CTO of the Bitfinex exchange and Tether CEO Paolo Ardoino told about promising solutions for the first cryptocurrency network that will “change the rules of the game” by increasing confidentiality and transaction speed.
Drivechains
The expert mentioned the renewed debate regarding BIP-300proposed in 2017 by Layer 2 Labs head Paul Storz.
It describes the use of the so-called drivechain, a technology that allows you to create sidechains based on the first cryptocurrency. Transactions in them are not signed with a regular cryptographic key. Instead, a bulk multisig system is used, where each block represents a new signature.
To create such a “master block”, 13,150 out of 26,300 confirmations are required.
According to the white paper, BIP-300 emphasizes slow, transparent, and verifiable transactions that are easy for regular users to complete but difficult for attackers to compromise.
Drive chains are designed to “unload” the Bitcoin mempool. Withdrawals from them are carried out through the form of “packets”, which combine many individual requests into one large group on L1.
The process looks like this:
- Overcrowded sidechain nodes combine withdrawal requests into a large set.
- The sidechain determines in what form the transaction will be carried out.
- A 32-byte hash of the transaction is calculated.
- Miners confirm it within 3-6 months.
Drivechain technology allows you to implement DeFi solutions, as well as create NFTs, security tokens and stablecoins.
According to the Bitfinex CTO, drivechains strive for the optimal balance between providing security and creating new new features. However, as with most such solutions, the most important aspect remains the protection of assets when they are transferred from the main network.
Since the implementation of the technology will require changes to Bitcoin Core, this could lead to vulnerabilities, Ardoino warned. However, the expert noted that drive chains will potentially provide additional incentives to miners and evenly distribute computing power in the network.
RGB – stability
CTO of Bitfinex also toldWhat RGB represents the “best opportunity” to issue stablecoins.
RGB — a system of smart contracts and off-chain protocol for Bitcoin and the Lightning Network, which allows the issuance of digital assets based on digital gold. It was created in 2016 by Bitcoin enthusiast Giacomo Zucco as a “non-blockchain-based asset system” using early ideas from Bitcoin Core developer Peter Todd.
Ardoino sees the solution as the “legitimate successor” to the Omni network after Tether stopped using it to issue USDT.
According to Ardoino, Tether is currently evaluating the timing of a possible release of USDT through RGB.
Clumsy Bitcoin
Despite the wide range of possibilities, CTO Bitfinex noted that the network of the first cryptocurrency is experiencing “ossification.” Every day it becomes more and more difficult to make changes to the main code.
It is difficult to say what the scaling of Bitcoin will be in the coming years, because technological innovations occur at an unpredictable speed, the technical director concluded.
Previously, the Lightning Labs team presented an alpha version of the Taproot Assets v0.3 protocol for the Bitcoin main network. The solution ensures the issuance and management of financial assets such as stablecoins.
In May, Digital Bitcoin Art and Assets launched an NFT marketplace based on RGB smart contracts.
Source: Cryptocurrency
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