RootStock – Smart Contracts for Bitcoin

http://www.rsk.co/

Github location: https://github.com/RSKSmart

This blog post is different than others. Rootstock or RSK is not a decentralized app. Rootstock is still work in progress. Its a complete new paradigm improving the Bitcoin platform. Currently Bitcoin platform is extremely slow in transaction processing (7 transactions per second) and Bitcoin does not allow conditional flows.

Rootstock is trying to solve that problem without hard fork of the Bitcoin network. With rootstock users will be able to run their smart contracts in a platform that can scale up to 2.000 tx/sec on chain and 20.000 tx/sec off chain, providing the scalability needed for global financial solutions. Rootstock is inspired by the rise of Ethereum and wants to bring similar smart contract technology to Bitcoin. Rootstock (RSK), a smart-contract platform that incorporates a Turing Complete Virtual Machine to Bitcoin.

Bitcoin currently is not a turing complete programming platform. Bitcoin has a single purpose of transaction based model of bitcoin management. Developers cannot add additional logic to Bitcoin network. For example , a developer cannot add a conditional transfer of Bitcoin to a receiver. This can be done through smart contracts. But, to incorporate this with Bitcoin network, it would require hard fork or direct change to bitcoin core code. This kind of hard forks are definitely risky and not desired as we have seen recently. Also, hard fork requires majority miner consensus which is extremely hard to setup.

Thats where Rootstock comes into picture. Rootstock is not directly tied to Bitcoin network, but is a side chain. RSK will implement this through merge-mining plugin. Currently 50% of miners are already integrated with RSK’s merge mining plugin.

Rootstock works as a Side Chain for Bitcoin. And when Bitcoins get transferred to RSK, it converts to RootCoins or RTC which is Bitcoin equivalent.They can be transferred back to Bitcoins at any time at no additional cost (except for standard Rootstock transaction fees).

Important difference here with use of RTC or Rootcoins is that,  RTC is the base currency used on the RSK sidechain to pay miners for transaction and contract processing. There is no currency issuance: all RTC are created from Bitcoins coming from the Bitcoin blockchain. Again RTC is not an Altcoin, its a sidechain internal 2 way pegged coin. 2 way pegged means, when two currencies can be exchanged freely, automatically, and without incurring in a price negotiation

Merge mining will help Bitcoin miners make additional income.By increasing the profitability of Bitcoin mining with Rootstock merged mining, the Bitcoin network may prevent the hash rate to plummet.

Merge mining means miners can mine both coins with zero marginal cost, miners will still be able to mine Bitcoin as long as the additional income provided by Rootstock mining compensates the profitability gap.

coutsey: http://www.truthcoin.info/blog/drivechain/

coutsey: Rootstock white-paper is located here.

The Good:

  • Rootstock has capability to revolutionize bitcoin by adding capability of smart contracts.
  • Rootstock plans to be backward compatible with ethereum smart contracts, this will taper towards leveraging Ethereum developer community.
  • Rootstock can significantly speed up Bitcoin transaction speed from 7 transactions per seconds to 2000 transactions per second through lumino transaction protocol.
  • It also provides other enhancement to the network such as faster transactions and better scalability, features that we also believe will enable new usage scenarios.
  • Rootstock will help miners keep their old obsolete hardwares worth millions of dollars stay relevant for atleast 4 more years.
  • Important initiative considering long term scaling of transactions per second for Bitcoin.

The Bad:

  • Rootstock is way behind Ethereum and Ethereum developer community.
  • There are existing solutions using Ethereum or other smart contract platforms to integrate with Bitcoin eco-system.
  • Higher transaction fees due to additional cost for maintaining RTC.
  • Withdrawals might be slow to make sure there are no fraudulent activity by miners.
  • While your BTC are on the side chain, a >51% coalition of Miners can steal your money.
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