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RSK: BTC’s second layer with merge-mining and Ethereum SC compatibility

Paradigm
Paradigm
Published in
30 min readApr 10, 2019

Detailed review on the project

Table of contents

Introduction
Technology
Team
Partnerships
Use case
Social metrics
Markets and volume
Competitors
Roadmap
Token Mechanics
Token Metrics
Funding
Summary

Introduction

RSK is the most secure smart contract network in the world and enables decentralized applications secured by the Bitcoin Network.

RSK is an evolution of two platforms, QixCoin and Ethereum. QixCoin was a turing complete cryptocurrency created back in 2013 by some of the RSK founders. QixCoin introduced the concept of pay per execution, currently known as transaction “gas.” However, RSK inherits several key concepts from Ethereum, such as its account format, VM and web3 interface. Therefore, RSK is highly compatible with Ethereum compilers, tools and dApps.

Compared to Bitcoin, RSK provides an improved payment experience with near instant confirmations. And yet, RSK is also based on proof-of-work by supporting SHA-256D merged mining, the same consensus protocol and mining network that secures Bitcoin. As of January 2019, RSK has more than 40% of Bitcoin’s hashing rate, resulting in being the most secure smart-contract platform on the planet in terms of energy invested in securing the blockchain.

Technology

RSK platform is, at its core, the combination of:

  • A Turing-complete resource-accounted deterministic virtual machine (for smart contracts);
  • A two-way pegged Bitcoin Sidechain (for BTC denominated exchange) based on a Federation secured with custom Hardware Security Modules. Once the drivechain protocol becomes implemented on Bitcoin, the original plan is to move to a hybrid-drivechain mechanism;
  • A selfish-mining resistant merge-mining-based consensus protocol;
  • A low-latency block-propagation network (for fast payments).

Turing-Complete Virtual Machine

RSK virtual machine (RVM) is the core of the Smart-contract platform. Smart-contracts are executed by all network full nodes. The result of the execution of a smart-contract can be the processing of inter-contract messages, creating monetary transactions and changing the state of contract-persistent memory. The RVM is compatible with EVM at the op-code level, allowing Ethereum contracts to run flawlessly on RSK. Currently, the VM is executed by interpretation. In a future network upgrade, the RSK community is aiming to improve the VM performance substantially. One proposal is to emulate the EVM by dynamically retargeting EVM opcodes to a subset of Java-like bytecode, and a security-hardened and memory restricted Java-like VM will become the new VM (RVM2). This may bring RSK code execution to a performance close to native code.

Main features:

  • Independent VM, but highly compatible with EVM at the opcode level
  • Run Ethereum DApps with the security of the Bitcoin network
  • Performance improvement pipeline documented in numerous RSKIPs (RSK improvement proposals) created by the RSK community

Sidechain

A sidechain is an independent blockchain whose native currency is pegged to the value of another blockchain currency automatically by using proofs of payment. There is a two-way peg when two currencies can be exchanged freely, automatically, and without incurring in a price negotiation. In RSK, the Smart Bitcoin (RBTC) is two-way pegged to the BTC.

In practice, when BTC are exchanged for RBTC, no currency is “transferred” between blockchains in a single transaction. When a transfer occurs, some BTCs are locked in Bitcoin and the same amount of RBTC is unlocked in RSK. When RBTC needs to be converted back into BTC, the RBTC get locked again in RSK and the same amount of BTC are unlocked in Bitcoin.

Fully trust-minimized and third-party-free two-way pegs can be created if two platforms have Turing-complete smart-contracts. But since Bitcoin does not currently support smart-contracts nor native opcodes to validate external SPV proofs, part of the two-way peg system in RSK requires trust on a set of a semi-trusted third-party (STTP), that RSK team collectively calls the Federation. No single STTP can control the locked BTCs, but only a majority of them has the ability to release BTC funds. Each STTP has a key to protect the BTC that are locked, and upcon receiving commands from the RSK blockchain, it unlocks the BTC that need to be transferred back into Bitcoin. Note that if a user transfers BTC into RBTC and back, they will normally not receive bitcoins that are directly connected by UTXOs with the original BTC sent. Therefore, do not lock RBTC for specific users, but for the whole RSK network.

The locking and unlocking of funds is done by the Federation without any human intervention. A requirement for being part of the Federation is the ability to audit the proper behavior of the software that powers the node, especially regarding the correctness of the component that decides on releasing BTC funds. RSK Labs developed a firmware for a Hardware Security Module (HSM) that STTPs can use, in order to provide maximum security for their private keys and, in the future, to be able to enforce a transaction validation protocol to further improve security.

