who want to take on zero risk with their BTC, having to use a bridge is simply too big an ask.
This is why we need an alternative that keeps Bitcoin exactly where it is—secure on its own network—while delivering a user experience comparable to Solana. One might ask, “How is that even possible?” The answer may lie in just one network capable of achieving this goal: Arch Network. In this article, I will introduce the concept and mechanics of Arch Network, its philosophy, and the key points to watch as it approaches and moves beyond mainnet launch.
Source: Arch Network
You can think of Arch Network, put simply, as a Turing-complete smart-contract platform that lets you use Bitcoin on the Bitcoin network directly—without a bridge. Because Arch doesn’t rely on bridges, there’s no need to wrap assets, and you can access it straight from existing Bitcoin wallets (Xverse, Unisat, Ledger, etc.).
This architecture offers several advantages. First, it’s free from bridge-related security flaws. A large share of the industry’s biggest exploits—Ronin Bridge, Wormhole, Poly Network—originated in bridges. Being able to use BTC without a bridge is therefore a major security win.
Second, liquidity. Today there are dozens of wrapped-BTC variants (roughly ten major ones and 30+ if you include long tail). Most are siloed from one another because they differ by issuing network, issuance model, and token standard. This fragmentation means the underlying “Bitcoin” cannot be fully and natively utilized.
Finally, there’s no trust assumption. If you don’t use a bridge, you don’t have to trust a third party, which puts Arch in a far better position to win over conservative institutional investors and the Bitcoin community.
Of course, Arch isn’t the only project aiming to use Bitcoin without bridges. So why focus on Arch specifically? The answer lies in its architecture. Let’s walk through how the network is built and examine the details, step by step.
One of Arch Network’s key differentiators—and the first thing you should know about it—is its unique virtual machine environment, ArchVM. ArchVM is a fork of the eBPF (extended Berkeley Packet Filter)–based VM used in Solana, which can handle far more computational operations than the EVM and prevents unsafe memory access or infinite loops through pre-execution verification. It fully supports the Rust and SBF (Solana Bytecode Format) development environment, while adding Bitcoin-specific system calls (such as UTXO creation and validation, Bitcoin Script execution, Taproot signing, and L1 broadcasting) to ensure compatibility with the Bitcoin network. Thanks to these Bitcoin-specific syscalls, Arch can directly utilize Bitcoin network assets without bridges (we’ll explore exactly how Arch achieves bridge-less Bitcoin utilization in detail later, when we discuss the full architecture).
Among ArchVM’s many features, the most interesting is its built-in DAG (Directed Acyclic Graph) logic. The DAG analyzes UTXOs in Arch transactions in advance to determine whether there are dependencies between them. Arch introduced DAG because Bitcoin’s UTXO model follows two basic rules:
Transactions using different UTXOs are independent and can, in theory, be executed in parallel. (In practice, Bitcoin cannot process them in parallel because its consensus and validation are implemented sequentially.)
If a transaction consumes a UTXO created by another transaction, they must be executed sequentially.
With DAG, Arch can parallelize the execution of transactions without dependencies and process dependent transactions in the correct order. But DAG’s real significance goes beyond parallel execution—it’s also what enables pre-confirmations and partial rollbacks in the event of Bitcoin reorgs.
1.1.1 Pre-confirmation
On the Bitcoin network, a transaction only achieves finality after it’s included in a block and at least one more block has been mined—most participants consider six blocks (~60 minutes) the safe zone. This makes it hard to give users the experience of “instant finality” for payments or asset transfers.
Arch leverages DAG to mitigate this issue. Because the DAG has a precise map of transaction dependencies, conflict-free transactions with a clear execution order can be executed at the Arch level before they’re included in L1, and their results can be shown to users as a soft confirmation (pre-confirmation). This allows users to get near-instant feedback, as if the transaction were finalized in real time. While pre-confirmations are “almost final,” they can still be revised if an L1 reorg occurs—but thanks to DAG, these revisions can be applied with high precision. This means Arch can deliver near-instant transaction processing in a way that other Bitcoin-utilizing networks cannot, which is a major improvement in user experience.
1.1.2 Partial Rollback
Partial rollbacks are another advantage. On Bitcoin L1, reorgs occasionally happen—when a block is removed from the chain, all transactions inside it are invalidated. Most blockchains handle this with block-level rollbacks, reverting and re-executing all transactions in that block.
