smart-contracts

The Many Facts Pointing to Wei Dai Being Satoshi

01/04/2020 by Idelto Editor

Satoshi Nakamoto has been an enigma for well over a decade and there’s been a number of suspects and self-styled Bitcoin inventors. One particular suspect is the computer engineer Wei Dai, the creator of the b-money system and the Crypto++ cryptographic library. Since the Bitcoin network was launched in 2009, a number of people have had suspicions that Wei Dai could have played the role of Nakamoto.

Also Read: The Many Facts Pointing to Ian Grigg Being Satoshi

Wei Dai and Satoshi Nakamoto

We don’t know who is behind the real identity of the person or group of people that created Bitcoin. The anonymous creator(s) not only invented the concept of cryptocurrency, but also managed to keep the identity of Satoshi Nakamoto a secret for more than 11 years. In our fifth installment of the “Many Facts” series, we discussed how Dorian Nakamoto was mistaken for being the anonymous Bitcoin creator in 2014. The following is the sixth installment in the series, offering a comprehensive look at the circumstantial evidence that might point to Wei Dai being Satoshi. Dai is a well known cypherpunk and he is referenced in the citations section at the end of the Bitcoin white paper. Over the last decade, a number of speculators have assumed Dai might be the cryptocurrency’s creator and a few armchair sleuths have tried to tie the two together as one.

One reason people think that Dai played the Nakamoto part, is because the talented cryptographer has the smarts to pull it off. Moreover, Dai created a C++ library for cryptographic functions called Crypto++ and he’s still a member of the academic and cypherpunk community. Dai is also a staunch supporter of privacy and the New York Times described the cryptographer as an “intensely private computer engineer.” Dai’s theories about anonymous electronic cash infrastructure can also be found on the cypherpunks mailing list well before Bitcoin was released. The cryptographer also crafted an electronic money system called “b-money” and it is the reason he is referenced in the Bitcoin white paper. In addition to his white paper reference, Dai and Nakamoto also exchanged a few emails in 2008, according to documents hosted on gwern.net.

Gwern.net hosts a few emails sent to Dai in 2008 that were originally published in a Sunday Times article in 2014. In the email pictured above, Satoshi explains that he’s finished the first version of the Bitcoin protocol.

B-money is an interesting system and Dai explained in 1998 that Tim May’s crypto-anarchy “fascinated” him. “Unlike the communities traditionally associated with the word ‘anarchy,’ in a crypto-anarchy the government is not temporarily destroyed but permanently forbidden and permanently unnecessary,” Dai wrote in the first section of the b-money white paper. “It’s a community where the threat of violence is impotent because violence is impossible, and violence is impossible because its participants cannot be linked to their true names or physical locations,” the computer engineer added.

An excerpt from Wei Dai’s “b-money” system.

Expanding Ideas

Dai was already a well-established character well before Satoshi allegedly emailed him in order to discuss peer-to-peer electronic cash concepts. In the 2008 emails, the two discuss Nick Szabo and Dai assumes that the conversations prove Szabo could not be Nakamoto. The emails between Nakamoto and Dai were originally published in March 2014’s Sunday Times editorial. “The more important reason for me thinking Nick isn’t Satoshi, is the parts of Satoshi’s emails to me that are quoted in the Sunday Times,” Dai wrote. On August 22, 2008, Satoshi Nakamoto wrote to Dai and said:

I was very interested to read your b-money page. I’m getting ready to release a paper that expands on your ideas into a complete working system.

Further, the entropy similarities between Wei Dai and Satoshi Nakamoto’s written text also adds to the list of supporting evidence that Dai could be the mysterious creator. The only person who scored higher than Dai was former Bitcoin Core developer Gavin Andresen. Craig Wright, the self-proclaimed Satoshi who has yet to prove himself, has 12 people above him after Dai.

Some speculators hunting for Satoshi Nakamoto believe that the creator of Bitcoin could have easily played two roles with any one of his correspondents. Just because Wei Dai and Nakamoto have had conversations it doesn’t mean people haven’t assumed they are the same person. Other people who had engaged with Nakamoto who have been considered ‘Satoshi suspects’ as well include Hal Finney, Nick Szabo, James Donald, Gavin Andresen, and others.

