The Bitcoin ecosystem is undergoing a transformative phase, with innovative layers, protocols, and token standards expanding its utility beyond digital gold. Cryptocurrency analyst VirtualBacon recently explored these developments in a detailed video, spotlighting key advancements like ordinal inscriptions, BRC-2 tokens, and Bitcoin Layer 2 solutions that are redefining what’s possible on the world’s most secure blockchain.
As Bitcoin continues to evolve from a store of value into a platform for decentralized applications and asset issuance, new investment opportunities are emerging. VirtualBacon identifies three altcoins that stand out in this rapidly growing landscape—projects uniquely positioned to benefit from increased Bitcoin adoption and network activity.
1. Core: Bridging Bitcoin with Ethereum Virtual Machine (EVM) Capabilities
👉 Discover how EVM-compatible blockchains are unlocking Bitcoin's potential
One of the most promising projects highlighted is Core, an EVM-based blockchain secured by Bitcoin through a hybrid consensus mechanism combining delegated Proof-of-Work (dPoW) from Bitcoin mining pools and Proof-of-Stake (PoS) using its native token.
Launched in February 2023, Core differentiates itself with a mature token distribution model. A significant portion of its total supply is already in circulation, offering greater liquidity and market stability compared to newer projects with tightly controlled token releases. This wide float reduces the risk of sudden sell-offs by early investors—a common concern in emerging crypto ecosystems.
While the token experienced volatility following its launch, its current consolidation phase presents a strategic entry point for investors. With technical fundamentals stronger than many competing Bitcoin Layer 2 solutions, Core aims to become a bridge between Bitcoin’s unmatched security and Ethereum’s developer-friendly environment.
Developers can build scalable dApps on Core while benefiting from inherited Bitcoin security via periodic checkpointing of transactions onto the Bitcoin blockchain. This hybrid approach enables faster, cheaper transactions without sacrificing decentralization or trust assumptions.
As more developers explore Bitcoin-adjacent ecosystems, Core’s blend of interoperability, security, and mature economics makes it a compelling candidate for long-term growth—especially during a Bitcoin bull run.
2. Tap Protocol: A Decentralized Meta-Protocol Built Directly on Bitcoin
Another standout project is the Tap Protocol, which operates as a meta-protocol within the Bitcoin ecosystem. Unlike BRC-20 tokens that rely on centralized indexers and lack standardized smart contract functionality, Tap Protocol introduces greater flexibility, decentralization, and programmability directly on Bitcoin.
By leveraging Bitcoin’s UTXO model and enhancing it with advanced scripting capabilities, Tap enables the creation of fungible tokens, NFTs, and even lightweight smart contracts—all without forking the mainchain or compromising security.
One of its core innovations is a decentralized indexing layer, solving one of the major pain points in the current ordinal and BRC-20 ecosystems, where users depend on centralized services to track assets. Tap Protocol ensures that data remains verifiable and censorship-resistant across independent nodes.
Although the TAP token has not yet launched, it is expected to be distributed fairly through a public sale on CoinList—an approach designed to avoid whale dominance and promote community ownership. This fair launch mechanism aligns with Bitcoin’s original ethos of decentralization and permissionless access.
While Tap Protocol may not yet have the name recognition of larger Layer 2 solutions, its technical depth and commitment to true decentralization position it as a foundational layer for future Bitcoin-native applications.
👉 Explore platforms enabling next-gen blockchain innovation
3. Runes: The Next Evolution of Fungible Tokens on Bitcoin
VirtualBacon’s third pick isn’t tied to a single project but rather a broader trend: Runes, a new protocol for creating fungible tokens directly on Bitcoin.
Developed by Casey Rodarmor, the creator of Ordinals, Runes introduces an efficient, lightweight standard for issuing and transferring tokens on Bitcoin’s base layer. Unlike previous attempts such as Counterparty or even BRC-20s—which require complex workarounds or off-chain indexing—Runes uses native Bitcoin transactions to manage token balances via output-based accounting.
This means lower fees, better scalability, and seamless integration with existing wallets and infrastructure. Because Runes operates within standard transaction formats, it avoids bloating the blockchain with unspendable outputs—a known issue with inscriptions-based token standards.
Given that Runes is still in its early stages, VirtualBacon advises diversification rather than betting on any single Rune. Instead, investors should consider exposure to high-utility or community-driven Runes with strong use cases, such as governance, yield distribution, or ecosystem incentives.
As Bitcoin transaction activity increases—driven by both ordinals and new token standards like Runes—the network effect could amplify demand for efficient tokenization protocols. This creates a favorable environment for early adopters and developers building within the Runes ecosystem.
Frequently Asked Questions (FAQ)
Q: What makes Core different from other Bitcoin Layer 2 solutions?
A: Core combines delegated Proof-of-Work from Bitcoin mining pools with Proof-of-Stake using its native token. This hybrid model enhances security while supporting EVM-compatible smart contracts, making it ideal for developers seeking scalability without leaving Bitcoin’s trust framework.
Q: Is Tap Protocol compatible with Ethereum dApps?
A: No, Tap Protocol operates natively on Bitcoin and does not support EVM. However, it enables decentralized token issuance and smart contract-like functionality directly on Bitcoin, focusing on simplicity, security, and true decentralization.
Q: How do Runes compare to BRC-20 tokens?
A: Runes use standard Bitcoin transactions to manage token balances, resulting in lower fees and reduced blockchain bloat. In contrast, BRC-20s rely on ordinal inscriptions and external indexers, which can lead to scalability issues and centralization risks.
Q: When will the TAP token be available?
A: The TAP token is expected to launch via a public sale on CoinList. Details about timing and participation requirements will likely be announced closer to the release date.
Q: Can I invest in Runes directly?
A: There is no single "Runes" token. Instead, Runes refers to a protocol enabling multiple independent tokens on Bitcoin. Investors can gain exposure by acquiring individual Runes with strong fundamentals or ecosystem support.
Final Thoughts: Positioning for the Next Bitcoin Cycle
As Bitcoin continues to mature as a foundational layer for decentralized innovation, projects like Core, Tap Protocol, and Runes exemplify the next wave of utility-driven development. These initiatives enhance Bitcoin’s functionality without compromising its core principles of decentralization, scarcity, and security.
Investors looking ahead should focus not just on price movements but on ecosystem growth, developer activity, and on-chain adoption metrics. The convergence of improved scalability, new token standards, and cross-layer interoperability signals a bullish long-term outlook for well-positioned altcoins in the Bitcoin sphere.
👉 Stay ahead of the next market surge with cutting-edge crypto insights
Whether you're drawn to hybrid consensus models, decentralized meta-protocols, or efficient token standards, now is an opportune time to explore these emerging opportunities—before they gain mainstream traction.
Keywords: Bitcoin Layer 2, Runes protocol, Tap Protocol, Core blockchain, BRC-2 tokens, ordinal inscriptions, altcoin investment, EVM on Bitcoin