Arch’s DAG allows for more surgical handling. Since DAG knows exactly which transactions depend on which, a reorg triggers rollbacks only for the affected transactions and their dependent transactions. All other independent transactions remain untouched. Rolled-back transactions can then be re-applied in the correct DAG order. This minimizes unnecessary reprocessing, preserves user experience, and maintains data consistency.
Through this architecture, Arch Network enables the use of Bitcoin assets without bridges—while giving users fast, seamless experiences for a wide range of activities. This is why Arch has the potential to stand out in the Bitcoin ecosystem. So, how exactly does Arch’s consensus mechanism work?
Arch Network’s consensus architecture can be broadly divided into two stages. The first is the Arch-level consensus that takes place within the Arch Network itself. The second is the process of committing the finalized results to the Bitcoin L1 blockchain. This dual-layer structure allows Arch to achieve speed and flexibility through its own consensus, while leveraging Bitcoin L1’s consensus for ultimate security. Users benefit from fast transaction processing at the Arch level, followed by Bitcoin L1 confirmation for final, immutable settlement. (The mechanism that enables rapid response at the Arch level has been covered in detail in the earlier Pre-confirmation section.) In short, Arch uses this architecture to combine high performance and flexibility with Bitcoin’s security guarantees. Let’s break down each stage.
1.2.1 Arch’s Consensus
Arch-level consensus operates on a delegated Proof-of-Stake (dPoS) model. In dPoS, token holders delegate their stake to trusted representative validators, rather than participating directly as validators themselves, and these representatives are responsible for block production and consensus. In Arch, leaders are selected for each epoch or fixed time interval based on stake weight, with backup leaders designated for each slot to maintain network reliability.
Once elected, the leader collects pending transactions from the mempool, rigorously verifying each for signature validity and compliance with protocol rules. Verified transactions are then ordered either by first-in, first-out (FIFO) or according to an optimized ordering strategy, and a new block is assembled. This block includes the previous block hash, a timestamp marking its creation time, and a list of transaction IDs. The completed block is broadcast to the entire network.
Validators receiving the new block immediately begin the validation process. They confirm that the block was produced by the designated leader, check the block header format and timestamp validity, and verify all transaction signatures. They then execute each transaction and confirm that the resulting UTXO states are correct, ensuring all state transitions comply with protocol rules. Once verified, each validator uses their secret key share to sign the block hash and all Bitcoin transactions derived from that block, broadcasting their signature shares across the network.
1.2.2 Finalization on Bitcoin
When signing transactions, Arch validators use threshold signatures rather than simple multisig, combining two core protocols: FROST and ROAST.
FROST (Flexible Round-Optimized Schnorr Threshold) is an advanced threshold signature scheme in which each participant generates a partial signature from their unique secret key share. These partial signatures are aggregated into a single Schnorr signature. FROST supports t-of-n signing, enabling a valid signature with only the threshold number of participants, even if others are offline. It can operate in a single signing round in optimal conditions or two rounds in standard conditions. While designed for efficiency under the assumption that all signers are honest, it also includes safeguards to detect and mitigate malicious behavior. This flexibility makes it applicable to everything from cryptocurrency transaction signing to secure consensus in distributed systems.
ROAST adds a robustness layer to FROST, enabling multiple concurrent signing sessions so that even if some fail due to malicious actors or network issues, the remaining sessions can still produce a valid signature. It can automatically identify and exclude malicious nodes, ensuring the signing process completes safely even under network delays or validator failures.
The resulting single Schnorr signature, when viewed externally, appears to be produced by one key, but in fact is composed of key shares from multiple validators. This valid signature can control a specific Bitcoin network address, allowing the L1 Bitcoin transaction created by Arch to be submitted to the Bitcoin network. Once the transaction is included in a Bitcoin block, the Arch transaction attains full settlement finality. (Note: Between Arch-level finality and L1 settlement finality, there is also a pre-confirmation stage enabled by the DAG logic within ArchVM, which is not covered in this section.)
In summary, Arch combines a dPoS consensus architecture with DAG logic in ArchVM to determine and execute transaction ordering quickly and flexibly, while using FROST/ROAST-based threshold signatures to securely commit results to Bitcoin L1. This allows Arch to directly utilize Bitcoin L1 assets without bridges, achieving both high speed and strong security.
