Author: Robin Linus 2020-01-13 19:47:23
Published on: 2020-01-13T19:47:23+00:00
In a Bitcoin-dev post, Robin Linus shared a whitepaper detailing his work on a sidechain protocol called Coins. The proposal utilizes a bitcoin-backed proof-of-stake to provide an efficient solution to the double-spending problem. Validators vote on sidechain blocks with one-time signatures and every user can become a validator by locking bitcoins. One-time signatures ensure validators lose their stake for publishing conflicting histories. Checkpoints can be additionally secured with a bitcoin-backed proof-of-burn. Assuming a rational majority of validators, the sidechain provides safety and liveness. The protocol is a generic consensus mechanism allowing for arbitrary sidechain assets. Joachim Strömbergson responded with concerns regarding the proposal's two limitations. Firstly, he believed that creating a new token for each sidechain and using atomic swaps to exchange it with the mainchain token was not extending the Bitcoin economy, but rather inflating the supply with a new token. This goes against what many people consider a pillar of Bitcoin's value proposition. Secondly, he argued that the security of the proposed system seems fragile as it assumes an honest majority of validators coming from locking stake on Bitcoin chain by nodes interested in a particular sidechain. This could lead to trivial attacks on niche chains where only a few participants are interested. Robin responded to Joachim's feedback, stating that the derivatives are not in competition with BTC but depend on it heavily and that they wouldn't work as separate currencies. He also suggested introducing an additional cost and letting validators burn bitcoins for every on-chain vote to protect the chain from halting. Time value of locked bitcoins might be too cheap to protect the chain, and the economic implications of burning significant amounts of Bitcoin are questionable. Nonetheless, such sidechains would be much more secure than custodial lightning wallets which become more popular to circumvent the usability hurdles of the Lightning Network.
Updated on: 2023-06-13T23:12:58.990543+00:00