Other than mere circumstances and coincidence, there’s really not a smoking gun pointing to Dai actually being Nakamoto and he’s never admitted it either. Theories of Dai being Nakamoto are also dismissed because Dai and Nakamoto engaged in email conversations and he’s referenced in the white paper, so he would have to be playing ‘double agent’ roles. But that hasn’t stopped speculators in the crypto community who believe people like James Donald and Hal Finney could have been Nakamoto too and played double roles.

Do you think Wei Dai could be Satoshi? Let us know in the comments below.

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The King of Blockchains, Bitcoin Can Become the Foundation for Web 3.0

24/03/2020 by Idelto Editor

Bitcoin remains the undisputed “king” of blockchains. Bitcoin’s dominance has increased significantly since the experimental times of 2017. Bitcoin has survived many attempted forks and “civil wars” and has established itself as the reserve cryptocurrency; people fall back to Bitcoin in bear markets. The production network has stood the test of time for over 10 years now.

However, the crypto industry has dismissed Bitcoin when it comes to smart contracts or Web 3.0. I believe this is going to change.

It’s true that Bitcoin cannot do everything. Bitcoin is secure because it has a limited scripting language. Bitcoin is reliable and durable because it doesn’t change. This does not mean that the developer ecosystem around Bitcoin cannot innovate and enable support for Web 3.0. As the crypto industry makes progress toward Web 3.0, we’ll come to realize that it’s hard to beat the security and network effects of Bitcoin.

Despite several initiatives by potential competitors, the hashrate of the Bitcoin network and the security offered by its proof-of-work (PoW) mining remain unparalleled to this day. For years, new cryptocurrencies have attempted to launch their own native PoW networks; none has approached Bitcoin’s success.

Bitcoin has network effects. Most people are introduced to cryptocurrencies through Bitcoin. If something can be done on top of Bitcoin, it will eventually get done on top of Bitcoin rather than a smaller ecosystem. Network effects make Bitcoin’s success self-reinforcing: Miners see that the network is established, that the community is strong and that the currency is the “hardest” money in the crypto space. Miners join or expand their commitment, increasing hashpower and network reliability; their entry inspires still more holders and businesses, increasing community support. The cycle goes on.

Smart Contracts on Bitcoin

Despite the success of Bitcoin, critics who question Bitcoin’s capacity for innovation have some valid points. There are aspects of Bitcoin that frustrate developers who wish to explore the world of smart contracts and decentralized apps. Many projects have created their own blockchains because they perceive Bitcoin’s scripting limitations as a dealbreaker. They cannot deny the original chain’s security, but they also wish they could write more expressive smart contracts. New blockchains find themselves struggling with poor, native PoW security, and often attempt jumps to proof of stake (PoS) or delegated PoS setups which may be less secure and tend toward centralization.

As a result, several crypto projects have concluded that they must pick their poison: They must either attempt to bootstrap a native PoW chain or else establish a PoS chain, with all of the tradeoffs that entails.

But these are not the only options. There is a different path available: Smart contract platforms can employ Bitcoin’s PoW security to safeguard new blockchains.

New protocols can anchor to the security of Bitcoin and extend Bitcoin’s utility. Transactions that settle on Bitcoin are harder to reorganize than they are on any other network. This is an under-explored design space but one which is beginning to change.

The Bitcoin blockchain already has security derived from its energy expenditure and this security may be passed on to the interconnected chain by using concepts like proof-of-transfer (PoX). It’s important to recognize that interconnected chains differ from traditional sidechains; interconnected chains create their own crypto assets, but they utilize the Bitcoin chain for broadcasting mining operations and consensus steps. An interconnected chain anchored to Bitcoin is a win-win proposition for all parties as the new blockchain benefits from the reliability, and longevity of Bitcoin while providing freedom and flexibility to developers working with the interconnected chain.