Source: Arch Blog
We have so far explored how Arch Network can directly utilize assets on the Bitcoin network without bridges, using Bitcoin as its settlement layer while maximizing scalability at the network level. But no matter how fast and efficient Arch may be, without strong security, it will never earn the trust of users and builders. For example, as mentioned earlier, with transaction pre-confirmations, even if a transaction is pre-confirmed on Arch, it could still be rolled back if it is not finalized on Bitcoin. The question then becomes: on what basis can users trust a pre-confirmation? In the end, Arch must be able to minimize the rollback probability of pre-confirmed transactions in order to be trusted. To achieve this, beyond the execution and consensus layers described above, Arch has built a dedicated security infrastructure: the Titan Indexer.
1.3.1 The Heart of Arch Network Security: The Titan Indexer
The Titan Indexer is a core component that enables real-time L1 data synchronization and security response in Arch’s settlement-layer architecture with Bitcoin. Unlike Electrs or standard Bitcoin indexers that operate at the block level, Titan supports mempool-level indexing and protocol-specialized data processing. This provides real-time data and event feeds that allow Arch’s DAG-based execution environment and pre-confirmation mechanism to operate reliably. Its key features include:
Real-Time Mempool-Level Indexing
Titan indexes all transactions before they are included in a Bitcoin block, in real time. This enables Arch to assess the likelihood that transactions marked as pre-confirmed (as described earlier in the DAG section) will actually be confirmed quickly at L1.
Runes Protocol Support
Titan natively supports Bitcoin’s Runes protocol. This means it can track and index native token issuance and transfers on Bitcoin in real time, allowing Runes-based dApps or token projects to query state quickly and securely. Runes balances, transfers, and issuance events are provided in a standardized API format, greatly improving developer experience.
Beyond these, Titan offers far superior query performance compared to conventional indexers, real-time data accessibility, and interfaces optimized for Arch Network. This not only enhances developer productivity but also helps ensure the accuracy of pre-confirmations—one of Arch’s most important features—making Titan an essential layer in Arch’s architecture.
Having examined the architecture of the Arch Network in its entirety, let us return to the original question: How can Arch Network utilize assets on the Bitcoin network to build diverse applications—without relying on a bridge? To understand this, two core concepts must be considered together: the Threshold Signature mechanism, previously discussed, and the Bitcoin-Specific Syscall Layer.
First, the Bitcoin-Specific Syscall Layer goes beyond simple data retrieval. It is designed to allow all core operations possible on Bitcoin L1 to be invoked and executed directly at the VM level. Specifically, it supports create_utxo() and verify_utxo() for UTXO creation and verification, exec_script() for executing Bitcoin scripts (OP_CODES), sign_taproot() for generating Taproot/Schnorr signatures, build_psbt() for assembling PSBTs, and broadcast_l1() for broadcasting transactions to Bitcoin L1. This syscall layer is not only the “eyes and ears” that read the Bitcoin network state, but also an execution toolkit that handles transaction creation, script execution, signature requests, and broadcasting. However, an additional security layer is required before any of these execution commands can actually be carried out.
This is where the Threshold Signature mechanism comes in. In Arch Network, Bitcoin assets are not protected by a single private key; instead, they are secured by secret key shares distributed among the network’s validators. When a Bitcoin-related transaction needs to be executed, the Arch chain’s consensus outcome is passed directly to the signing protocol. A valid Taproot/Schnorr signature is produced only when at least m out of n signers participate. This method enables Bitcoin assets to move only under Arch consensus, eliminating the need for centralized custody and greatly reducing single points of failure, as well as risks from hacking or insider compromise.
As a result, developers can integrate native Bitcoin assets into a wide range of financial services—collateralized lending, derivatives, swaps, payments, and RWA tokenization—without using a bridge or centralized custodian. For example, in the case of BTC-collateralized lending, ArchVM verifies the UTXO’s ownership and lockup conditions, locks the collateral, and releases it upon repayment—all within the Arch environment. This combines the security of Bitcoin L1 with the high-performance execution environment of ArchVM, delivering a level of speed and user experience previously unattainable in the Bitcoin ecosystem.