As of January 2019, the RSK Federation comprises 15 well-known, and highly-secure notaries. Leading Blockchain companies currently integrate the RSK Federation and participate in an autonomous protocol to securely lock Bitcoins. In exchange for their work, Federation members are awarded 1% of the transaction fees generated on RSK, in order to cover the hardware and maintenance costs. There is an automated process to modify the composition of the federation. Each federation member can either accept or reject a composition change. The process, which is infrequent, is commanded by a smart-contract, so it’s open to the public. The protocol has a consensus enforced delay of one week until the change is activated. This allows users to transfer the Bitcoins back to the Bitcoin network in case they do not trust the new Federation composition.

If Bitcoin adds special opcodes or extensibility to validate SPV proofs as a hard-fork, and once the new system is proven to be secure and trust-free, the Federation role as STTPs will no longer be necessary, and the RSK community may implement the changes to adapt RSK to the trust-free system. The RSK community have also proposed a drivechain BIP, which enables miners to participate in the securing of the Bitcoins in the peg, and decreases the trust required on the STTPs even more.

Merged Mining

Satoshi consensus, based on proof-of-work, is the only consensus system that prevents the rewrite of blockchain history at a low cost. The academic community is advancing the knowledge and study of proof-of-stake as an alternative, but currently PoW provides the highest proven security. Merge mining is a technique that allows Bitcoin miners to mine other cryptocurrencies simultaneously with nearly zero marginal cost. The same mining infrastructure and setup they use to mine Bitcoins is reused to mine RSK simultaneously. This means that, as RSK rewards the miners with additional transaction fees, the incentive for merged mining becomes high.

RSK team has identified three phases for RSK merge-mining growth:

- bootstrapping phase: merge-mining is below 30% of Bitcoin hashrate.

- Stable phase: merge-mining is between 30% and 60% of Bitcoin hashrate.

- Mature phase: merge-mining is higher than 60% of Bitcoin hashrate.

RSK has left behind its bootstrapping phase, when rogue merge-miners could revert RSK blockchain at a low cost. As of January 2019, more than 40% of Bitcoin miners are engaged in RSK merge-mining. But as RSK fees remain low compared to Bitcoin block reward, the cost to attack RSK by a double-spent is lower than Bitcoin’s.

RSK has some properties to reduce the risk of double-spend attacks, such as long miner rewards maturity. Still RSK Lab research team has developed several protections to prevent attacks during the stable and mature phases of the project:

  • Signed notifications: RSK clients can make use of signed notifications by notaries. Nodes can use these notifications to detect Sybil attacks and inform the user.
  • Transparent double-spend trails: this is a method where all RSK merge-mining tags are augmented with additional information that can be used to detect selfish RSK forks that are public in the Bitcoin blockchain. Selfish-fork proofs are automatically constructed and these proofs are presented to the RSK nodes, which spread them over the network. The proofs force nodes to enter a “safe mode” where no transaction is advertised as confirmed. The safe mode prevents merchants and exchanges from accepting payments that could be double-spent. Once the proven selfish-fork is outpaced by the RSK mainchain in accumulated PoW, the network reverts to its normal state. This method is a deterrent for any RSK double-spent attempt (where the malicious miner still tries to collect Bitcoin rewards when mining the selfish fork).

Once the platform enters the maturity phase, RSK team estimates the security of RSK will be enough to support the economy of worldwide financial inclusion.

Main features:

  • DECOR+ consensus protocol
  • one-day maturity for mining reward
  • No loss of efficiency in Bitcoin mining expected from merge mining (for late midstate switching)

Fast Payments and Low Latency Networks

RSK already enables second layer off-chain payment networks, but still RSK aims to provide a much better on-chain payment network compared to Bitcoin. To achieve this, RSK adopts the DECOR+ and FastBlock5 protocols, which allow reaching a fifteen second average block rate that does not create incentives for mining centralization and selfishmining.

Main features:

  • fifteen to thirty second block intervals (depending on the miner’s state switching efficiency)
  • Full network propagation of last competing blocks to prevent selfish mining and reduce stale block rate
  • New network command to spread block headers with time critical priority
  • DECOR+ protocol for reward sharing between competing blocks
  • GHOST protocol for chain weighting

Since the creation of Bitcoin there has been a race towards lower intervals for PoW blockchain based cryptocurrencies. But low block interval may impact the stability and capability of the cryptocurrency network, so several design factors must be considered. First of all, the most important factor that affects the viability of short confirmation intervals is the number of stale blocks generated. The main factor that affects the stale block rate is the block propagation protocol. For RSK the team has carefully analyzed this protocol and they have run simulations in order to verify the performance, usability and security of the network.