The Bitcoin blockchain can also reap benefits, acquiring new and powerful use cases. These can attract new miners and new network participants, further solidifying Bitcoin’s place as the reserve cryptocurrency.

Smart contract platforms, and I include my own project, Blockstack, in this, understand how powerful on-chain contracts can be. But just as you don’t need to build all new roads to drive new cars, there’s no need to reinvent PoW or PoS chains to employ robust smart contracts or to launch new blockchains. The solid foundation we need to realize our vision for Web 3.0 is already here; a future Web 3.0 can anchor on Bitcoin.

Image credit: William Krause on Unsplash

This is an op ed contribution by Muneeb Ali. Views expressed are his own and do not necessarily reflect those of Bitcoin Magazine or BTC Inc.

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India Unveils National Blockchain Strategy, Calling on RBI to Issue Digital Currency

29/01/2020 by Idelto Editor

India’s National Strategy on Blockchain has been published. It recommends, among other things, for the Reserve Bank of India (RBI) to issue a central bank digital currency. The Ministry of Electronics and Information Technology tasked the National Institute for Smart Government with drafting this national policy.

Also read: Regulatory Roundup — New US Crypto Tax Bill, Central Banks Join Forces on Digital Currencies

India’s National Blockchain Strategy

The Indian National Institute for Smart Government (NISG) has published a draft “National Strategy on Blockchain,” local media reported on Tuesday. The institute was tasked with preparing the policy in July last year by the National e-Governance Division, under the Ministry of Electronics and Information Technology (MeitY).

The document examines blockchain technologies, smart contract applications, challenges to blockchain adoption, the societal impact of the technology, the role of government, and national strategy principles. It suggests the regulatory approach to blockchain technology the Indian government could adopt, emphasizing that regulations should be based on the functions performed by the technology and not the technology itself. The institute has invited stakeholders to submit comments.

Commenting on the strategy, Policy 4.0 CEO Tanvi Ratna was quoted by the Economic Times on Tuesday as saying:

The policy states that there is a lack of regulatory clarity and not enough awareness in the government on the technology, but the suggestion to set the policy at a national level may not work in case of cryptocurrency regulation.

“We have seen with all regulatory evolution with the internet era as well that states, if given the space to innovate and compete for talent and growth, can often devise very different approaches,” she opined. “This is definitely the case in the U.S. where states like California, Delaware and New York have usually been well ahead of the federal government and it is also the case in India where states like Karnataka, Andhra, Telangana have often pioneered policy models that get adopted at national levels.”

NISG is a nonprofit public-private partnership set up in May 2002, with 51% equity contributed by the private sector and 49% by the public sector. It was established by the Indian government’s Department of Information Technology and the Department of Administrative Reforms. Its main promoters are the governments of India and Andhra Pradesh and the National Association of Software and Services Companies (NASSCOM).

Blockchain Adoption Within Existing Indian Laws

In addition to evaluating blockchain projects of various countries such as Estonia, Dubai, and China, the paper details the legal challenges in blockchain adoption in India. It begins with a look at the April 2018 circular issued by the central bank which prohibits banks from providing services to crypto businesses. The country’s supreme court has recently concluded hearing the arguments against this banking ban. Referencing the RBI circular, the document notes:

There is a lack of clarity on whether activities involving tokenization also come under the circular’s purview. Nonrepudiation requirements in banking regulation that require in-person verification for several activities defeat the purpose of implementing a blockchain-based technological solution.

The SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis of blockchain technology and its current status in India. Source: The National Strategy on Blockchain paper.

The document also points out a number of existing laws that are not adequate for blockchain technology. “There is also lack of clarity on whether ‘digital contracts’ executed on blockchain are recognizable and enforceable by law … Ambiguity exists as to whether tokens issued on a blockchain can be categorized as ‘securities’ under the Securities Contract (Regulation) Act, 1956.”

RBI Urged to Issue Digital Rupee

The concept of a central bank digital rupee administered through a national permissioned blockchain that can run decentralized applications, written in Turing complete programming languages and offers trust-as-a-service, was also discussed.