We’ve looked at the technical architecture of Arch Network and how it enables bridge-free Bitcoin utilization while maintaining high scalability. But perhaps even more important is the activity happening within that environment—how many builders are actually creating products, whether those products are functioning as intended, and whether the “ideal developer environment” Arch promises is truly being delivered to live applications.
So next, we’ll highlight some of the key ecosystem players, even at this testnet stage, and sketch a rough picture of how the network could grow after mainnet launch.
Saturn is the first decentralized exchange (DEX) on Arch Network’s testnet to implement a reliable Automated Market Maker (AMM)-based swap, supporting Bitcoin-native asset trading without bridges. It provides foundational liquidity pools (LPs) for Bitcoin-native assets such as Runes tokens (BDC, PUPS, etc.) and ensures interoperability with other dApps through ArchVM’s cross-program invocation feature. Since its launch in December 2024, Saturn has processed millions of transactions, serving as a central liquidity hub for the early stages of Bitcoin DeFi. As a core application frequently highlighted in Arch’s official communications, it also offers XP points through testnet missions.
Autara Finance is a Bitcoin-native money market protocol built on ArchVM, designed to allow users to supply BTC and supported assets to earn interest or borrow instantly using them as collateral. It operates directly on the UTXO model without bridges or wrapped assets, managing each asset in isolated pools to mitigate risk. Market designers can build their own oracle stacks, ensuring reliable price feeds. With dynamic liquidation mechanisms, open-source transparency, and audit-based safeguards, Autara strengthens protocol security while driving Bitcoin liquidity inflows and capital efficiency within the Arch ecosystem.
Bump is a Bitcoin-native token launchpad designed for fast, transparent, and fair project launches. Created by a team with a proven track record of running successful launchpads on Solana, Bump brings expertise in liquidity bootstrapping, community distribution, and anti-bot protection to Bitcoin. Projects raise capital through a bonding process; once complete, Runes tokens are automatically minted, and a liquidity pool is instantly created on Saturn DEX, providing immediate tradability and liquidity. Through Bump, a wave of meme tokens is expected to emerge within the Arch ecosystem.
VoltFi is a next-generation derivatives trading platform built on Bitcoin, focusing on volatility forecasting, options trading, and hedging products. Leveraging Arch’s parallel execution engine and the Titan Indexer, it processes real-time mempool data to deliver high-speed, low-cost derivatives trading without settlement delays.
At the testnet stage, VoltFi recorded over 59,000 transactions and more than 13 BTC in trading volume, proving the demand for Bitcoin-native derivatives. Its flagship product is Bitcoin’s first VIX token, mirroring the role of the VIX index in traditional finance by allowing traders and hedge funds to hedge against or speculate on Bitcoin’s volatility. Going forward, VoltFi plans to expand beyond the VIX token into a broader range of hedging and trading instruments—structured products, covered-call strategies, and volatility swaps—positioning itself as the core venue for advanced derivatives strategies on Bitcoin and a future full-spectrum derivatives hub for professional traders and institutions.
SatoshiBet is a fully on-chain Bitcoin-native casino built on Arch Network, where all betting, settlement, and payouts are executed directly on Bitcoin. Game logic runs on Arch’s high-speed, scalable architecture, with outcomes and payouts anchored to the Bitcoin blockchain for maximum transparency and security. Players can connect their wallets and play instantly—no centralized servers, intermediaries, or accounts required. All game odds and results are verifiable on-chain.
Originally launched as Doubleup.Fun on Sui Network, SatoshiBet expanded to Bitcoin to leverage its native liquidity. Its core UniHouse Protocol allows users to stake BTC and participate both as “players” and as the “house,” earning a proportional share of actual game revenue. Available games include blackjack, roulette, coin flips, and Bitcoin-exclusive titles, all with real-time pool performance dashboards and epoch-based withdrawal systems.
Unlike traditional crypto casinos, SatoshiBet operates without token issuance or inflation—all rewards come solely from actual game revenue, fully settled on Bitcoin L1. This creates a genuinely decentralized casino experience with uncompromising fairness and transparency.
Ordeez is a BTC yield application introducing BNPL (Buy Now, Pay Later) functionality for Ordinal assets. It leverages DAG logic for transaction dependency management and integrates Arch’s partial rollback feature to ensure system stability. Ordeez features prominently in testnet missions around Ordinal trading and is positioned as a native financial tool for expanding the Bitcoin NFT and Ordinals market.
