Published on: 2014-03-17T15:55:41+00:00
In a March 2014 email, Adam Back discussed the process of moving coins to a side-chain by spending them on a script that suspends them and allows for reanimation through an SPV proof of burn on the side-chain. However, this method can be cumbersome due to security requirements, resulting in large and slow transactions. Alternatively, atomic cross-chain transactions can be used instead of direct movement across chains, but they require an untrusted counterparty on the other chain.To address these issues, Adam Back proposed the term "fraud proof" for an SPV proof with a longer chain, but Jorge Timón suggested "reorg proof" as a more suitable term since reorganizations can occur without fraud. Timón also mentioned the possibility of pegging a side-chain to a private chain, which would allow for higher scaling while maintaining bitcoin security properties. However, he noted that requiring a side-chain proof of burn to move back to the side-chain could potentially lock funds by dishonest private chain operators. Instead, he proposed allowing unilateral withdrawals to impose the responsibility of observing the side-chain for double-spends on the private chain.Bitcoin developers have discovered that secure two-way pegging between side chains is possible with some changes to bitcoin. This enables interoperability, as users can move bitcoin into and out of a side-chain with different parameters or experimental features. Greg Maxwell proposed a compact method for two-way pegging using SPV proofs, which also provides a security firewall. On the beta chain network, bitcoin has no mining reward but allows users to mint coins at no mining cost by providing an SPV proof that the coin has been suspended in bitcoin.For more information on fast atomic cross-chain transactions and CoinSwap as a trustless trading option, please refer to the provided links.
Updated on: 2023-08-01T07:59:04.213939+00:00