In Bitcoin, when two or more miners have solved blocks at equal height, there is a clear conflict of interest. Each competing miner wants his block to be selected by the remaining miners as the best-chain tip, while the remaining miners generally would not care which one is chosen from the two. However, all the remaining honest miners and users have a rational preference that the same block tip is chosen, because this reduces the reversal probability. The DECOR+ consensus protocol sets the right economic incentives for a convergent choice, without requiring further interaction between miners. The DECOR+ protocol is a reward sharing strategy that incentivizes resolving the conflict economically such that:

  1. The conflict is resolved deterministically when all parties have access to the same blockchain state information
  2. The chosen resolution maximizes all miners’ revenue (collectively) and for both the miners in conflict in case block rewards differ by a high margin
  3. The chosen resolution maximizes censorship-resistance if competing blocks have approximately similar rewards
  4. Resolving the conflict takes negligible time

Transaction Privacy

RSK does not provide better transaction privacy by itself than Bitcoin and relies on pseudonyms. Nevertheless, the VM of RSK is Turing-complete, so anonymization technologies such as CoinJoin, ring Signatures or zCash can be implemented securely without third-party trust.

Scalability

RSK can scale far beyond Bitcoin in its current state. An RSK payment requires a fifth of the size of a standard Bitcoin payment. Using the proposed LTCP protocol, transaction size can be reduced to 1/50th of a Bitcoin transaction size. This immediately leads to a substantial increase in transaction volume capability. Besides, there are community proposals (RSKIPs) to enable user-selectable signature schemes: ECDSA, Schnorr and Ed25519. Because Ed25519 is more performant than Bitcoin ECDSA curve, using this scheme may lead to even more capacity.

Source.

2WP Designs

The most common 2WP designs are presented: sidechain, drivechain and multi-sig custody and hybrid designs. To simplify the explanations, we’ll call secoins to the bitcoins that have been transferred to the secondary blockchain.

Single Custodian

One possible option to implement the 2WP is having an exchange holding custody of the locked bitcoins and holding custody of unlocked equivalent tokens. The exchange would manually enforce the promise of locking bitcoins before unlocking secondary tokens either manually or by means of a protocol executed in software. This setup is depicted here:

Multi-sig federation

A better way to implement a 2WP is having an group of notaries control of a multi-signature, where the majority of them has to approve the unlock of funds. This setup is better than having a single controller of the funds, but may still centralize control. To achieve true decentralization, the notaries should be carefully selected so they are located in different jurisdictions, different geographies, and each having good reputation and good security. Also they must not be too few, nor too many.

This setup is depicted here:

Sidechains

Trying not to involve more third parties in the 2WP, each blockchain can enforce the premise by implementing a protocol validated by consensus. Each blockchain must understand the consensus system of other blockchain and can therefore automatically release bitcoins when given proof of a lock transaction in the other blockchain, as depicted here:

However, there are several problems when using sidechains for Bitcoin:

  • Most public blockchains do not have settlement finality. If the secondary blockchain does not have it, then the Bitcoin blockchain can never be sure if a secondary transaction has been accepted by the secondary network (e.g. locking secoins). All it can get is a probabilistic assurance: more proof-of-work confirming a transaction means it is more probable it has been accepted.
  • Even if the secondary blockchain has settlement finality, without blockchain entanglement (see next section) then the secondary blockchain suffers the same problem about the Bitcoin blockchain. If there is entanglement, then the secondary blockchain block rate cannot be higher than Bitcoin’s rate.
  • Sidechains in Bitcoin requires a soft-fork or hard-fork to add new complex opcodes. Blockstream proposal is currently incomplete and does not address the validation of proof-of-work of SPV proofs.

Entangled Blockchains

One way to overcome the lack of transaction finality for the 2WP is to entangle both blockchains such as the reversal of the lock transaction in the primary blockchain implies the reversal of the unlock transaction in the secondary blockchain. There are several ways to entangle blockchains:

  1. The transactions of the secondary blockchain are embedded in transactions of the primary blockchain (e.g. in OP_RETURN payload, such as in Counterparty)
  2. Secondary blocks have two parents, one in the secondary blockchain and one in the primary blockchain. Secondary blockchain nodes verify that primary parents belong to the same Bitcoin best chain.
  3. Secondary blocks are anchored by cryptographic commitments in primary blockchain transactions.

The first two options allow the secondary chain to verify an SPV proof without requiring the prover to provide confirmation headers because the secondary blockchain client also maintains a copy of the Bitcoin blockchain (a full blockchain in the first option, and only the headers in the second option). The third option does not allow this.

