The sidechain solution promotes the diversification of Bitcoin developers. Is it a better solution for Bitcoin expansion?

Thinking about sidechains may be changing.

While sidechains have historically been viewed as a way to experiment and improve the operability of the bitcoin network, today’s conversation is looking at the technology as a possible solution to bitcoin’s long-standing scaling debate.

The idea behind sidechains is to allow many coins with different regulations to be tied to Bitcoin. For example, one sidechain might have the advanced privacy of Mimblewimble, while another might allow for larger (or smaller) block sizes.

The latter is fueling interest in using sidechains as a way to circumvent bitcoin’s contentious block size debate, an idea that, according to some, could theoretically please everyone.

However, Bloq economist Paul Sztorc stressed that this does not mean that sidechains can achieve higher transaction throughput. Sztorc invented a sidechain called Drivechain. Through this model, participants can choose to transfer their bitcoins to a sidechain with a larger block size (such as 2MB) while still retaining a part of the Bitcoin network.

Sidechains or extension blocks?

However, a plethora of other block size solutions have been proposed recently, with which sidechains now have to compete.

For example, extended blocks were recently revived by bitcoin startup Purse, which also aims to allow users to choose block size.

However, some developers, including Blockstream CEO Adam Back, one of the original initiators of extension blocks, believe that extension blocks will reduce security for users.

That’s why Sztorc’s drivechain proposal — where what happens on one sidechain doesn’t negatively impact another — appears to be gaining support from some developers who oppose other recent scaling solutions.

Sztorc proposed the solution to the bitcoin developer list and sought feedback during the Consensus 2017 conference.

However, some developers believe that it is not a matter of one solution versus another, but rather which technology is better for the application.

Bitcoin developer James Hilliard said:

“I can see some potential use cases for extension blocks, such as adding support for Mimblewimble to Bitcoin. However, I think sidechains are better in terms of security isolation.”

However, some believe that drivechains (other sidechain variants that rely on miners) may not work most efficiently in the current environment, where computing power is concentrated in the hands of a few.

For other developers, it depends on the specifics.

Bitcoin Core contributor Luke Dashjr said:

“Generally speaking, a drive chain sounds like a good idea; however, the details are very important.

What about “SegWit2x”?

Let’s go back to the issue of capacity expansion.

Of particular note, Sztorc described DriveChain as a better solution than the recently launched “SegWit2x” by Digital Currency Group (DCG).

The SegWit2x proposal aims to steer the industry toward increased transaction capacity and has already gained support from bitcoin businesses and miners. SegWit2x combines two technical upgrades: an optimization of SegWit, which has been held back by a lack of miner support, and an increase in the block size parameter.

However, Sztorc, like some other developers, has expressed skepticism about SegWit2x.

He told CoinDesk:

“I’m a little concerned about the New York Agreement. In short, I think that proposal is too expensive. It’s unlikely to work. Even if it does work, we’ll only get to 2MB blocksize, which isn’t a huge improvement. I’m confused that people think that’s progress. It’s a small step forward for a big cause.

Indeed, he believes drivechains are superior for a number of reasons, primarily because sidechains “avoid coercion.”

SegWit2x requires a hard fork on the Bitcoin network to increase the block size to 2MB. However, not everyone is on board with the hard fork, in part because it means an increase in the amount of data each user needs to store. This hard fork change may cause the network to split.

At the same time, sidechains do not require a hard fork to be implemented. Sztorc believes that users will be able to rotate to a sidechain with a block size that suits their needs, whether it is 8MB or 50MB, while some people think that 2MB is too small.

Choices, Choices

Additionally, some in the bitcoin community believe that the team of volunteer developers surrounding the Bitcoin Core implementation has become a monopoly, arguing that the group has been resistant to outside ideas.

According to Sztorc, drivechains will eliminate both of these unnecessary problems because users will be able to truly choose what they want, and different teams of Bitcoin developers can form different sidechains, thus promoting developer diversity .

Sztorc believes that Drivechains could also be deployed within the six-month timeframe recently proposed by DCG, requiring only a soft fork of Bitcoin (a backwards-compatible way of changing Bitcoin’s consensus rules) to implement.

The upgrade process has become more political recently with the SegWit proposal, but Sztorc doesn’t think soft forks are a problem for Drivechain because it gives “everyone what they want.”

However, as with most other Bitcoin code improvement proposals, the community will have to wait and see.