Published on: 2020-06-26T00:57:13+00:00
In a forum post, CS has proposed a method to build childchains on top of Bitcoin without requiring any changes to the Bitcoin network or user and miner awareness. The childchain would be designed to be Bitcoin-aware and replicate the properties of Proof of Work by necessitating continuous burning of Bitcoin in exchange for fees on the childchain.The security of the childchain and the accuracy of the 2-way-peg could potentially make it a suitable option for lower-value transactions, with the scale being determined by the rate at which Bitcoin is burned. This approach would eliminate the need for additional Proof of Work chains for new blockchains.A detailed write-up of the proposal can be found on bitcointalk.org. However, ZmnSCPxj, in another forum post, critiques the concept of sidechains as a scaling solution for cryptocurrencies. He argues that blockchains do not scale effectively, and instead proposes the Lightning Network as a superior alternative for scalability.The Lightning Network utilizes channels to facilitate scaling, with each channel representing a consensus system between two participants. Atomic swaps are employed to transfer assets between channels and the blockchain. The construction of these channels requires reference to an ultimate arbiter in case of disputes or non-consensus, which is provided by the underlying blockchain layer. Therefore, the blockchain serves as an arbitration mechanism while the channels handle scaling.Returning to the proposal, it aims to construct childchains on top of Bitcoin without requiring any modifications to the Bitcoin network itself. The childchain would be Bitcoin-aware and simulate Proof of Work by mandating the continuous burning of Bitcoin in exchange for fees on the childchain.The selection of the childchain tip is based on the highest total accumulated Bitcoin burnt for the full chained set of childchain block commits, with the objective of emulating total accumulated work. The only asset on the childchain would be a 2-way-peg coin that maintains its value without the need for oracles or collateral. Each valid childchain block must use a small percentage of the burnt amount to deterministically reimburse withdrawals from the childchain.Users have the ability to burn child-BTC and join the withdrawal queue, which is filled as part of the validity requirements by childchain "miners" until it is filled at a 1:1 ratio on the mainchain or more. Similarly, users can burn BTC independently of mining the childchain and receive an equivalent amount of 1:1 child-BTC on the childchain.While childchains may not be as secure as the mainchain, both the security of the childchain and the accuracy of the 2-way-peg could still be acceptable for lower-value transactions, depending on the burning rate. Childchains have the potential to eliminate the need for additional Proof of Work chains for new blockchains, avoiding added complexity while leveraging the Proof of Work performed on Bitcoin as a proxy for unforgeable costliness. Furthermore, childchains benefit from Bitcoin's censorship resistance and data availability.A large volume of low-value transactions that might be too expensive to conduct on the main chain could potentially generate enough fees through childchain miners to afford higher mainchain fees, similar to the concept of "batching for fees". Additionally, the proposal claims to offer the benefits associated with proof of stake systems, such as energy efficiency, without relying on internal permissions or tokens, trusted distributions, or centralizing mechanisms like staking, by simulating proof of work.The proposed approach aims to foster the growth of the Bitcoin ecosystem and replace the need to create alternative cryptocurrencies solely for the purpose of launching a new blockchain. The detailed proposal can be found at https://bitcointalk.org/index.php?topic=5214173.0, where the author is seeking feedback on any overlooked issues or interest in creating a proof of concept.
Updated on: 2023-08-02T02:27:13.779783+00:00