The following diagram shows a sidechain transferring bitcoins into the secondary blockchain without additional confirmations (at the fastest possible Bitcoin speed):

Entangling blockchains have several drawbacks:

  • It prevents the secondary chain from creating blocks at a higher rate that Bitcoin because of the uncertainty in the acceptance of blockchain branches before anchoring. Should a short anchored branch be taken as the best chain over a longer non-anchored chain?
  • When embedding secondary transactions in Bitcoin transactions, all users of the secondary blockchain need to process the transactions of both chains.
  • Entangling solves one direction of the problem of settlement finality, but does not solve the problem of custody of the primary blockchain locked bitcoins.

Drivechains

A drivechain gives custody of the locked btc to the Bitcoins miners, and allows Bitcoin miners to vote when to unlock bitcoins and where to send them. The miners vote using the bitcoin blockchain, and votes are cast in some part of the block (e.g. the coinbase). The greater the participation of honest miners in the drivechain, the more secure it is. The following diagram depicts a drivechain:

Hybrid Models

All the designs presented so far are symmetric: the method used to unlock secoins is the same used to unlock bitcoins. But the primary and secondary blockchains are essentially different: the primary issues new native tokens and the secondary does not. This has huge consequences in terms of security and it suggests that a symmetric 2WP model may not be adequate. A hybrid 2WP is a 2WP using a different unlocking method for each side, such as using a sidechain on the secondary blockchain and using a drivechain on the primary network.

RSK Case

The case of RSK is special. RSK relies on a fundamental design choice: it must allow merge-mining with Bitcoin. Therefore RSK team must analyze which is the best design for such case. RSK team takes into consideration:

  • which parties control the locked bitcoins
  • what is the cost of an attack
  • what are the consequences of an attack
  • what incentives are at play

If the involvement of Bitcoin miners in merge-mining is almost total, RSK team found that the actors that have the highest incentive to be honest when being custodial are the Bitcoin miners, but only when almost all of them are engaged. In case of merge-mining, both drivechains and sidechains rely entirely on the honesty of Bitcoin miners, and both offer the same security. However sidechains are much more complex to implement on the Bitcoin side, so for the Bitcoin side, the best choice for RSK is using a drivechain. On the RSK side, RSK team implements a sidechain. So the RSK hybrid model at this point could be defined as Drivechain/Sidechain.

When the merge-mining engagement is low, drivechain/sidechain offer little security. Therefore, RSK team proposes a hybrid model where the security of locked bitcoins is based on a drivechain plus a set of notaries. The miners and the notaries vote (with different weights) on which bitcoins to unlock. Notaries vote with their digital signature, while miners vote by adding a special tag in their coinbase transactions. This is a trade-off between centralization and security. The final RSK 2WP design can be defined as Drivechain+Notaries/Sidechain. To set the votes weights, RSK team uses of a dynamic method based on the merge-mining engagement. At first, only the notaries will vote, in a classical multi-sig transaction. In the mid-term, when drivechains capabilities are added to Bitcoin, both the notaries and the miners will vote along each other. In the long-term, when the merge-mining engagement reaches 90%, the notaries will cease to vote, and only the miners will. This evolution is depicted in the following figure:

In essence RSK team proposes that the security of the locked bitcoins rests on the miners and a set of notaries, but the amount of power between these two groups is dynamically adjusted in relation to the amount of merge-mining engagement.

Source.

Team

Diego Gutierrez Zaldivar — CEO & Co-founder.

Education

  • Instituto Libre de Segund a Enseñanza (ILSE). Dates attended or expected graduation: 1988–1992.
  • Escuela Nro 26 Adolfo Van Gelderen. Dates attended or expected graduation: 1982–1987.
  • Universidad de Buenos Aires / UBA. Degree Name — Bachelor’s degree. Field Of Study — Electrical and Electronics Engineering. Grade: Unfinished.

Diego was one of the pioneers of web development in Argentina and Latin America back in 1995 and he has a leading role in fostering Bitcoin technology in Latin America since 2012. He’s got in touch with Bitcoin in 2011 and since 2012 he decided to completely devote himself to the creation of the Argentinean and Latam grassroot communities.

He is one of the founders of the Argentinean Bitcoin Community which has over 2,000 members registered on the meetups and 20,000 members in its online community. Diego organized the first bitcoin conference in Latin America (www.labitconf.com). And he has a central role in spreading the word about bitcoin in the region by contributing to the creation of grassroot communities in Brazil, Chile, Colombia, Ecuador, México, Nicaragua, Perú, Paraguay and Uruguay.

His track record also includes being part of the founding teams of Clarín Digital (main Argentina’s newspaper website), Patagon.com (financial community sold to Banco Santander for 750M), Internet Argentina (first Argentinean ISP to provide ADSL), Edunexo (provider of a SaaS platform to administer public and private educational institutions in Latin America and Spain).

Diego also held positions as R&D Manager for ElSitio.com leading a team of 25 developers and CTO at Trusted Translations, Inc.

