RSK Labs is developing the first smart contracts platform secured by Bitcoin, codenamed RootStock. Today, 24 of the most influential Bitcoin companies have expressed their support by participating in an innovative hybrid security model, which incorporates a private Federation.
The Federation will provide services that are “indispensable to use Smart Contracts in practical scenarios,” according to the startup. These include oracle services, external security checkpoints, and acting as notaries in a much anticipated two-way peg that will finally allow Bitcoin to use sidechains.
“This hybrid security model will be key to promote institutional use cases. We have more than 20 international banks, insurance companies, governments and development agencies that are planning to launch their services over RSK”
– Diego Gutierrez Zaldivar, CEO, RSK Labs
Although RSK Labs hopes more will join in an ongoing basis, the starting line-up of companies in the RSK Federation includes: Bitcointoyou, Bitex, Bitfinex, bitFlyer, Bitgo, Bitoasis, Bitpay, Bitso, Bits of Gold, Bitstamp, Blockchain, Blockchain Intelligence Group, Blocktrail, BTCC, BitKan, JAXX, SurBTC, CoinBR, Huobi, OKCoin, Paycase, Tether, Unocoin, and Xapo. Each new member of the Federation helps decentralize and add security to the entire network.
Today’s announcement was part of a roadmappublished in March, when RSK raised $1M to further develop the project.
During the third quarter, RSK will continue to add Federation members, add new use cases for the RSK platform, and additional hashing power to the RSK merge-mining network.
The release of their next beta version is almost upon us now. A full launch of the production network, dubbed Ginger, is slated for Q1 2017.
“Leading Bitcoin companies will integrate a Federation that will play the fundamental role of securing the transfer of funds between the Bitcoin and Rootstock blockchains,” the Rootstock Whitepaper from December 2015 reads. “In exchange for that they will profit from the fees generated by the settlement between the inflow and outflow of funds.”
This transfer to and from the Bitcoin blockchain to a Secondary blockchain, or sidechain, relies on a 2-way peg (2WP). RSK settled on a “Multi-sig Federation” 2WP that allows bitcoin miners to mine both chains at once without loss in efficiency, known as a merge-mining.
“A better way to implement a 2WP is having a group of notaries control of a multi-signature,” RSK explained, “where the majority of them has to approve the unlock of funds.”
This design works better than having a centralized controller of the funds, for various reasons, but still has some degree of centralization due to the relatively small number of Federation members. “To achieve true decentralization,” RSK continues, “the notaries should be carefully selected so they are located in different jurisdictions, different geographies, and each having good reputation and good security. Also they must not be too few, nor too many.”
As a scaling solution for bitcoin, these Federated sidechains should offer a large but untested amount of transaction scalability.
“RSK can scale far beyond Bitcoin in its current state. RSK scales to 100 transactions per second (same level as Paypal) without sacrificing decentralization and reducing storage and bandwidth usage using probabilistic verification and fraud proofs, as well as blockchain sharding techniques.”
The Rootstock development team have said on several occasions that the platform is compatible with Ethereum, and were quick to offer support to the recently divided blockchain, “We decided to make our virtual machine (RVM) completely compatible with Ethereum’s VM. We admire all the people and their effort devoted to developing this standard.”
“The recent episode with The DAO has exposed how important is to adopt the most rigorous security measures within the smart contract industry in order to promote real use cases,” said RSK in their announcement. “These measures, along with the power of the Bitcoin network, will enable RSK to transform our society through the development of direct democracies, digital identity, financial inclusion and the Internet of things.”
Meanwhile, RSK has been designed to offer all of the benefits of a Turing-complete smart contract platform on a blockchain, much like Ethereum. Instead of requiring an additional cryptocurrency as a ‘gas’ to make it work and charge fees through, RSK runs purely on bitcoin, creating an economic benefit for its users from the start.
“We are very excited about what RSK is doing by bringing Ethereum-like capabilities to the Bitcoin network. This will take the Bitcoin ecosystem to the next level and unveil the endless possibilities of the Blockchain technology”
[Source:- Brave New coin]