The document points out that India, with over 1.3 billion people and a huge concentration of smartphones, is one of the world’s largest generators of online data. It asserts that blockchain technology could allow the monetization of this data in a secure and anonymized manner, thereby catapulting India to become one of the richest countries in the world. “This implies an urgent need to set up a trusted and centralized data repository, and a mechanism to enable citizens and organizations to monetize the data in a secure and credible manner,” the document states.

“As an alternative to public blockchains that operate with native cryptocurrency, like Ethereum,” the paper elaborates:

It is strongly recommended that Government of India along with RBI come out with a Central Bank Digital INR (CBDR) administered over a public permissioned blockchain that processes transactions through a Turing complete virtual machine allowing decentralised applications to run on its platform.

“The advantage of offering CBDR is that it can allow the Indian blockchain developers and entrepreneurs to create and run decentralized applications like in the case of the open source permissionless blockchains like Ethereum, EOS etc., while benefiting from regulatory oversight and corresponding protection,” the paper continues. It further mentions different central bank digital currency approaches: private, public, and hybrid.

Referencing existing blockchain systems, the strategy proposes that similar applications can be used to anchor their hashes on a public permissioned blockchain created by the Indian government and the RBI that are also powered by the digital rupee on the ledger, adding:

We foresee a lot of decentralized applications and a number of permissioned enterprise blockchain applications built in the country in the future that can leverage the infrastructure of a National Blockchain Platform and also move towards secure tokenization of assets on the same.

What do you think of India’s national blockchain strategy? Let us know in the comments section below.

Disclaimer: This article is for informational purposes only. It is not an offer or solicitation of an offer to buy or sell, or a recommendation, endorsement, or sponsorship of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Images courtesy of Shutterstock and NISG.

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Why Nick Szabo Probably Isn’t Satoshi

02/01/2020 by Idelto Editor

Search online for ‘possible creators of Bitcoin’ and Bit Gold creator Nick Szabo will always appear near the top of the list. His long history in the cypherpunk space, his writings on money, digital cash, and smart contracts, and some facts about his past have often been used to create a compelling picture that he is Satoshi Nakamoto. But many of the facts are misinterpreted and actually point against this theory.

Also Read: “I Designed Bitcoi… Gold” – The Many Facts Pointing to Nick Being Satoshi

Why It Even Matters

Bit Gold creator Nick Szabo is probably not Satoshi. He is not even one of the pretend Satoshis. He has said publicly several times that he is not the creator of Bitcoin. For years though, small-block bitcoiners have successfully used Szabo’s theoretical Satoshiness in the Bitcoin scaling debate to argue against changes to Bitcoin that would allow it to work better as fast, reliable digital cash.

A Useful Talking Point

During the 2017 Segwit2x fork, Litecoin creator and small-blocker Charlie Lee went as far as to use Szabo’s possible Satoshiness as an argument against an increase to BTC’s block size that would have prevented the spike in fees that occurred at the end of 2017, with the growth of forks like BCH and BSV, and helped push BTC into a two-year dark age in which adoption and price have stagnated.

In my opinion, Nick Szabo is the closest we have to Satoshi, if not Satoshi himself. With Nick and all of Bitcoin Core devs against Segwit2x, why are people still pushing for this hardfork that will split the chain?

More recently, small-blocker Dan Held shared what he said were similarities between Satoshi and Szabo to argue that Bitcoin was not intended primarily as a medium of exchange, but as a collectible and store of value.

Satoshi even refers to the earlier use of Bitcoin being a “collectible” before SoV/MoE just like Nick Szabo.

This is incorrect. Satoshi wrote he believed Bitcoin would bootstrap because it had utility and defined its earliest uses in an email on the Cryptography Mailing List as a utility token, not a collectible.

As long as someone can theoretically imagine Szabo being Satoshi though, people will be able to use him to support arguments that might otherwise be discredited with Satoshi’s writing alone. Interestingly, there’s a remarkable amount of evidence against the Szabo-Satoshi theory. Let’s put it to rest by refuting three of the popular arguments.