ChaChing is a lending protocol combining P2P lending and swap functionality, enabling instant loans against Bitcoin-native collateral. Optimized through ArchVM’s UTXO-aware sequential and parallel processing, it has already processed millions of transactions on testnet. With its bridgeless architecture minimizing security risks, ChaChing is recognized as one of the core DeFi infrastructure protocols within Arch. To date, it has handled more than 2 million testnet transactions, showcasing strong early traction.
HoneyB is one of Arch’s flagship dApps, aiming to bring a wide range of Real-World Assets (RWAs) on-chain—from gold and other traditional commodities to tokenized private credit and structured yield products. Its vision goes beyond asset digitization, establishing institutional-grade infrastructure for issuance, settlement, and compliance.
HoneyB partners with Chintai, a proven institutional RWA platform, to deliver lifecycle management, regulatory compliance, and settlement infrastructure. By combining Arch’s execution model with Chintai’s infrastructure, HoneyB provides robust security and credibility across the full RWA lifecycle.
Its key differentiator is the bridgeless design, circulating tokenized assets directly on Bitcoin without wrapped or intermediary structures—“the hardest money meets the hardest assets.” Beginning with gold, HoneyB plans to expand into private credit, trade finance, and structured products, offering investors low-volatility, real-economy-linked yield opportunities. Ultimately, HoneyB positions Arch as the gateway to multi-trillion-dollar real asset and credit markets, embedding Bitcoin-native final settlement into institutional finance.
S1gnal is a SocialFi platform purpose-built for Bitcoin DeFi, providing a marketing and growth engine for protocols, token projects, and communities. By combining wallet tracking with Twitter activity analytics, it enables projects to measure real contributions—trading activity, on-chain interactions, and social amplification—and distribute tokens or rewards proportionally. This establishes a transparent, performance-driven incentive loop, directly linking marketing spend with measurable ecosystem growth.
Bima allows users to unlock liquidity without selling Bitcoin by issuing USBD, a BTC-collateralized stablecoin, and combining it with yield strategies (vaults). Within Arch, Bima facilitates swaps between USBD and tBTC, leveraging bridgeless execution to enable direct exchanges of Bitcoin-native assets. By expanding stablecoin liquidity and reducing fragmentation, Bima strengthens DeFi infrastructure across Arch. Even in its testnet phase, Bima has attracted early users through missions and point-based incentives, with strong potential to become a central liquidity hub for Bitcoin-backed stablecoins post-mainnet.
Hermetica is a Bitcoin-collateralized stablecoin protocol issuing synthetic USDh while offering yields up to 25% APY. Users can stake USDh to receive sUSDh for additional returns. By integrating with Arch, Hermetica enables PSBT-based bridgeless transactions, allowing secure issuance, trading, and DeFi integration of stablecoins directly on Bitcoin. It enhances interoperability with Arch’s liquidity pools, DEXs, and AMMs, playing a pivotal role in scaling the Bitcoin-native stablecoin market.
Hamilton is a project focused on tokenizing real-world assets on Bitcoin, beginning with U.S. Treasury bills as a secure, highly liquid instrument. In 2024, Hamilton partnered with Arch to leverage its parallel execution layer, enabling bridgeless smart contract functionality for tokenized assets directly on Bitcoin. By combining traditional financial assets with Bitcoin’s security and decentralization, Hamilton aims to capture a share of the projected $16 trillion tokenized asset market by 2030. The project aspires to establish itself as the leading RWA platform within Arch’s ecosystem, bridging institutional finance and Bitcoin-native infrastructure.
Wasabi is a cross-chain trading and yield platform currently operating on Solana, Ethereum, and Base. Its key feature is enabling users to trade derivatives on specific tokens while also providing Earn Vaults, which allow simple asset deposits to generate yield. At present, Wasabi is collaborating with the Arch Network to develop a cross-chain perpetual product that settles directly in Bitcoin.
Source: Arch’s Blog
Many people are unaware—or have forgotten—that I have long held a deep interest in making the Bitcoin network programmable. My focus on Stacks back in 2021 came from the same motivation. However, given Bitcoin’s inherent characteristics—its limited programming expressiveness, small block size, and long block time—I found it hard to expect any meaningful, practical utilization of Bitcoin in the near future. That was, until I learned about Arch.
