Olympian INU plans to allow web3 artists to access a platform to create and share art with collectors worldwide. Through its tokenomics, dynamic events, and roadmap for growth, Olympian INU aims to offer an exciting opportunity for creators and enthusiasts alike. In today's review, let us look at the project's features more closely. What Is Olympian INU? Olympian INU seeks to bring web3 artists to Arbitrum, creating a thriving NFT market for collectors and artists alike. By burning $OPI tokens…
Drivechain: The Bitcoin Upgrade to End All Altcoins?
Bitcoin, the world’s first cryptocurrency, regularly faces criticism for having ‘outdated’ tech and a tendency to evolve slowly relative to the rest of crypto. This leaves altcoin projects looking to build on Satoshi’s original invention room to differentiate and compete through added features, such as faster throughput, smart contracts, and tokenization.
However, a hotly-debated Bitcoin upgrade called “Drivechain” seeks to introduce these benefits to Bitcoin by opening up its development possibilities in one fell swoop. So what is Drivechain, its benefits, and what are the potential downsides?
What is Drivechain?
“Drivechain” – defined in BIP 300 and BIP 301 – is a proposed Bitcoin soft fork allowing users to create sidechains freely.
Sidechains are separate blockchains pegged 1:1 with the Bitcoin network, allowing users to send their BTC to and retrieve their BTC from the sidechain at any time.
According to drivechain.info, these novel sidechains maintain their Bitcoin peg differently from sidechains of the past. For example, they use neither a federated peg nor verifiable proofs but instead a “conjecture-and-refutation” model:
“A “bundle” of transfers is asserted, and then slowly “ACKed” over time. After three months of ACKing, the bundle succeeds. Thus, the SC:BTC market price cannot deviate significantly from a 1:1 ratio.” the site states.
For Drivechain to work, Bitcoin users (nodes) only need to enforce simple rules in BIP 300 and BIP 301. Meanwhile, sidechains can be validated by separate software while being completely ignored by mainchain nodes and enforcing different rules from the original Bitcoin network.
Countless sidechains can be created, thus allowing Bitcoiners to transact in many new ways with their BTC. Meanwhile, Bitcoiners that wish to stick to the tried and true rules of the main chain can continue to do so.
Benefits of Drivechain:
Here’s a summary of the biggest benefits Drivechain has to offer.
Bitcoin’s base layer processes transactions relatively slowly due to its 1-megabyte block size limit and 10-minute block speeds. This makes for slow confirmation times and overburdensome fees when the network gets congested, inhibiting Bitcoin’s daily payment usability.
Taking transaction throughput off the base chain and onto a sidechain can help transactions process faster and more cheaply. This is especially true if a given sidechain uses larger blocks / faster block times. In conjunction with other layer 2 solutions like Bitcoin’s lightning network, Bitcoin’s feasibility as a medium of exchange is further enhanced.
Drivechain allows for more flexible blockchains with better privacy guarantees or permissioned access. In some contexts, that’s an advantage over the mainnet – which publicly tracks the movement of every BTC transaction.
Such sidechains can be used for institutional or enterprise applications that require differing tradeoffs. An example of an existing sidechain offering similar benefits is Liquid.
Drivechain can bring features and functionality to the Bitcoin network that has grown historically popular with its greatest competitor, Ethereum. That means a sidechain can feature the more complex transaction types like those seen in Ethereum’s DeFi ecosystem, expanding Bitcoin’s use case as decentralized money. An existing sidechain offering this use case would be Stacks.
Alternatively, a sidechain similar to Rootstock could be recreated, enabling the tokenization and NFTs on Bitcoin, creating a much more expansive blockchain-based economy.
Sidechains can boost Bitcoin’s security by providing greater incentives to Bitcoin miners through transaction fees. The effect of a more flexible, feature-rich network on the blockchain’s security budget is clear when comparing Ethereum’s fee revenue to that of Bitcoin in its current form.
A thriving fee market will ensure Bitcoin’s hash rate security remains high even as its block subsidy declines over time.
Risks of Drivechain
Here are some of the arguments of those against implementing Drivechain.
Privacy is a double-edged sword. It enhances user freedom. However, creating private and permissioned blockchains may also help facilitate illegal transactions. This would make it harder for regulators and law enforcement to track criminals.
Part of Bitcoin’s appeal is its simplicity and focus on being money. However, adding more complexity to the protocol can make it more difficult for new users to understand and navigate. It can also be a source of infighting about what Bitcoin should be. This would harm Bitcoin’s stability and network effect, possibly resulting in a network split.
The added complexity of sidechains could also make them vulnerable to the many hacks and thefts associated with DeFi on other blockchains today. Last year, hackers stole over $3 billion via multiple DeFi exploits.
Sidechains will likely be far more centralized than Bitcoin’s main chain regarding security, node count, and the developer ecosystem. If a sidechain becomes popular, it increases the risk for its users when its central authority starts acting against their interests.