Building things that matter — meaningful development that remains unheard
I know, I know — Bitcoin is a fed up topic. But what I see is that most people are mostly fed by the redundant content about “banks regulating crypto currencies”, “another incredible blockchain application” or “the next altcoin that is going to be better than bitcoin”.
While news sites are generating click-bait punchlines and token start-ups are spending hundreds of thousands of dollars on communication campaigns, few people pay attention to the things that are actually being developed. And that is fair. With myriads of information flowing towards us every single day it is fair enough that our attention is captured by the catchy phrases on the highly paid channels.
Teams developing real software and solving real blockchain related problems are usually those that no one has heard about. Busy with code, these people have little time and no intention to advertise their activities.
I think it is important to educate community about the things that matter. Here I cover the basics of the most meaningful developments on Bitcoin network:
On-chain transactions are slow and expensive, because they are secure. In order to achieve higher adoption among the general population, crypto currency transactions have to be cheep and fast — match those of payment networks such as Visa or Mastercard.
A second layer solution — Lightning Network enables scalable, low fee and instant transactions for blockchains. Multiple teams of top developers are working to upgrade the technological aspects, run multiple stress tests and improve the UI/UX of consumer facing applications, such as wallets and check-out points.
It is not a secret that smart contracts can be built not only on Ethereum network. The decentralized Ethereum network now face increased competition, as it cannot really handle high dApp (decentralized application) activity. Most of its competitors rely on a centralized or semi-centralized blockchain in order to achieve higher scalability and/or lower costs.
So smart contract processing boils down to a trade-off of decentralization and scalability. And what is the point of a centralized smart contract processor when we have services such as Microsoft Azure or Amazon Web Services?
Luckily, some teams are working on smart contracts on Bitcoin. Rootstock has created a sidechain for Bitcoin to facilitate smart contract processing. The team sensibly incentivizes miners to secure Rootstock sidechain by allowing merge mining. To add to that, to allow scaling and low cost transactions they are integrating with Lightning network. Finally, their mainnet is already live and major tokens such as Civic (CVC) is planing to move to their solution!
Talking about sidechains there is more. They are a crucial mechanism to facilitate interoperability among different cryptoassets. Sidechains allow to move and securely use tokens and/or other digital assets from one blockchain on a separate blockchain.
Blockstream, the leading provider of blockchain technologies and a prominent “builder on Bitcoin”, has recently introduced Liquid. It is a Bitcoin sidechain that allows users to create their own token asset. Issued Assets (IA) on Liquid can represent various existing assets that can be easily exchanged on a sidechain.
State channel is a two-way connection opened between users that want to transact. The channel is opened following agreements from both users — private key signatures. The channel can be closed unilaterally by any user. Currently they are considered to be one of the ultimate solutions to scalabillity.
Interestingly, state channels are argued to create a new space for third party services. For example, a hub will provide cheep and convenient payment routing given that it has large pool of capital and many small channels. Another instance is “watchtower” service. It holds a copy of user’s last state to respond on user’s behalf if he/she is offline for an extended period of time.
If you liked this article, please give it a clap, or two, or fifty! If you are hungry for knowledge in crypto space, feel free to contact me — I would be happy to answer any questions or share interesting content.