Arch is architected in a way that allows full utilization of the Bitcoin network without taking on the security risks of a Bitcoin bridge. More than that, it preserves Bitcoin’s security model while delivering instant transaction processing. This is what rekindled my deep interest in the Bitcoin ecosystem.
Of course, many people still ask, “Why Bitcoin?” Some even suspect such positioning is nothing more than a marketing narrative. But for reasons I will explain next, I am convinced that a Bitcoin-based network carries fundamental significance simply by existing.
“If we trace the purchasing power of money back step by step, we finally arrive at the point at which the service of the good concerned as a medium of exchange begins. At this point yesterday’s exchange value is exclusively determined by the non‑monetary‑industrial demand which is displayed only by those who want to use this good for other employments than that of a medium of exchange.”
Ludwig Von Mises, Austrian Economist
Many people see Bitcoin’s value in its role as a store of value, while others define it as a medium of exchange. However, before Bitcoin became a store of value or a medium of exchange, it must have had a more fundamental form of value. The fact that someone first used Bitcoin as a medium of exchange means that, even before it was accepted in that role, it was already perceived as a commodity of inherent worth.
This is similar to the history of gold. Long before gold was recognized as a store of value or a medium of exchange, it already held intrinsic utility in industrial and manufacturing applications, as well as in jewelry and cultural artifacts. It was precisely this original utility that allowed gold to gradually attain monetary status. As Ludwig von Mises argued in The Theory of Money and Credit, for something to become money, it must have had exchange value for non-monetary purposes in the past, and its current purchasing power can be explained regressively from that historical value.
Bitcoin is no different. Before it became known as “digital gold,” it had its own intrinsic utility as a commodity. At its core, that utility was the network itself. Early Bitcoin’s exchange value came not from scarcity or speculative demand alone, but from its censorship resistance, decentralization, and open consensus system that anyone could join and verify. In other words, Bitcoin’s original “commodity value” lay not in the token itself, but in the properties of the network underpinning it. This network utility is what made it possible for Bitcoin to be accepted as a medium of exchange, ultimately linking it to its current monetary function and store-of-value status. Without the Bitcoin network, Bitcoin itself would have no value; Bitcoin exists because the network exists.
That is why Arch Network—using Bitcoin not just as an asset but as a means to verify transactions and strengthen security—is inherently significant, as it provides a concrete example of Bitcoin expanding its utility as a network.
Another reason Bitcoin-based networks matter is that they could help address an issue stemming from Bitcoin’s fixed total supply. This characteristic—while often celebrated—can be both an advantage and a disadvantage. It may seem overly cautious, perhaps even needless, to worry today about a future so distant I may not be alive to see it. Nonetheless, the day will come when we must seriously consider the long-term sustainability of the Bitcoin network.
Will miners still have an incentive to maintain the network once all Bitcoin has been mined? Bitcoin maximalists claim that those inspired by the network’s noble vision will voluntarily keep their mining rigs running to protect it. But that is, at best, the “best-case scenario” in the worst possible situation. A more ideal outcome would be a natural transition in which, over time, fee revenue generated directly on the Bitcoin network replaces the block subsidy. Such a structure would be welcomed even by the most committed maximalists.
The continued existence of a multi-trillion-dollar network cannot rest on the utopian assumption that “someone will voluntarily keep it running.” Instead, Bitcoin must be used strategically in ways that generate economic value worth paying for. Only then can the network sustain itself after the last Bitcoin is mined, preserving decentralization through a perpetual incentive mechanism—just as Satoshi envisioned. This is the truly “Bitcoin-like” future.
I believe Arch Network is one of the strongest candidates to generate meaningful added value for Bitcoin. Arch doesn’t just anchor its state to Bitcoin L1—it has the capability to directly create UTXOs on the Bitcoin network. This means the volume of transactions regularly recorded on Bitcoin will directly depend on Arch’s growth. If Arch successfully builds out its ecosystem, it could give Bitcoin a genuine, long-term pathway to sustainability based solely on network fees.
Of course, this entire premise assumes that Arch Network will consistently produce meaningful transactions, so we will need to watch closely to see how it grows. The question remains: can Arch truly build a Bitcoin ecosystem of lasting significance?
