Babbitt Watch | Soul Torture: Is the cross-chain BTC still a "real" BTC?
In 2019, it was considered to be the first year of cross-chain. Cosmos and IRISnet, which attracted much attention, launched the main network in March. After the cross-chain agreement IBC was launched in November, it is expected to achieve interconnection. Polkdadot will also launch the main network in the fourth quarter of this year. Have you ever thought about a problem when the cross-chain ecology arrives:
Is the cross-chain BTC still a "real" BTC?
This question was put forward by Pan Chao, the founder of MakerDAO, in the live broadcast of the BaKbit SheKnows community. I thought it was very interesting, so I interviewed many people in the industry. Everyone's answer is generally divided into two perspectives of "economy" and "technology". We look at it separately.
Economic perspective 1: Calculated as a liability
After the cross-chain BTC "is a liability", F2pool & cobo wallet founder Shen Yu said that this is also the general consensus. Liu Yi, the founder of Cdot, has similar views. He believes that from the perspective of assets, the BTC after the cross-chain is a BTC acceptance bill, so there is a certain risk of redemption.
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Economic Perspective 2: US Dollars under the Gold Standard
Wang Xiaotong, co-founder of Wing Taiyuan Technology, believes that BTC after cross-chain is not a “homogeneous” BTC, but can be regarded as an asset with BTC endorsement. The validity of endorsement depends on the cross-chain approach and assumptions. He explained it with the "dollar under the gold standard."
This is similar to the dollar under the gold standard, but the Bretton Woods system relies on a centralized endorsement to support the “transnational” dollar or French currency, which looks strong and fragile. If the two chains themselves and the cross-chain can be decentralized, the endorsement is much more powerful.
Under the gold standard, each dollar issue requires a corresponding gold lock, but it was later discovered that the user slowly converted to trust the dollar itself. Another example is the USDT. Vulnerability is because relying on a single organization can change the rules. True cross-chaining may rely on technical guarantees to endorse (lock assets) security and limit distribution.
Economic Perspective 3: Only reflects the purchasing power of the chain
Ye Wei, head of the Asia-Pacific market at Wanchain, believes that the BTC after the cross-chain is like the ability of the renminbi to purchase goods after the dollar has been converted into renminbi. The intuitive feeling of people is that the cross-chain BTC and BTC have the same purchasing power. However, once the chain in which the cross-chain BTC is located collapses and the cross-chain BTC cannot be redeemed or exchanged back to the BTC, the value of the cross-chain BTC will also collapse.
When the old American came to China, he exchanged the US dollar for the same amount of RMB. Is the RMB in his hand still the US dollar? No, but his renminbi and the previous dollar are still currencies, with common attributes, and can be exchanged for goods and services. He wants to return to China, and he can exchange the RMB for the US dollar. BTC is similar to BTC after cross-chaining.
The exchange relationship between the US dollar and the renminbi is the result of many factors such as the purchasing power of the two currencies and is floating. The US dollar is exchanged for RMB, and its value is only reflected in the ability to purchase goods in RMB. Only after returning to the US dollar can the currency purchasing ability under the US dollar ecology be re-emphasized.
Similarly, from BTC to cross-chain BTC, it can be understood that the exchange rate is fixed, according to 1:1. Cross-chain BTC, its value is also only reflected in the purchasing power of the ecosystem in which it is located, but because the exchange rate is fixed 1:1, and cross-chain BTC can easily cross back to BTC, people's intuitive feeling is Cross-chain BTC and BTC have the same purchasing power. However, once the chain in which the cross-chain BTC is located collapses, the cross-chain BTC cannot be redeemed or exchanged back to the BTC, then the value of the cross-chain BTC will also collapse.
Technical perspective: depending on the reliability of the cross-chain gateway
According to Zhao Dong, the founder of RenrenBit, there is currently no perfect cross-chain solution, mostly gateway. For example, if you put BTC in my place, I will send a "Zhaodong BTC" to circulate in the chain.