He was also the founder of the following endeavours:

- Xinergia (leading edge web development company)

- Cero a Cien (managing and tutoring platform for entrepreneurs)

- Arraiga (IT training and labour insertion platform)

- Restocoins (payment system to ease bitcoins acceptance on restaurants and cafes)

Adrián Eidelman — Co-founder Kinetica Solutions & RSK Labs.

Education:

  • Instituto Tecnológico de Buenos Aires. Field Of Study — Marketing. Dates attended or expected graduation: 2007–2008.
  • University of Buenos Aires. Dates attended or expected graduation: 1998–2006.
  • Escuela Técnica ORT. Dates attended or expected graduation: 1992–1997.

Experience:

  • RSK Labs — CTO & Co-Founder. Dates Employed: Oct 2015 — Present. He is currently part of the core development team.
  • Kinetica Solutions — Director & Co-Founder. Dates Employed: May 2007 — Feb 2018.

Kinetica is a software development company specialized in providing innovative mobile and web solutions. Founded in 2007, they are pioneers in the adoption of agile methodologies and an industry leader in Microsoft Technologies. They are experts in new technologies like Azure, Windows 8, Windows Phone and ASP.NET MVC among others. Success stories include the development of the Windows 8 and Windows Phone applications for Clarin.com, the migration of Dineromail.com platform to ASP.NET MVC technologies and the development of the INECO research platform on Azure.

  • Agiles 2011 — Organizer. Dates Employed: Dec 2010 — Oct 2011
  • Agiles 2010, Lima — Organizer. Dates Employed: Jan 2010 — Oct 2010.
  • Agiles 2009, Florianópolis — Organizer. Dates Employed: 2009.

Ruben Altman — Co-founder.

IT professional with more than 15 years of experience in the software development industry. Ruben founded Kinetica Solutions in 2007 and have been leading it since then. He does web and mobile development for IT Departments, both in Argentina and abroad.

Specialties: Web and mobile development; Software architecture and design; Agile methodologies; Microsoft technologies; Cloud services.

Education:

  • University of Buenos Aires. Dates attended or expected graduation: 1998–2004
  • Escuela Tecnica ORT. Degree Name — Computer Technician. Field Of Study — Computings. Dates attended or expected graduation: 1992–1997.

Experience:

  • RSK Labs — Co-founder. Dates Employed: Nov 2015 — Present.
  • Kinetica Solutions — Founder and CTO. Dates Employed: Jun 2007 — Present.
  • MIVA Ltd. — Software Development Manager. Dates Employed: Oct 2005 — Feb 2007.

Managed the European Software Development team. Responsible for: technical accuracy of every solution delivered, task assignment, team leading, performance and salary reviews and achievement of objectives control. Worked closely with other teams in project planning and follow-up. Implemented several enhancements to the software development process. Was also the point of contact for an offshore team based in India that implemented changes to the existing systems.

  • NEC — Senior Developer. Dates Employed: Mar 2003 — Aug 2004.

Designed and programmed a development framework that was used by more than 20 developers. Also in charge of the front-end components of the Health Care Application.

  • Disco-Ahold International Holdings — Team Leader. Dates Employed: Oct 2000 — Feb 2003.

Managed the IT development team, which involved project planning, task assignment, achievement of objectives control and team leading. Also in charge of software architectures, designs and technologies definitions. Constantly interacted with suppliers, consultants, analysts and quality assurance personnel.

Sergio Demian Lerner — Co-founder and Chief Scientist.

Sergio is currently focused on cryptocurrencies and Bitcoin. He periodically perform security audits on the changes to the Bitcoin Core source code. He publishes his ideas in his blog Bitslog.com. He co-founded Coinspect, a computer security company focused on cryptocurrencies, and CoinFabrik, a software-factory for cryptocurrency development.

Before discovering Bitcoin Sergio led hi-tech interdisciplinary projects, from security systems with strong cryptography to real-time medical systems, data acquisition, and digital signal processing, for Pentatek.com.

Specialties: Cryptocurrencies, Bitcoin, Information security, ASICs, problem solving, algorithms.

Education:

  • University of Buenos Aires. Degree Name — Master in Computer Science. Field Of Study — Computer Science. Dates attended or expected graduation: 1995–2000. Activities and Societies: ACM programming contests.
  • Technion-Machon Technologi Le’ Israel. Degree Name — Specialization. Field Of Study — Parallel Computing, Computer Science. Dates attended or expected graduation: 1994–1994.
  • ORT Argentina. Degree Name — Bachelor of Science (BSc). Field Of Study — Computer Science. Dates attended or expected graduation: 1988–1994.