Why Szabo Probably Isn’t Satoshi

Claim: Satoshi was a cypherpunk like Nick Szabo

Nearly all the popular theories about the origins of Bitcoin place it firmly within the cypherpunk tradition of anarchist digital cash. The idea is that Satoshi was simply the end of a long road pioneered by cypherpunks like b-money creator Wei Dai and Nick Szabo, and that indeed because of this, Satoshi could even be Szabo. It isn’t totally baseless. In 2010, Satoshi wrote that Bitcoin is “an implementation of Wei Dai’s b-money … and Nick Szabo’s Bitgold proposal.” But there’s another explanation for this.

Thanks to statements from cypherpunk Adam Back and emails from Wei Dai, we know that Satoshi was back-crediting and citation stuffing when he said this, and that before creating Bitcoin he was likely not even aware of the prominent earlier cypherpunk attempts to create digital cash like Nick Szabo would have been.

It goes all the way back to around mid-2008, several months before Satoshi announced the whitepaper to the Cryptography Mailing List. Satoshi contacted Adam Back, who according to him suggested he contact b-money creator Wei Dai because the idea for Bitcoin sounded similar to Wei’s earlier proposal. Adam wrote that he believes it was he who got Wei Dai’s b-money reference added to Satoshi’s Bitcoin paper. In other words, Satoshi, unlike Szabo, was ignorant of b-money until Back told him about it and only added the citation to the whitepaper because Back told him about it.

Back hasn’t released any emails, but we can confirm this conversation probably took place because Wei Dai has released the emails Satoshi sent him after communicating with Back.

I’m getting ready to release a paper that expands on your ideas into a complete working system. Adam Back (hashcash.org) noticed the similarities and pointed me to your site. I need to find out the year of publication of your b-money page for the citation in my paper.

Two things are important here. 1) Satoshi didn’t even know the date to the b-money paper, information which Szabo definitely would have had, and 2) his point that Bitcoin “expands on your ideas” clearly does not mean that Satoshi was literally influenced by b-money or aware of it before creating Bitcoin. He was simply giving credit to someone who independently had some similar ideas before him and spreading the word about his new project. Wei tells us as much himself.

My understanding is that the creator of Bitcoin, who goes by the name Satoshi Nakamoto, didn’t even read my article before reinventing the idea himself. He learned about it afterward and credited me in his paper. So my connection with the project is quite limited.

He also has said that “in Satoshi’s early emails to me he was apparently unaware of Nick Szabo’s ideas.” So much for the cypherpunk origin theory of Bitcoin and its relationship to b-money and Bit Gold. It looks like Satoshi just wanted to pad his work for credibility. Szabo might be a cypherpunk, but Satoshi doesn’t appear to have been one.

Claim: Satoshi and Szabo share the same vision for Bitcoin

As we saw earlier, Charlie Lee used the shared vision argument to justify his opposition to the Segwit 2x fork, but a look at the evidence shows Szabo and Satoshi say almost entirely opposite things about important parts of Bitcoin. Compare what Szabo wrote in 2018 about scaling Bitcoin for small payments to what Satoshi wrote 10 years before.

Szabo: “I’ve always thought of Bitcoin as evolving into a settlements-and-large-payments layer that in the long term needed a layer 2 for consumer payments.”

Satoshi: “[Micropayments] can become more practical if I implement client-only mode and the number of network nodes consolidates into a smaller number of professional server farms. Whatever size micropayments you need will eventually be practical. I think in 5 or 10 years, the bandwidth and storage will seem trivial.”

While Satoshi expected Bitcoin to scale onchain according to Moore’s Law using large, professional server farms, Szabo says he has always believed that digital cash would require a base settlement layer and a second payment layer. Even 15 years before Satoshi published the Bitcoin whitepaper, Szabo explained on the Cypherpunk Mailing List a two-layer digital cash that is very different from Bitcoin: “accumulating credits/debits for use of on-line services (including travel services, concert tickets, etc. purchased on-line), eventually paid for by some “real” currency: FRNs, yen, etc. Implemented with Chaum-style protocol to prevent forgery and assure privacy.”

