Rootstock (RSK): Smart Contracts on Bitcoin
Rootstock (RSK) is a smart-contract platform that incorporates a Turing Complete Virtual Machine to Bitcoin. It also provides other network enhancements, such as faster transactions and better scalability, features which we believe will also enable new usage scenarios.
RSK is an evolution of QixCoin, a turing-complete cryptocurrency created in 2013 by the same development team. RSK provides an improved payment experience with almost immediate confirmation. It currently achieves 300 tps and confirms most payments in less than 20 seconds. Yet, it still relies on the same security guarantees as Bitcoin, which supports SHA-256 merged mining.
RSK works as a Bitcoin Sidechain. When Bitcoins are transferred into the Rootstock blockchain, they become “Rootcoins” (RTC). Rootcoins are equivalent to bitcoins that lives in the Rootstock blockchain, and they can be transferred back to Bitcoins at any time at no additional cost (with the exception of Rootstock standard transaction fees). RTC is the base currency used on the RSK sidechain to pay miners for transaction and contract processing.
There is no currency issuance: all RTCs are created by Bitcoin from Bitcoin’s Blockchain.
Rootstock enhances Bitcoin in the following areas:
• Turing-complete Rootstock Virtual Machine (RVM) allowing smart-contracts;
• 10 seconds is the average of the first transactions confirmation;
• Safe merged mining that combines PoW with threshold-signature based on federation;
• The increase in the speed of backbone transmission has lowered the delay in the peer-to-peer gossip network;
• Two-way pegging using sidechains.
Rootstock governance model aims to represent all the actors of the community, providing a board of governance composed of 5 seats. Miners will be able to vote with hashing power (1 vote), Bitcoin and Rootstock users will vote with Proof-of-Stake (1 vote), Exchanges and web-wallets will vote though the Federation (1 vote), Rootstock and Bitcoin Core developers will have a special threshold voting system (1 vote), and the last vote will be offered to a non-profit established Bitcoin institution, such as the Bitcoin Foundation, which may represent the largest ecosystem. An institutional vote may also be offered to the Ethereum Foundation, if it is representative of the Ethereum community.
Rootstock provides a solution by offering almost instant transaction validation (20 seconds) and issuing assets with prices anchored to those of a fiat currency or other stable commodity. Reducing exposure to volatility in transactions by keeping bitcoin as a reserve currency increases the overall value of bitcoins.
If Bitcoin block size is not increased through a hard-fork, when the next Bitcoin reward is halved, Bitcoin transaction fees may become prohibitively high for certain applications. As RSK blocks can hold many more transactions than Bitcoin blocks, Rootstock will naturally offer lower fees. Have a look to the next section for an analysis about future scenarios related to the transaction fees.
Bitcoin’s future and its transactions fees are unclear: currently, contentious proposals on changes in the maximum block size will have a strong impact on future transaction fees. In the following table we attempt to predict future scenarios and compare RSK and Bitcoin under reasonable assumptions about growth and forks.
The Rootstock platform provides Turing-complete smart contracts as proposed by Nick Szabo in 1993. At the same time, RSK’s VM is backward compatible with Ethereum VM, hence Rootstock gives the opportunity to developers working on Ethereum to benefit from the robustness of the Bitcoin Blockchain.
One of the main limits of Bitcoin for retail use is its confirmation time (from 10 minutes to 1 hour to ensure irreversibility). RSK allows consumers to benefit from Bitcoin security with confirmations within few seconds.
RSK allows the creation of smart escrow services in which the oracles sign (or not) a transactions defining whether it should be executed (or not) without having any contact with the funds under escrow.
RSK allows the creation of crypto-assets (or altcoins) secured by the Bitcoin network. Given the RSK flexibility to evaluate the contract’s fuel, these applications (like all others) could be used by scholars at banks and corporations.
RSK also allows the creation of digital tokens backed by real assets.
RSK allows the development of contracts able to replicate what is known as Proof-of-Existence which allows individuals and companies to prove the existence of a certain document (or property right) at any given time with the security of the Bitcoin Blockchain.
RSK platform is, in essence, the combination of:
- A Turing-complete resource-accounted deterministic virtual machine (for smart contracts);
- A two-way pegged Bitcoin sidechain (for BTC denominated trade);
- A dynamic hybrid merge-mining/federated consensus protocol (for consensus security), and a low-latency network (for fast payments);
RootStock represents the culmination of 4 years of blockchain technology improvements and will allow the cryptocurrency ecosystem to use of the best money features and programmable payments by increasing bitcoin value (the currency).
It will allow developers around the globe to create decentralized personal and corporate solutions that works in the safest network around the world with low transaction costs that fit an ample range of needs.
It will allow Bitcoin miners to participate in the Smart Contract market by adding significant value to the mining industry and ensuring its long term sustainability.
It will contribute to the creation of a broader base of miners strengthening Bitcoin network’s security. It will enable the development of a decentralized, instant and inexpensive financial system that will create inclusion and opportunity for three thousand million people who remain unbanked and financially impaired in our world.
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