Experience:

  • RSK Labs Co-founder & Chief Scientist. Dates Employed: Nov 2015 — Present. He is in charge of the design of the RSK platform, the Bitcoin powered, web3 compatible, smart-contract platform as a Bitcoin side-chain.
  • CoinFabrik — Technical Advisor. Dates Employed: Sep 2014 — Present. CoinFabrik is a application development company specialized in Bitcoin and cryptocurrency technologies. Sergio provides advice on security, trends and the current cryptocurrency ecosystem.
  • Wayniloans — Advisor. Dates Employed: Jan 2015 — Present. Sergio advises on a long-term strategy and a short-term plan to ensure the WayniLoans IT infrastructure and the managed monetary assets are adequately protected from threats. This involves helping identify, develop and implement processes and standards across the organization to reduce IT risks and minimize the impact of incidents.
  • Coinspect — Security Auditor. Dates Employed: Jun 2014 — Present. Sergio performs security audits of cryptocurrency related companies, products, cryptography, source code and network designs.
  • NimbleCoin — Project Lead. Dates Employed: Feb 2014 — Present. Sergio manages the NimbleCoin development plan, design new features, schedule hard forks, and leads the programmers team.

Adrian Garelik — Co-Founder.

Education:

  • CIEVyC. Dates attended or expected graduation: 1998–2000.

Adrian is always looking for trends in technology, not from a technical approach but from a creative one. He has been running video streaming applications and online gaming platforms since 1998, founding dyzo.com and filmika.com. In 2014 after learning about Bitcoin and when looking for a new way of distributing video on internet, he has put together (and been part of) the team that developed RSK. After two years in charge of RSK’s branding and communication he decided to move back to video distribution. This time, using the technologies developed on RSK, and teaming with the guys behind Popcorn Time, they’ve founded Flixxo, a social economy based on video sharing. Adrian is also a script writer and film producer (“To fool a thief”, film 2013. “Bounded”, Netflix series 2018. “Unsubscribe”, film 2019).

Gabriel Kurman — Co-founder and Community Director.

Education:

  • Universidad de Buenos Aires. Degree Name — Bachelor of Science (BS). Field Of Study — Economics. Dates attended or expected graduation: 1996–2001.
  • ORT Argentina.

Experience:

  • RSK Labs — Community Director. Dates Employed: Jan 2018 — Present.
  • Koibanx — CFO/Head of Investor Relations. Dates Employed: Jan 2014 — Present.
  • Laboratorio LKM S.A. — Business Development Manager & Licenses. Dates Employed: Jan 2012 — Sep 2013.
  • Advent International — Associate. Dates Employed: Apr 2007 — Jan 2012.

And others.

Partnerships

88Insurtech

Atix Labs

B4H

Base Inc

BitGive

Bitso

Blockchain Academy Mexico

Blockgeeks

Blocklime

BTC.COM

ChronoLogic

Circle of Angels

Cryptologic

D’cent

dexFreight

Etherparty (now Vanbex)

EVShare

Exchange Union

Grupo Sabra

iBitcome

iExec

Improve-in

Infuy

Integro

Investoland

Koibanx

LNCM

Microsoft Argentina

MyCrypto

MyWish

OAKNode

Portis

RCN

StartupToken

TEMCO

Tokkenit

Watafan Dapp

Winding Tree & Zeppelin

Use case

The RSK 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 RSK gives the opportunity to developers working on Ethereum to benefit from the robustness of the Bitcoin currency and the security of the RSK blockchain. Below a list of potential smart contracts and use cases that can be developed over RSK is presented.

Micropayment Channels

Micropayment channels allow two parties to perform secure, frequent and generally low valued payments without paying on-chain transaction fees for each payment, but rather by paying a one-time fee when the channel is closed. These applications will be key building blocks for a fair and inclusive new financial system which will provide alternatives to the billions of users underserved by the current system.

2nd Layer Off-Chain Payments Networks and State Channel Networks

Micropayment channels provide the basis for second layer off-chain payment networks. Second layer networks are capable of routing payments from any participant to any other, provided there is enough channel capacity, and with low third-party trust. Second layer networks can be either instantiated by random graphs of nodes or become hub-and-spoke networks, where a low number of heavily interconnected hubs channel most inter-user payments. State Channel networks enable a set of participants to execute multi-party protocols created on-the-fly, such as games, which could result in on-chain state changes, such as token transfers, but delaying all on-chain effects to the moment the channels are closed, providing no party attempts to cheat. RSK’s rich programming language enables all these kinds of second layer networks to be implemented directly with minimal hassle.

Decentralized Exchanges (DEXs)

Decentralized Exchanges enable the creation of decentralized token and cryptocurrency markets without third-party trust. RSK supports Decentralized Exchanges in all their variants, with online or off-chain order books, with succinct proofs for order matching, from the simplest TierNolan’s protocol to the more complex protocols based on zkSNARKs.

