The evolution of money has always been about solving the shortcomings of previous systems. From the early days of barter, humanity transitioned to precious metals and then to fiat currencies, each step aiming to make trade more scalable. But fiat money, controlled by governments, has introduced a global debt crisis, through problems like inflation, centralisation, and the manipulation of monetary policy. Bitcoin represents the next advancement in this evolutionary process, addressing these flaws by embracing cryptographic security and decentralisation. Unlike fiat currencies, which governments can inflate at will, Bitcoin’s fixed supply prevents inflation and shifts economic power back to individuals, and this is just the start.

Centralised monetary systems have historically led to corruption, manipulation, and the concentration of power, fundamentally distorting markets and undermining economic freedom. In a truly free market, prices should naturally fall over time due to technological advancements and increased productivity. However, centralised systems, through inflation and debt, have artificially reversed this deflationary trend, creating scarcity and concentrating power in the hands of a few.

Decentralisation is essential to counter these risks because it ensures that no single entity can manipulate or devalue a currency, preserving the integrity of free markets. Elastos extends this principle of decentralisation beyond money and into the digital economy, or SmartWeb, as a whole. This approach is rooted in the fundamental belief that the internet, like currency, should be a global public good, free from centralised control. With 5.44 billion internet users worldwide as of April 2024, accounting for 67.1% of the global population, the need for a decentralised and secure digital infrastructure is more critical than ever. Elastos aims to create an internet where data and digital assets are controlled by individuals rather than central authorities, ensuring that digital activities are universally accessible, secure, and protected from manipulation.

This combination of decentralisation and digitisation allows technology to drive down costs and increase access, benefiting individuals rather than centralised entities. As finance, data ownership, digital assets, digital identity, and applications are disrupted through decentralisation, the big question is, can we successfully connect it all together to create a new economy? First, let’s explore connecting Bitcoin to Elastos.

BeL2: Connecting Bitcoin within the Elastos Ecosystem

Bitcoin offers a path to economic freedom by decentralising the control of money, allowing natural market forces to determine value without interference from central authorities. However, a truly decentralised and free market requires more than just digital gold; it needs a robust infrastructure to support new financial systems and complex transactions, such as BTC-backed fiat issuance, swaps, and loans. This is where BeL2, built on the Elastos SmartWeb, comes into play.

BeL2 extends Bitcoin’s role by enabling sophisticated transactions and smart contracts without requiring Bitcoin to be bridged and wrapped, instead sending collateralised proof information over the assets themselves. As global retail e-commerce sales reached an estimated 5.8 trillion U.S. dollars in 2023, with projections indicating a 39% growth to surpass eight trillion dollars by 2027, the importance of secure and scalable digital infrastructure cannot be overstated.

ELA and Miners: Powering the Decentralised Economy

Elastos builds a secure, decentralised internet and economic system by using its Bitcoin merged-mined native cryptocurrency, ELA, as the essential fuel for transactions and smart contracts. Rooted in trust, Elastos employs a hybrid consensus mechanism where miners validate transactions, ensuring the network’s integrity and resistance to centralised control. ELA powers smart contracts like Elacity’s, enabling secure business operations like digital asset trading.

The integration of BeL2 enhances Bitcoin’s utility by allowing BTC-backed assets to function within the Elastos ecosystem, maintaining Bitcoin’s decentralised nature while expanding its role in a new financial system. By collateralising Bitcoin on the Elastos mainnet, BeL2 establishes a BTC-backed Bretton Woods system that supports not only fiat currencies but also decentralised loans and financial services. This innovation, combined with the decentralised security provided by miners and the utility of ELA, creates a robust foundation for next-generation decentralised markets and economies. Users control their identities, while BeL2 ensures Bitcoin remains a secure and resilient financial backbone, driving the Elastos SmartWeb economy and enabling diverse financial applications, from collateralised loans to complex business scenarios.

Elacity: Realising the Decentralised Internet Economy

Bitcoin’s potential as a decentralised currency stems from enabling secure, peer-to-peer transactions without the need for centralised intermediaries. However, to unlock its full capabilities, it must integrate with broader systems that allow for secure ownership and control of digital assets. Elacity, a platform built on the Elastos ecosystem, believes that true ownership of digital assets requires not just possession, but also the ability to securely manage, trade, and monetise those assets independently of centralised authorities. By implementing a decentralised digital rights management (dDRM) system, Elacity ensures that digital assets are encrypted, securely packaged, and tradable, directly addressing the inefficiencies and vulnerabilities inherent in traditional monetisation systems which rely on centralised licence servers.

Elacity’s connection to BeL2’s BTC-backed financial assets on the Elastos SmartWeb creates a digital economy anchored in Bitcoin’s security. This decentralised marketplace allows Digital Capsules to operate under smart contracts using Bitcoin-backed finance, ensuring secure and transparent transactions without central control through ELA miners. As 80% of transactions are now conducted digitally, decentralised control over finance becomes even more critical. Elacity can expand BeL2’s role to support a new Bitcoin-backed Bretton Woods financial system, enabling BTC-backed fiat or loan payments across various economies, including established sectors like media, e-commerce, and software; emerging areas like gaming and VR/AR; and frontier markets such as AI, robotics, and IoT devices.

Maintaining Decentralisation Across the Ecosystem