Bitcoin Core Developer Introduces Tunneling: Here’s Why
Bitcoin Core Developer will link Bitcoin and Ethereum via tunnels, offering a safer alternative to cross-chain bridges for asset transfer.
Bitcoin Core Developer Wants to Link Bitcoin and Ethereum Blockchains
As the crypto industry tackles ongoing security issues, a new project aims to enhance the connection between Bitcoin and Ethereum. Hemi Network, led by early Bitcoin core developer Jeff Garzik, has introduced “tunneling” to link the two blockchains securely.
Tunneling differs from traditional cross-chain bridges, which have shown vulnerabilities in the crypto space. These bridges have become a major target for hackers, exposing critical security flaws that threaten the integrity of the networks.
The Hemi Network’s tunneling approach aims to provide a more secure and efficient solution for cross-chain interoperability. According to Max Sanchez, co-founder and chief technology officer at Hemi Labs, tunneling creates a unique environment for secure interactions between Bitcoin and Ethereum.
The Hemi Network is designed to inherit Bitcoin’s full security features while allowing seamless movement of assets between the two blockchains. Sanchez explains that Hemi Virtual Machine (HVM) technology enables a secure Bitcoin interoperability system, offering a trust-minimized, robust solution for cross-network transactions.
BitVM2 to Play Key Role
The key to this tunneling success is an adapted version of BitVM2, a roll-up technology focused on optimistic computations secured by Bitcoin. BitVM2 allows Hemi to process transactions more efficiently while maintaining Bitcoin-level security.
This approach eliminates many attack vectors associated with cross-chain bridges, making it a more secure option for users looking to transfer assets between Bitcoin and Ethereum. One of the primary goals of the Hemi Network is to facilitate the tokenization of Bitcoin assets within the Ethereum ecosystem.
Hence, Sanchez explained how users can tunnel their Bitcoin through Hemi into Ethereum, unlocking new possibilities for secure asset transfers between the two blockchains. This development can bring Bitcoin-based assets into Ethereum’s decentralized applications (dApps) and further expand the possibilities on both networks.
The Hemi Network recently completed a $15 million funding round led by Binance Labs, Breyer Capital, and Big Brain Holdings. This funding will support the continued development of Hemi’s tunneling technology and help realize the project’s vision of uniting the Bitcoin and Ethereum ecosystems.
A Bitcoin Price Rally is Anticipated
Meanwhile, Bitcoin may be on the verge of a significant price surge by the end of 2024, as highlighted in a recent report by 10x Research. The potential rally is driven by a mix of macroeconomic factors and the upcoming FTX payout, which could bring substantial liquidity to the market.
The 10x Research report emphasized that BTC has a strong seasonal trend, typically seeing gains between October and March. This historical pattern and the macroeconomic shifts seen this year could create a favorable environment for BTC’s bullish performance in the coming months.
In the past, BTC’s price has shown similar behavior during bull market cycles in 2014, 2017, and 2021. The report suggests that 2024 could follow the same trend.
Fed Policy Shift Boosts Investor Confidence in BTC
Another factor fueling the bullish optimism for the leading digital asset is the recent shift in the US Federal Reserve’s strategy. The central bank’s interest rate cut and signals of further economic intervention will boost investor confidence in risk assets like Bitcoin.
In their analysis, 10x Research highlighted the importance of monitoring key levels in BTC’s price movement. The report stated that the previous cycle high of $68,330 and the 21-week moving average are critical to watch.
These levels can provide valuable insight into BTC’s trajectory and serve as potential entry or exit points for investors looking to manage their risks.
Macroeconomic Factors Align for Potential BTC Price Surge
The report also highlighted factors such as inflation concerns, interest rate decisions, and the upcoming US elections as possible catalysts for BTC’s price movement. The 10x Research report predicted that these macroeconomic trends would support BTC’s next major move.
Like BTC, gold has also experienced a price surge lately, gaining over 5% since Sept. 9, driven by geopolitical tensions and the Fed’s rate cuts. The report indicates that this movement in gold could have positive implications for BTC, as both assets tend to perform well during market uncertainty.
