While some political and corporate leaders have been eager to invest in and adopt cryptocurrencies, others are entirely hostile. Turkish President Tayyip Erdogan recently declared outright war on the Bitcoin network. President Erdoğan: "We Are At War" President Erdoğan expressed his opposition to Bitcoin in a meeting with Turkish students this Saturday. The event comes after one of them asked if the country's central bank would adopt cryptocurrencies. Erdogan responded with total rejection: "We have absolutely no intention of embracing cryptocurrencies. On the…
Dapps or decentralized applications are a part of the whole Smart Contracts ecosystem. When you think about it, the applications you use on your smartphone and computers are just generalized agreements between two parties: I agree to use a product produced by the developer who agrees to satisfy my desire and increase my utility. People realized that since blockchain is on a roll to decentralize everything, why not decentralize applications? And what better way to do that than using smart contracts?
There are dozens of platforms currently operating in the blockchain sector that support and innovate the dapp ecosystem. Ethereum, NEO, Stellar, among others, have built their entire business model centered around the development of dapps. And so, with all the competition, why should one consider looking into dapps on the Bitcoin blockchain? Can the Bitcoin blockchain even support the development of dapps?
Can the Bitcoin Blockchain support Dapps?
There is a debate that argues about the feasibility of building on top of the bitcoin blockchain because bitcoin is not really a general-purpose platform like Ethereum or NEO. But then, let’s not forget the monetary value that bitcoin holds. Bitcoin’s practical value is currently questionable as it has long been blamed for its dense traffic, high transaction fees, limited block capacity, poor scalability, etc. Nevertheless, Bitcoin remains the most broadly-known blockchain network globally with the highest market cap. This makes optimization performed on top of Bitcoin still able to generate great technical value. The added layer gives Bitcoin extra capacity to perform tasks it otherwise couldn’t. The following are six widely adopted applications that run on top of Bitcoin.
The Best Dapps on the Bitcoin Blockchain
RootStock – 2-way Peg to Bitcoin
RootStock or RSK is the first open-source smart contract platform with a two-way peg to Bitcoin. What that means is that to transact on the RSK platform, a sum of BTC is first locked on the Bitcoin Blockchain through multi-signature, and then an equivalent amount of RTC is unlocked on the Rootstock platform. These RSK can then be used to make smart contracts and develop applications on the Bitcoin blockchain.
The RSK project is dedicated to expanding on the side chain technology for Bitcoin. RSK exists as a side chain with a two-way peg to Bitcoin, which in reverse can expand Bitcoin’s ecosystem. RSK has proposed a two-way peg design when applying the side chain technology as per the initial plan. The advantage of RSK includes
1) Deployment of smart contracts: RSK provides a solution to the lack of smart contracts on Bitcoin with a Turing-complete RSK Virtual Machines (RVM);
2) High transaction speed: RSK allows creating blocks at 10 seconds average interval and 300 TPS without sacrificing decentralization.
Lightning Network – The Payments Channel
Initially conceived as a solution to bitcoin’s scalability problem, Lightning Network or LN has since gained serious momentum and scope. LN now even supports cross-blockchain transactions, although the number of blockchains under LN is relatively low for now.
In essence, Lightning Network solves Bitcoin’s scalability problem by shifting transactions off-chain and increasing throughput, essentially becoming a sort of smart contract for the Bitcoin blockchain. Users of the Lightning network essentially stake their holdings in a contract off-chain and shift the ownership without going through the tedious process of propagating transactions on-chain. This also ensures that transactions stay private, for better or worse.
After several failed attempts, LN finally saw a glimmer of success in 2018 when the protocol was fully out of the beta stage and ready for large-scale use. Adopting LN went through the roof, with Zebpay, Blockstream, Copay, and Stellar discussing and implementing some form of LN.
Zen Protocol – Building Financial Products on Bitcoin
The Zen Protocol is a multipurpose platform built on the Bitcoin Blockchain that offers a huge variety of commercial solutions for the financial world looking into Bitcoin. Zen allows anyone, anytime, anywhere to create and trade financial products on the proof-of-work based Bitcoin blockchain. Zen provides users with an open marketplace for options, futures, digital currencies, and all types of financial instruments.
Unlike other platforms, Zen makes it possible to build smart contracts with real utility, making it viable for them to use real-world data and work without intermediaries or central control. Zen’s assets are created by contracts, making possible decentralized, automated escrow, meaning that Zen traders no longer need trusted counterparties.
Managing, auditing, and protecting the authenticity of data is a major challenge. Factom runs on top of Bitcoin and provides tools to make record-keeping both transparent and inexpensive.
Paul Snow and David Johnson initiated the project in January 2014 under the name Notary Chains.
Factom’s first client software version was released in January 2015, followed by a token sale in March in which 2,278 bitcoins were raised by selling Factom’s native coin Factoid to backers. Factom counts the US Department of Homeland Security as a client, among other public institutions worldwide.
Colored Coins – Segregating Transactions
Perhaps the oldest proposed application for Bitcoin, Coloured coins, have lost the craze they once had. In essence, a ‘colored coin’ is a Bitcoin transaction that has been customized by adding metadata to it. Within Bitcoin’s structure, the ColoredCoin framework makes it possible to add information to a transaction and differentiate one coin from the rest. A coin that has been customized through the addition of metadata can be used to represent a real-world asset.
The idea for placing colored coins on the Bitcoin application came up as a realization by developers that they could add data to transactions and have coins represent whatever they wanted on the blockchain.