Adam Back, an early cryptocurrency developer and cryptographer, gave a speech on the bitcoin sidechain during a public event. He believes that the side chain may make many competitive coins appear redundant.
Five years ago today, a white paper on the bitcoin sidechain was released. Back 1997, before the birth of Bitcoin, Back had invented HashCash , which played an important role in cryptography innovation and Bitcoin Core development. His company, Blockstream, funded the development of the mainstream Bitcoin web client.
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Bitcoin sidechain papers point out that users can transfer their bitcoin between multiple completely different blockchains, which is equivalent to realizing many new features of the coin.
New features and features can be built into Bitcoin through sidechains. In theory, this will make many of today's competitive coins redundant. According to Forbes, the current sidechain technology needs to be weighed in terms of centralization and anti-censorship.
Back is optimistic about the future of Bitcoin may have such a function. He obviously does not like the status quo of the competition.
“In the history of competing coins, there was a lot of competition for a period of time that didn’t have any function and it disappeared. Then people started to need a new marketing method, so they added functionality. Some are real features, some are just push The story to the market."
Back adds that the modular Bitcoin Core allows developers to simply build products and services on top of this, rather than creating a whole new blockchain and token.
"This 'economic incentive' will continue to exist, but the credibility will be reduced, because if you have a very easy to use bitcoin extension mechanism, and some examples that can be easily extended on this basis, then you are elsewhere The reasons for development are not so good."
Taking the Internet as an example, he said that if there are hundreds of forked versions of the underlying protocol (ie TCP/IP), the development of the Internet will be equally confusing. He added that layer 2 protocols, such as lightning networks, may also make other payment processors seem pointless.
There are currently many sidechains, such as Blockstream's Liquid, but they are not completely trusted. Back also acknowledged this and added:
"The risk of using Bitcoin is that Bitcoin will eventually be hosted in some way – with varying degrees of decentralization."
The current situation is that the competition currency does bring something different, and the de-trust of the bitcoin side chain still takes several years.
Ripple's XRP is a centralized enterprise-level cross-border banking platform, while Ethereum offers a smart contract computer and a decentralized financial platform – both of which are completely different from Bitcoin. Even with the bitcoin sidechain, other cryptocurrencies are unlikely to disappear completely. But they need to evolve at the same speed or faster to survive.