Aug 17, 2023

Tether said that it will stop support for Omni, a Bitcoin layer used for USDT transfers since 2014.

Video transcript

Omni layer was once the top of the town. It was where tether ran on top of Bitcoin. Yes. At one point, stable coins did run on top of Bitcoin. Somehow we lost that. And now Omni chain is shutting down Tether noting that there's just not enough volume to keep working on implementation. Omni has been up and running since 2014. So about 10 years now, 10 years now in crypto volume has fallen under 1 million million dollars or around $1 million per month. And that's pretty low compared to the market cap of tether self, which is about $82 billion. Most Tether is now running on Tron or Ethereum or other stable coin networks, but Bitcoin just just can't run with it anymore. That's that's sad, sad news for us today. I gonna throw this one over to you. This kind of brought me back to like earlier years of crypto development and I think it's also an inflection point for like the conversation around Bitcoins as well, right? Like do we want more applications on top of Bitcoin or do we want Bitcoin just to be Bitcoin? Yeah, that's the question. And that was the question that I think, you know, was forced into um the zeitgeist with the ordinal inscriptions and BRC twenties there for a minute. Right. Bitcoin, the Blockchain should be able to support these additional things was something that, you know, people were kind of breathing life into this conversation. Uh You know, with all the conflict that comes with it. Right? With kind of hardcore, I guess traditionalist Bitcoin being like, no, it's, it's money and that's it. Like we don't need to like Gussie this up. We don't need to do this thing. Um So I think that while it's like while there is, I think genuinely a fresh influx of people building sort of application stuff on Bitcoin. Um I think this is a good reminder that still it's, it's hasn't fully clicked because for most people, Bitcoin really, is that digital gold? Um And that's fine. Um So I think the reminder that Omni has been around for 10 years and has never really attracted um meaningful stable coin volume is a good reminder, um contrasted against what genuinely does seem to be a new fresh wave of interest activity and development on application level stuff on the Bitcoin Blockchain or at least attached to the Bitcoin Blockchain. So, um this is a good reminder. I think it's still early days for like actual sort of apple functionality on the Bitcoin Blockchain. Um But that doesn't mean that, you know, maybe this next wave of uh of things uh won't click, saw an interesting post from, you know, for instance, um saying that, you know, maybe, maybe this Bitcoin development era is, is upon us after a period of dormancy. But this is a good reminder that still, still early days for that conversation. I saw both your hands. So you got, you guys have to duke it out. I, I, yeah, I'm just gonna, I think this might set will up for what he's saying. Just my spite senses, maybe, maybe um as part of the announcement, teller said that they are still like super committed to Bitcoin and they use the announcement of like moving away from this to say that they are moving more towards uh developing R GB. So that's a client side, validated state and smart contract system operating on layer two and three of the Bitcoin ecosystem. Will. What do you make of them kind of putting these two announcements together? Is there something we can drive from that? Yeah. One thing I wanna do pretty quickly is fact check myself. I said one point something billion or million in transaction volume per month, but it's actually 1.4 million in total to tether on top of the Bitcoin network via this ul layer. So just a quick note there in terms of like tether itself, like I think they're very committed to Bitcoin, right? Like they opened up Bitcoin mining, I believe in El Salvador and then some other South American countries or Latin countries, they're buying a lot of Bitcoin. Uh Right now using like their extra profits from reserves, they're clearly very committed to Bitcoin. There's also the relationship between tether and Bit, which are two separate companies, but there's obviously like the share of the CTO Pollo. Uh and then there's like a commitment just to like servicing that market with Bit Fin. So I think there's something just to note there in terms of like Zach's comment earlier. The interesting thing to me is like, how fast you can lose your product in crypto if you don't keep abreast of what other people are working on. We've seen now with like Ethereum and Tron, they've had two full cycles sort of develop and they took over that stable coin market, like OMNI used to be like the layer for tether. And while it was very small compared to today, Ethereum and Ron have taken over the entire market and took it away from Bitcoin. And that's a huge loss for Bitcoin. If you come from the perspective that Bitcoin needs more fees, Bitcoin needs more applications. Bitcoin needs more developers because all that interest has now flowed to different chains. And Bitcoin is kind of like with like the thing of like, oh, I guess we're digital gold and we want people to buy us as an ETF but what else are we? I think that's kind of where we're seeing some uh pushback right now against Bitcoin maximalist, uh notably with like this wizard moment with and also like the ordinals and inscription whole uh thing going on right now. So just to kind of walk into some context there, Zach, yeah, the whole stagnation versus making Bitcoin magical uh that is an interesting conversation to watch.

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