Let’s look at two more quotes to be sure Satoshi and Szabo don’t agree.

Szabo: “…we can have multiple protocol layers instead of separate kinds of physical objects. Bitcoin the settlement & large payments layer is the “gold”; layer 2s or 3s used for retail are the “silver” and “copper”, smaller but pegged to layer 1.”

Satoshi: “Gold mining is a waste, but that waste is far less than the utility of having gold available as a medium of exchange. I think the case will be the same for Bitcoin. The utility of the exchanges made possible by Bitcoin will far exceed the cost of electricity used.”

Satoshi and Szabo both refer to gold, but while Szabo called gold a settlement too, Satoshi specifically calls it a medium of exchange in his comparison to Bitcoin. In other words, Szabo thinks Bitcoin is for settlement while Satoshi thought Bitcoin was for payments. Szabo is a small-blocker, Satoshi was a big-blocker.

Claim: Nick Szabo deliberately altered his blog to hide his tracks

Did Szabo really alter a blog post about Bit Gold? He did. In 2008, Szabo dated a blog post from 2005 to December 2008, nearly two months after the Bitcoin whitepaper was released. Szabo-Satoshi theorists have jumped on this for years as the definitive smoking gun that proves Szabo was trying to mask his involvement in Bitcoin by making it appear he was working on Bit Gold at the same time Satoshi was releasing Bitcoin, but some searching shows this isn’t as scandalous as it appears. Szabo explained this in a post on August 20, 2008 announcing that he would be doing this so that he could bump his better articles to the front of the site as ‘reruns.’

Unenumerated is going into reruns season. For the next few weeks I will be reposting the best articles from this blog. These will mostly be posts from previous years, so unless you have been a reader since the beginning or have read most of the archives many of these will be new to you.

A web archive search of the 2006 article Wet code and dry shows he began changing dates to 2008 only a few days after the announcement, just like he said he would. Redating old posts so they appear at the top in the newsfeed is a well-known practice among bloggers and Nick redated several other posts in 2008 and 2009, including The Kula Ring, which was written in 2005 but now shows September 22nd as the date.

There’s no smoking gun here, just a common blogging practice.

Final Thoughts

What we’re left with after all this is substantially more difficulty making the case Szabo is Satoshi. Satoshi doesn’t match up nearly as well with the cypherpunk origin myths that have been common for so long which are essential for the Szabo theory, his vision for scaling Bitcoin is the opposite of Szabo’s, and the popular smoking gun theory about Szabo’s blog turns out to be much ado about nothing.

If Nick Szabo is Satoshi, he has done a remarkable job of leaving bread crumbs that point the opposite way. From what we know about Satoshi Nakamoto’s abilities, admittedly, that’s not entirely inconceivable.

Who do you think is Satoshi? One person? Many? Let us know in the comments section below.

Images credits: Shutterstock, fair use.

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Why Tokenized Projects Are Building on Bitcoin

19/11/2019 by Idelto Editor

Bitcoin is something you hodl. Ethereum is something you build on. At least that has long been the official narrative, with projects favoring dedicated smart contract networks over Bitcoin for spinning out dapps and second layer solutions. Like all crypto narratives, however, this one has started to shift, as projects reappraise the benefits of crafting censorship-resistant applications anchored to Bitcoin Core and Bitcoin Cash.

Also read: Coinex Chain Launches Tokens Anchored to BTC and BCH

Why Businesses Are Issuing Tokens on SLP

Businesses of all kinds are issuing tokens on the Bitcoin Cash network using Simple Ledger Protocol. It essentially works as a simplified version of Ethereum’s ERC20 token standard, enabling anyone to create and issue a native token in a matter of minutes. Bitcoin Cash – like Bitcoin Core – is not a smart contract blockchain, and thus lacks Ethereum’s Turing completeness, which enables the creation of tokenized systems with complex logic programmed in. Most projects don’t need to issue a token with the sophistication of something like Maker’s dai, however: the ability to mint and issue tokens, anchored to the security of a robust proof-of-work chain, is enough.