"From a technical point of view, the cross-chain BTC is a local token representing the BTC, with full programmability. The cross-chain is to lock btc, generate vouchers of BTC on the target chain, and voucher is local pass on the target chain. It can be managed with smart contracts," said Liu Yi, founder of Cdot.
“The chain of BTC has the highest level of security and decentralization. Why does “BTC” across other chains have the same value?” The letter COO Xiong Yue questioned.
Compared with the original chain chief technology officer, the company agrees that the cross-chain btc and btc are different because the network capacity of the bearer is different. But he believes that it cannot be simply equal to “liabilities”, and the cross-chain BTC loses some of its computing power, but it is scalable and flexible.
Wan Xu founder Lu Xujun also believes that cross-chain BTC is the mapping or proxy token, as long as it is centralized or decentralized to ensure that its mapping relationship is one-to-one, there will be no risk of being attacked, use it with Really the same.
"Depends on the reliability of the cross-chain gateway" Babbitt & Longer than the original chain founder.
This leads to another topic: how to design cross-chain agreements scientifically and reasonably, and to maximize risk avoidance?
The blockchain records value, and cross-chain is also value. If the single blockchain solves the problem of how to accurately book accounts in a distributed situation, then cross-chaining is to solve the problem of how to accurately book accounts when two distributed books are transferred.
The originator of the cross-chain concept is undoubtedly the founder of Sidechain – the Blockstream team. In his paper, he proposed a two-way anchoring method for the problems involved in cross-chaining.
The relay/sidechain mode is more reflected in BTC-realy, which is equivalent to establishing a smart contract in Ethereum. If the BTC is transferred, the verification of the smart contract will automatically fulfill the equity in Ethereum and conduct the transfer transaction. .
The hash lock mode is currently widely used in lightning networks to generate a random number and a hash value on the A chain, and send the hash value to the B chain. After the B chain verifies the hash value, the asset can be accepted or transferred. The assets of the A chain. However, the hash-locked mode relies mainly on timestamps, and the support for smart contracts is weak.
Polkadot has a more ambitious vision than any cross-chain approach, and his proposed mechanism is not only to solve cross-chain problems, but also to create a heterogeneous, scalable architecture. Cosmos is similar to Polkadot in some concepts, and hopes to create a heterogeneous system to solve cross-chain problems. It also introduces the concept of Hub and Zone.
Wanchain cross-chain documents: All cross-chain agreements can't solve two problems: one is how to verify the transaction status on the original chain in a distributed way; the other is to ensure the total token on the original chain. The amount will not decrease or increase due to cross-chaining.
The recently released white paper in the original "MOV: Next-Generation Decentralized Cross-Chain Layer 2 Value Exchange Agreement" pointed out that a complete open gateway-based cross-chain protocol generally needs to meet the following four design elements:
(1) Decentralized governance of the gateway, that is, cross-chain and asset-trusted de-trust; (2) Verification of cross-chain event authenticity, verifying the existence and confirmation of cross-chain transactions by maintaining the light-node synchronization block header mechanism; 3) Unify the data format of the cross-chain protocol to ensure the atomicity and security of the entire cross-link; (4) Proof of cross-chain message validity, prevent extreme evils through the supervision mechanism such as patrol officers.
Longer than the original founder of the original chain said: "Hash time lock is atomic exchange, but not flexible, cross-chain gateway based on side chain relay is the mainstream. And than the original chain is OFMF, multi-signal + threshold, very clever solution ""
Looking at the solution ideas of many cross-chain projects, this article does not intend to delve into the technical details, just want to bring you this kind of thinking: Is the cross-chain BTC still a "real" BTC? With the improvement of the cross-chain ecology, the transfer of assets through a cross-chain approach will be realized soon. We need to focus on the reliability of cross-chain gateways because it determines the value of cross-chain assets.
During the interview and discussion, more questions were raised. For example: Is BTC in the lightning network a real BTC? Is the BTC in the exchange a real BTC? Please write down your thoughts in the message.
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