Retail Payment Systems

RSK allows BTC to be adopted globally for every-day retail transactions. One of Bitcoin’s main limitations for retail use is its confirmation time (from ten minutes to one hour to ensure irreversibility). RSK allows consumers to benefit from Bitcoin security with payment confirmation in just a minute. Merchants will be able to accept payments almost instantaneously without requiring third party gateways. RSK also provides a higher amount of transaction per second (tps), required to succeed in the retail market. The RSK network uses the DÉCOR+ consensus protocol to prevent mining centralization when transaction volume increases.

Escrow Services

RSK allows the creation of smart escrow services where oracles can sign a transaction defining whether the escrow should be released without the oracle having custody of the funds under escrow.

Crypto-Assets Creation

RSK allows the creation of crypto-assets (tokens, altcoins, etc.) secured by the Bitcoin network. These assets can be loyalty points, utility tokens, or security tokens. Also, the tokens can be fiat-denominated and backed up fiat currency. Eventually they could be created by governments or Central Banks as a way to provide low-cost programmable money to all their citizens.

Bitcoin-Backed Token Offerings (BTOs)

BTOs are a special case of crypto-asset creation when Bitcoins are exchanged to newly minted tokens. This tool has been widely used for blockchain crowdfunding, such as Ethereum crowdfund. In the particular case of RSK, BTOs allow startups to receive the funding directly in Bitcoin, which is the most secure and stable crypto-currency that exists, while creating the tokens on the RSK blockchain secured by the Bitcoin hash rate merge-mining RSK. The whole process of token issuance can be made trustless using the services of RSK bridge.

Asset Securitization

RSK enables the creation of digital tokens backed by real assets. This can be used to digitally commercialize REITs, shares, issue debt or any other asset (or future proceed). This particular use case will provide a unique solution to those small businesses in developing countries where the traditional financial markets do now fulfill the demand for working capital or capital to grow.

Decentralized Remittances

This particular use case is especially important in developing economies where the unbanked/undocumented population has to pay usury fees to send money to their families for food and shelter. RSK enables fiat-denominated tokens and leveraging the existing infrastructure of exchanges and cash-out options so crypto-assets can provide remittances at significantly lower costs.

IP Protection/Registry

RSK enables the development of contracts that provide Proof-of-Existence (PoE). PoE enables individuals and companies alike to prove the existence of a certain document (or property right) at any given point in time with the security of the Bitcoin Blockchain. This use case could be particularly important in societies in Latin America, Africa and Asia with unreliable ID and land registration mechanisms.

Voting Systems

RSK enables the creation of digital votes that could enable extremely secure and transparent elections at minimal cost. Also, it could be used to secure a transparent voting process for company boards or decentralized organizations.

Micro-Lending

Over 50% of the global population does not have access to the traditional financial system. This lack of access to credit is a direct cause to the economic inequality that our global society faces nowadays. RSK enables the development of scalable, digital and programmable micro-lending contracts that could provide access to credit to the three billion poorest inhabitants in the world.

Supply Chain Traceability

RSK enables the creation of digital wallets to track and trace (digitally) the physical location of a certain product or batch. This type of contract could be particularly useful in international trade as well as the retail, food and healthcare industries among others. As with all the other use cases, by using RSK this could be achieved with the security of the Bitcoin Blockchain at a minimum cost.

Online Reputation & Digital Identity

One of the main problems of the developing world is the lack of documentation and IDs for the poor. This prevents the poor from voting, accessing healthcare, reporting crimes/abuses and accessing financial aid. RSK enables the creation of digital global registries as secure as the Bitcoin Blockchain at an extremely low cost.

In-Game Global Currency

Many multi-player games have in-game economies, including private currencies. As these games evolve, virtual currencies become as valuable to users as fiat money, and are often traded on secondary markets. Inflation, cheating, and online theft have become major risks and user concerns. Also, the game companies may face legal and security hurdles by having users’ virtual money in consignment. As the world globalizes, so will virtual games, and players will feel uncomfortable with the fact that money earned in one game cannot be easily spent in another game. RSK can solve these problems by allowing games to accept BTC (in equivalent Smart Bitcoins or RBTC) for their in-game payments, or create a private digital asset that is protected by RSK. RSK payments provided by second layer off-chain networks can be as fast as closed-loop systems for low denominations, so game engines can use RSK as the in-game purchase system, for player-to-player trading and for company-to-player virtual offerings. By just clicking on a URL or scanning a QR code, trading can be triggered using the standard player’s external e-wallet software, as well as paying commissions to the gaming company.

