RSK launches a Bitcoin-Ethereuem interoperability bridge
BTC smart contract platform will provide an interoperability gateway between the two biggest blockchains
The so-called trilemma of Cryptos — privacy, scalability & interoperability has been often identified as the main issues plaguing them and essential to their viability in the long-term and crucial for the prospects of mainstream adoption. The ability of individual blockchains to interact with each other is still limited at best since individual blockchains employ varying protocols, algorithms & security procedures to conduct transactions.
Having said that, there are individual interoperability solutions being currently worked on in the Cryptoverse to address this shortcoming. This is being done by employing something known as the Atomic swaps — which is basically a smart contract enabled technology that gives you the ability to exchange digital assets on-chain or off-chain seamlessly & securely without the involvement of a third-party like the centralized exchanges.
Talking about the two biggest & most important blockchain networks in Cryptoverse, namely Bitcoin (BTC) and Ethereum (ETH), there is very limited interoperability between the two. Considering BTC is the pioneer digital coin, considered a store of value & commanding an almost 70% market share, while ETH is the premier smart contract enabled dApps platform and the champion of Decentralized finance, a better interoperability feature would be pretty useful for both the projects to tap into each others’ strengths.
This is where Rootstock (RSK) comes in the picture — A smart contract solution for Bitcoin blockchain, RSK is an open-source protocol that was initially proposed in 2014. It is basically a two-way peg sidechain solution to the main Bitcoin blockchain network. To put it simply, RSK adds smart contract functionality to the Bitcoin blockchain.
The bigger news, however, is that the parent company behind the bitcoin-based smart contract platform has announced the launch of an interoperability bridge between Bitcoin and Ethereum. RSK’s parent company, IOV Labs will utilize the BTC’s sidechain smart contract solution to act as the intermediary platform between the two main networks via its native token dubbed as the rBTC (wrapped version of Bitcoin).
A two-way connection between the RSK and Ethereum ecosystems would enable the latter to access the Bitcoin blockchain. When somebody sends deposits an ether token to an address provided by the RSK, an equivalent amount of rBTC token would be generated on the sidechain.
rBTC tokens are based on the ERC-777 specification, which is backward-compatible with the popular and most commonly used ERC-20 standard, thus enabling portability on both the main networks. The supply of the token does not change in the process since the original tokens are locked up until their equivalents are redeemed.
Another solution for cross-chain transactions has been presented by Wanchain which wants to bridge the Ethereum & Bitcoin Blockchains — an interaction between the two networks. Similar to Open Federated Gateway Protocol (OFGP), an intermediary digital coin called WBTC (Wanchain’s Bitcoin cross-chain token) will be used to seamlessly conduct cross-chain transactions on the Wanchain network.
In related news recently, another startup, Money on Chain has also launched a DeFi platform based on the bitcoin sidechain Rootstock. Either way, it seems a bigger role of Bitcoin in the emerging Defi market looms large.