There are two main reasons why businesses have been building on Bitcoin Cash with SLP. The first is that they are already ideologically or pragmatically aligned with the network, possibly on account of its ultra-low fees and scalability. The other is that the shortcomings of traditional smart contract networks such as Ethereum and EOS have given them cause to seek sanctuary in BCH. Ethereum’s fees rose significantly this year, exacerbated by Tether’s takeover of the network following USDT’s migration to the ERC20 standard. Fears of creeping centralization on Ethereum, and the baked in centralization on EOS haven’t helped either network either. Projects now using Simple Ledger Protocol include an electric bike company and Sideshift.ai, which has created a BTC-anchored token on BCH.

Why RSK Is Building on Bitcoin

Over on BTC, second layer development work is kicking into gear, with RSK the most prominent company spearheading the Bitcoin building revival. CEO Diego Gutiérrez Zaldívar told news.Bitcoin.com that the company favored creating a smart contract infrastructure on top of Bitcoin due to the security guarantees and developmental certainty that it yields, explaining: “A two-way peg between Smart Bitcoin (RBTC) and BTC means users can access a fully smart contract-enabled environment that’s bolstered by the proof of work from miners that secure the Bitcoin blockchain through merged-mining. Bitcoin has proved it is here to stay, and we believe it will enable an internet of value ecosystem with a very bright future.”

“Recently, IOV Labs, RSK and RIF OS have increased their global reach and have taken crucial steps to introduce Bitcoin and RSK Smart Contract technologies to a wider audience,” noted Zaldívar. “Through these steps, we expect to receive community and user feedback and to make the necessary adjustments for Bitcoin and RSK to reach more people.” While Bitcoin’s security model is unrivaled, convincing businesses to build upon a blockchain that is not synonymous with smart contracts requires education and demonstration of how this works in practice. To achieve this, RSK’s parent company IOV Labs has embarked on a whirlwind global outreach effort, onboarding companies in major territories along the way. This has included partnering with NXTP, a Latin America-based accelerator, investing in three blockchain projects – Vega, Multis, and Pocket Network – and acquiring social network Taringa.

Why Other Blockchains Are Anchoring to Bitcoin

Not every project is looking to issue dapps and middleware upon Bitcoin: some simply want to capitalize on its security and its neatly timestamped blocks, which can be used to anchor an array of other blockchains. Bitcoin serves as the fulcrum around which these chains revolve, effectively forming a Schelling point. Numerous projects have tapped into Bitcoin’s security in this manner over the years, most recently Veriblock.

The project utilizes “proof-of-proof,” a meta-sounding consensus mechanism that encodes proof into BTC’s OP_ Return field. Veriblock promises to deliver Bitcoin-level security for new and established blockchains, reducing the risk of double spends and 51% attacks. As Veriblock explains, Bitcoin is “the golden standard of security” with “more than 40 times the thermos-equivalent computational power to the world’s fastest supercomputer.”

The Ease of Building on Bitcoin

The two Bitcoins – Core and Cash – have a number of advantages for projects seeking to build upon them, over and above security. The deep liquidity that BTC in particular enjoys, coupled with its broad adoption, places it at an advantage over smart contract networks such as Ethereum. Bitcoin Cash, meanwhile, is very developer-friendly, with Bitcoin.com’s developer portal providing a complete toolkit for the purpose of launching BCH-based applications.

Outside of RSK’s ecosystem, most of the development work occurring with BTC currently revolves around Lightning Network (LN). Due to the complexity of LN, however, it is less developer-friendly than Bitcoin Cash as it stands. Once Lightning Network becomes production ready, it may spawn a cottage industry of LN-based apps (‘Lapps’) and BTC-powered financial solutions. Meanwhile, Bitcoin Core and Bitcoin Cash will remain an attractive proposition to projects enticed by the unrivaled security provided by proof-of-work.

Do you think BTC and BCH can compete with smart contract blockchains such as Ethereum? Let us know in the comments section below.

Images courtesy of Shutterstock.

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