Author: Chris Stewart 2017-09-08 20:14:30
Published on: 2017-09-08T20:14:30+00:00
The article discusses the use of side-to-side pegs in blockchain technology, particularly the OP_WITHDRAWPROOFVERIFY for sidechain-headers-on-mainchain approach. This method is considered superior as it allows value to be transferred from the mainchain to a sidechain, with the sidechain paying to and committing to a sidechain address. It eliminates the need for reorg proofs since the mainchain can see in real-time which branch of the sidechain is getting extended. This makes it possible for sidechainers to detect fraudulence and prevent invalid forks from being advanced.The article also explores the creation of new sidecoins for free, where it is noted that freely-created lockboxes should not be valid WT. A lockbox is a Bitcoin-formatted transaction output paying to the scriptPubKey. The sidechain allows arbitrary creation of sidecoin provided they are in a lockbox whose sidechain address commitment is 0. However, the sidechain needs to ensure that a single WT is not used to unlock multiple lockboxes on Esschain.The discussion further delves into how a main-to-side peg works, where a lockbox is created on Esschain and then spent with a scriptSig that pays out to the selected Bitcoin P2SH address. The article also highlights the challenges faced by side-to-side pegs, particularly in the event of the economic majority deciding to kill Esschain due to security issues or other factors. Thieves can increase their payoff by packing an invalid Esschain block full of invalid WT to other chains, which is possible if side-to-side pegs are enabled. The article concludes by stating that side-to-side pegs allow better liquidity and provide arbitrage quickly between sidechains without having to pass through the mainchain. However, they make attacks on sidechains more lucrative. Unlike side-to-side pegs, drivechain cannot implement them because asking mainchain miners about side-to-side pegs requires them to be aware of both sidechains.
Updated on: 2023-06-12T18:01:34.806876+00:00