A recent debate among Bitcoiners has resurfaced regarding a six-year-old Bitcoin Improvement Proposal (BIP) that suggests adding “sidechains” to the Bitcoin network. Some individuals have expressed concerns that this proposal could increase the number of scams on the network, while others believe it could attract new users to the cryptocurrency.
The BIP in question, BIP-300, was first introduced in 2017 by Paul Sztorc, the founder of Drivechain development firm LayerTwo Labs. The proposal suggests implementing “sidechains,” which are separate blockchains built on top of the Bitcoin network. This would allow Bitcoin to be transferred onto these sidechains and create altcoins. Sztorc claims that Drivechains would give users the ability to choose a blockchain security model that aligns with their preferences and determine how they want their Bitcoin to function.
The debate over BIP-300 was reignited on August 22 when Luke Dashjr, a Bitcoin core developer, rewrote the proposal’s code and requested to add it to Bitcoin’s codebase. Implementing BIP-300 would require a soft fork of the Bitcoin network activated by miners. A soft fork is a type of network upgrade that introduces new features without disrupting the existing blockchain.
However, on September 10, Maxim Orlovsky, CEO of the Pandora blockchain scaling solutions project, claimed that he had found a way to create a two-way peg on Bitcoin without the need for a soft fork. A two-way peg refers to a mechanism that allows the transfer of assets between two different blockchains. Orlovsky proposed an alternative to BIP-300, which involves an oracle validating a sidechain. He stated that the protocol would reach a consensus on the correctness of the state reported by the oracle. Further details regarding this alternative proposal are yet to be disclosed.
Supporters of BIP-300, including Sztorc, argue that Drivechains will provide significant benefits with minimal risks. They believe it will offer users more flexibility and increase the adoption of Bitcoin. On the other hand, opponents, such as Cory Klippsten, the CEO of Swan Bitcoin, express concerns that Drivechains could lead to an increase in scams on the Bitcoin network, which might draw the attention of regulators. Pierre Rochard, VP of research at Bitcoin miner Riot Platforms, criticizes the proposal, claiming that it relies on speculative economic arguments rather than substantive engineering.
Other figures in the industry have shown their support for BIP-300. Educator Dan Held believes that Bitcoin could benefit from the inclusion of more speculative assets as they could introduce new audiences to the cryptocurrency. Jameson Lopp, co-founder of Bitcoin wallet provider Casa, stated that he has not encountered any convincing concerns about the potential dangers of sidechains to the main Bitcoin blockchain. He even suggested that if a sidechain becomes more valuable, it could indicate that the base chain should adopt the sidechain’s features.
In conclusion, the ongoing debate surrounding BIP-300 and the implementation of sidechains on the Bitcoin network highlights the divergent opinions within the cryptocurrency community. While some view it as a promising development that will expand the utility and adoption of Bitcoin, others express concerns about potential risks and regulatory implications. The search for alternative solutions, such as Orlovsky’s proposition, indicates the industry’s commitment to exploring innovative approaches that balance flexibility and security within the Bitcoin ecosystem.