10

No. They can increase scale, but that is not what they are good at or intended for. Before giving a longer answer, let me first talk briefly about the difference between scale and scalability. Increasing scale means increasing the throughput or number of participants to the system. It's very easy to achieve (decreasing the time between blocks, or ...


9

As Mikka explains, sidechains don't need to create their own currency, using bitcoins in the sidechain is precisely the point of two-way peg (there's no reason why an altchain with its own currency, like say litecoin or ethereum, couldn't support 2-way peg and also become a sidechain though). Also, take into account there's several possible ways to implement ...


7

If I understand correctly, there is a second Merkle tree of witnesses mirroring the transaction data. The witness tree's root is committed to in the coinbase, but otherwise this second tree lives outside of the block. That is my understanding as well. Don't the witnesses still have to be relayed to other nodes to validate? Only nodes that actually ...


6

I do not think there is anything to reach consensus on. very small payments (in relation to the transaction fees) they belong to neither (some developers will create a micro-payment solution on the main chain and other on side chains); both are viable and it depends on the application


6

No, Rootstock does not need segregated witness. Yes, Rootstock does need another Bitcoin improvement not currently available on mainnet. Details below: Rootstock & segregated witness Segregated witness (segwit) eliminates all known third-party transaction malleability, which is an extremely useful feature but something that's only required in cases ...


6

Is lightning running on the bitcoin protocol or another blockchain? The Lightning Network operates on the Bitcoin blockchain. However it has its own network protocols and protocols with transactions. It merely uses Bitcoin transactions. The Lightning Network can be ported to different blockchains so long as they support a similar feature set to the Bitcoin ...


5

Sidechains (at least the two-way pegged sidechains, as described in our paper), are about creating a new blockchain that uses the same currency as another blockchain. Fiat isn't native to any blockchain, so it doesn't fit that category. You can't prove to the chain that fiat tokens are actually exchangable for real fiat. Fiat just doesn't live in the same ...


5

I think this is easier to understand if you abstract a little bit. On a high level, an atomic swap is very simple: the two parties set up transactions such that they can both take their coins be revealing the preimage to some (pre-decided) hash H. Initially one party knows the preimage. They must reveal it to take their coins, so the act of taking their ...


5

The lightning-network (LN) is an instant payment system built on top of Bitcoin. Its relationship to Bitcoin is akin to that of Visa card payments and the US banking system. The LN is a convenient and efficient way to pay directly from one user to another, especially for smaller amounts. Under the hood, the Lightning Network works by spanning payment ...


4

That's an interesting find! The transaction that created the output was in block 274227. The transaction that spent the output was 6 blocks later, 274233. So it's perfectly valid on the bitcoin network even though blockchain.info seems to have a glitch in the times they are reporting. If they are basing the received time of the transaction at all on the ...


4

I have no idea what that means. What is "fed-peg"? Why is that needed? When you're creating a sidechain, you need a way to move Bitcoins from the main network to your sidechain. This is pretty straightforward. Counterparty, Ethereum, and NXT had various ways of doing this. (Admittedly, none of these allowed people to turn Bitcoin into the assets on these ...


4

I'd suggest starting here: https://bitcoincore.org/en/2015/12/23/capacity-increases-faq/. There's also a SegWit adoption page on the site somewhere. Finally, this article has some details on recent testing: http://www.coindesk.com/bitcoin-scaling-segregated-witness-expected-launch/


4

Sidechains don't increase scale without changing the security. However they could allow people making lower security (e.g. lower value) transactions to opt-in to use a higher scale, lower security chain. The security would be lower for two reasons: because the security model on a side-chain is slightly different than main chain, and because if the ...


4

To do an atomic swap, you essentially need two things: The ability to do 2-of-2 multisignatures. Basically every cryptocurrency supports this, including Bitcoin and Monero, though with varying degrees of ease-of-use. In Bitcoin you can use CHECKMULTISIG opcode; in Monero (and eventually Bitcoin, I hope) you can do 2-party Schnorr signatures which are more ...


4

You can easily verify the liquid circulation, in fact any liquid node can do this in realtime as part of its operation if you run a Bitcoin node along side it. Pegins can't, however, be reconized until after they're claimed on the sidechain. Before then the addresses are cryptographically indistinguishable from other similar multisig transactions on ...