Internet-Gambling and Prediction Markets

Fast payments also mean fast payouts. Bitcoin gambling sites such as SatoshiDice managed to provide no-registration fast betting experience using zero-confirmations and chained transactions, but at a security risk for the gambling site. RSK allows betting with near instant payouts having nonzero block confirmation.

Fair-Gaming

By incorporating smart-contracts, and in conjunction with well-studied cryptographic protocols such as Mental Poker, RSK is able to provide an open and fair platform for card playing without the requirement for a trusted third-party taking a rake.

Non-Fungible Tokens (NFTs)

NFTs are unique tokens which can be linked to a specific property, license, product or service. NFTs can be easily created on RSK allowing use cases in multiple industries ranging from sports collectibles to gaming player features or “skins.”

Source

Social metrics

Github metrics
Social media activity

There are also RSK Kakao chat and Line.

Markets and volume

Information from Coinmarketcap.com:

Competitors

The following table is an attempt to compare RSK’s main features with the features of other alternatives, including the Liquid sidechain (Blockstream), and the WBTC token (BitGo). Both Liquid and WBTC are pegged to BTC. RSK team shows that essentially RSK presents better technical solutions with a low impact on decentralization.

Source

Roadmap

There is no official roadmap open to public yet.

Token Mechanics

When defining RSK business model to afford the current and future development of the platform, RSK team decided not to create a new speculative tradable coin. Instead, RSK team chose to use a fixed 2-way peg to Bitcoin, the most reliable, secure and tested virtual currency/network available in the ecosystem.

At the same time, RSK team decided to contribute back to the Bitcoin network by providing its miners the opportunity to merge-mine RSK and use all their installed capacity to validate decentralized smart contracts. In return, they will protect the RSK blockchain. As a result, every time a person or a corporation runs a smart contract on RSK, 80% of the fuel paid goes to the miners and the remaining 20% to RSK Labs, so RSK team can continue the development of the open source platform.

Source

In exchange for their work, Federation members are awarded 1% of the transaction fees generated on RSK, in order to cover the hardware and maintenance costs.

Token Metrics

The RSK platform uses Bitcoin as its native currency. A 2-Way Peg between Bitcoin blockchain and RSK blockchain ensures a fixed conversion between BTC and RBTC. (1 RBTC = 1 BTC). There can’t be pre-mining, minting, nor coin inflation on RSK.

The number of RBTC in existence is limited by the same Bitcoin issuance curve. Bitcoin issuance is algorithmically set, and halves every 4 years. There will never be more than 21M bitcoins circulating. Also the number of RBTC circulating in the RSK network is limited by the amount of BTC locked in the two-way-peg.

Source

Funding

BUENOS AIRES — March 21, 2016. RSK team is pleased to announce that in a round led by Bitmain Technology, the world’s largest bitcoin hardware mining producer, Coinsilium, a leading blockchain investment firm based in London and Digital Currency Group, the prolific investor from New York, RSK Labs raised $1 million to further develop the first smart contracts platform secured by Bitcoin and fully compatible with Ethereum. This successful round allows RSK Labs to expand its current presence in Latin America to Asia, Europe and US

Source

Unfortunately, RSK team didn’t make any posts about further rounds, only announcements on different events, but this info can be found on Crunchbase.

Summary

Team: In comparison to other projects team lacks experienced personnel from top tech companies
Idea: Ethereum capabilities for BTC
Development stage: Federated “beta” Mainnet
Whitepaper: good one, outlines all important ideas, was updated in 2019
Roadmap: not made public yet

Rootstock is an old project that has its mainnet running for over a year already, it was the first working BTC sidechain. The idea to introduce smart contracts to BTC is very ambitious, but it bore fruits, RSK Labs founders continue developing Bitcoin ecosystem and started a new project already.

But the work on RSK is not yet complete, it is still in its “beta” phase, to reach maturity RSK Labs plan to invite >60% of BTC’s mining power (so ~20% to go). I think they will succeed with that since merge-mining provides only benefits for BTC miners.

RSK ecosystem continues to grow, new partnerships are announced periodically, it would be really interesting to see if this project will achieve the same popularity as Ethereum, since security wise RSK is better with it’s anchoring to BTC and it has all of Ethereum features.

This project has a number of issues, that IMHO hinder its development:

  1. Secretiveness about federation members. Why are those members stay unnamed “for security reasons” when this is a very important thing for the community, especially since this is a very centralized entity which can affect RSK
  2. Communication is not as good as could be, not all partnerships are announced, no info about use of proceeds, info about investors isn’t that open, some posts are in spanish only.

To sum up, this project is really ambitious, despite being around for a long time is still rapidly developing, has even brighter future with the launch of RIF, potentially real ETH competitor.

This is not financial advice.

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