Maybe I dont understand something enough, but from a technical point of view, how are sidechains or second layers fundamentally different from other altcoins, besides the fact that they use fees directly in bitcoins, and not in an intermediate token?
Well, they don't use their own blockchains for one. They rely on the security provided by their parent blockchain.
Coin = own blockchain
Token = rides on top of another blockchain
I get it: part of the appeal of Ordinals was having data embedded directly in the blockchain of the world's most successful cryptocurrency, and/or most secure computing network. That's why they don't want to be on something like Liquid or a shitcoin like BSV.
But the BRC20 thing I don't understand the appeal of. It could all be done on Counterparty (not really a "second layer" so much as a protocol built on top of Bitcoin) in a much more responsible and data efficient way. Its novel I guess is its main selling point. Which means its a fad that will eventually die down just like any other degen fad. Just have patience.
With coin and token, it's clear, it's a matter of defining terms. In essence, as long as bitcoins are in the second layer network, they cannot be controlled in any way by the original bitcoin blockchain. After all, there they are already becoming ersatz-bitcoins, even call it coins, even call it tokens. The key is that a full-fledged bitcoin can only be in the main bitcoin blockchain, everything else is just a replacement.
Yes, BRC20 are tokens on the Bitcoin blockchain, and this is fundamentally different from any second layer solutions. The second layer is still a separate network, even if it is connected to the main network by special contracts.