4

Spacechains are a combination of two ideas, blind merge mining and perpetual one-way peg. The combined concept is called space chains. Mentioned few points from the transcript of Youtube Video by Ruben Somsen: https://www.youtube.com/watch?v=N2ow4Q34Jeg So the key points are we're going to create some kind of blockchain but we're going to do it by ...


3

Summarized from Bitcoin Core's Segregated Witness announcement: The original version of SegWit was implemented in April through June 2015 for the Elements Project. It has facilitated every transaction on the Elements-based sidechains since then. The new softfork-variant of SegWit moved to the multi-user testing stage in December 2015 by activating on the ...


3

Federated peg is described in Appendix A of the sidechain whitepaper, https://blockstream.com/sidechains.pdf . I don't completely understand the details but here is an overview. In order to implement sidechains in the ideal fashion, the Bitcoin protocol must be modified. It is difficult to gain consensus for such a modification. However, in the meantime, "...


3

A side chain is a blockchain that runs parallel to the main bitcoin blockchain and can synchronize with it directly, allowing decentralized value transfer between the two chains. A user is able to essentially lock up a certain amount of coin on the main bitcoin block chain which then frees up an equivalent amount of coin on the side chain. This side chain ...


3

No, you cannot set the exchange rate between your private coins and the pegged coins, because you cannot issue the pegged coins yourself. The chain the pegged coins come from do still keeps track of how many coins were moved out, and there can't be more that come back. That would violate the sender chain's consensus rules. So say your sidechain holds 100 ...


3

Sidechains cannot create the same asset that is pegged to Bitcoins to use as a reward for mining. Obviously, it would be problematic if anyone could put in a certain amount of Bitcoins into a sidechain, and get out more/less than what was originally put in. However, there are many other ways to reward miners. Transaction fees is one example that is also ...


3

Portions of this are copied from my answer to Scott's question. This particular proposal only requires one change to Bitcoin: SPV proving. SPV proving is required when you want to move Bitcoins from the sidechain to the mainchain. The idea is that rather than putting all of the rules to validate transactions on the other chain into the original Bitcoin ...


3

A sidechain requires one or more blockchains, aside from the parent chain. This is different from off-chain, which is what would be the case in some types of Coinbase transactions. Since you didn't mention the presence of an additional blockchain in your other reference to a 3rd party which provides tokens in exchange for a payment, I would assume (albeit ...


3

Sidechains are supposed to make it possible for users to move bitcoins between different bitcoin-based blockchains with different rule sets. For example, in this way, new techniques for preserving the privacy of transactions or a smart contract system similar to ethereum's could be added to a bitcoin blockchain, without changing the bitcoin blockchain. They ...


3

Basically this depends on the knowledge of random number X : Bitcoin TX1 (To redeem: reveal secret number X or refund) A -------> B ----> Altcoin TX2 (To redeem: reveal secret number X or refund) B -------> A ----> So in both cases the refund transaction(signed by both A and B) is a lock time transaction so that ...


3

destroyamount is the rpc call you are looking for https://github.com/Blockstream/liquid/blob/3f937d39f7c516e49f62d05c12d41b63b79ca043/src/wallet/rpcwallet.cpp#L586


3

No, it would not. --reindex only handles the data that is stored on disk. Blocks are stored in the order that they are received, which is what brought you to your current view of the blockchain. So all that would happen is that you end up at that same state. Switching to another blockchain fork requires your node to be aware of it, so you need to have ...


2

This particular proposal only requires one change to Bitcoin: Simplified Payment Verification (SPV) proving. SPV proving is required when you want to move Bitcoins from the sidechain to the mainchain. The idea is that rather than putting all of the rules to validate transactions on the other chain into the original Bitcoin client, Bitcoin clients would ...


2

It means that, unfortunately, they still can't figure out how to make a sidechain work without either a central authority or its own independently-mined chain (i.e. a full-fledged altcoin). This is sad, because it was the one thing they kept promising sidechains would bring us. But yet we're still back where we started: if you want a cryptocurrency with a ...


2

Who does make the decision which feature of bitcoin to include? The Bitcoin Core developers, particularly the ones with commit access, make the ultimate decision about what features to add to Bitcoin Core---but they do listen to community feedback, particularly polite and knowledgeable comments left on GitHub pull requests. What will be the procedure of ...


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