Comprehensively sort out the operation mechanism, advantages and development potential of Drivechain

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特邀专栏作者

2021-07-12 11:05 (UTC+8)

This article is about 4216 words, reading the full article takes about 7 minutes

This article introduces the fundamentals (simple) and incentives (complex) of "hashrate escrow".

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This article introduces the fundamentals (simple) and incentives (complex) of "hashrate escrow".

Before understanding Drivechain, we must first change the mindset that most Bitcoin users are accustomed to. The key to understanding Drivechain is not "trust-free" or "mathematical certainty", but game theory and incentives. (The same is true of Bitcoin in general, but people tend to ignore this and indulge in the trustless assumptions that mathematics brings.)

This article will introduce the basic principles (simple) and incentives (complex) of "hashrate escrow", and how it achieves two-way anchoring between the main chain (Bitcoin) and multiple side chains.

How does escrow work from a Bitcoin perspective?

We need to create a new address type. All tokens entering this type of address will be locked, and only when all miners reach a consensus on the withdrawal transaction (WT^) within 6 months, can the tokens on this address be used. Each sidechain has such an address on the Bitcoin blockchain.

The above process means that users can transfer tokens from the main chain to the side chain by depositing them into a special address, and then withdraw the tokens on the side chain through a special withdrawal transaction.

When a transaction scores high enough, the transaction is published on-chain, transferring assets from the sidechain to the user who initiated the withdrawal transaction.

WT^ whose scores failed to meet the threshold within 6 months were discarded.

What is the point of the above process?

Special transactions can freeze the tokens on the side chain in some way, and then all withdrawal requests will be aggregated into a main chain WT^ and submitted to the main chain miners so that the main chain miners can vote. After a few months, the voted WT^ will be released to the chain.

resolve conflicts and internal disagreements

What? Waiting 6 months to get my money back?

Yes and no. In fact, users who want to get their tokens back can use atomic swap, submarine swap, or other similar services to transfer tokens in both directions between the sidechain and the mainchain. The cost of the longer withdrawal delay period will be borne by the few liquidity providers who want to profit from it.

Why bother?

Drivechain can solve many different problems:

Catalyze experiments and new use cases on Bitcoin

Issuing assets, fully private transactions, stateful blockchain contracts, Turing completeness, decentralized games, some DeFi ideas, prediction markets, Futarchy, decentralized and meaningful human-readable domain names, contains a lot of common transactions Megablocks, a blockchain optimized for the Lightning Network, and more...

These ideas may have great value, but no one has ever really tried them because they cannot be implemented or interacted with by real bitcoins. These ideas can only fall back to the next best thing, either relying on junk coins, or seeking custody solutions such as Liquid or RSK. Perhaps it is for this reason that they failed to form a network effect.

resolve conflicts and internal disagreements

Solve the expansion problem

Sidechain solutions based on Drivechain can eliminate the differences between people and make everyone happy. At the same time, even if they are reluctant, people will use the same currency and contribute to each other's ecology. Plus, people are free to switch camps, reducing cognitive dissonance.

Solve the expansion problem

Maintain Bitcoin's decentralization

Solving Blockchain’s Security Budget Problem

The security budget is simple to calculate: first think about what you think a reasonable security budget for each block would be without the block subsidy, and then divide it by the number of bytes a block can hold to calculate the number of bytes per block. What is the price of a byte in satoshi. If estimates are reasonable, each Bitcoin transaction requires users to pay a large number of satoshi, such a high cost not only makes it unsuitable for daily transactions, but also makes it impractical to open and close Lightning channels.

So without a solution like Drivechain, you're left with only one option: have a trusted service provider like Liquid and RSK, or a custodial Lightning wallet spend Bitcoin on your behalf. However, with Drivechain, it is possible for thousands of transactions to occur on the sidechain, all packaged into a sidechain block, and then paid a high fee (via blind merge mining) to publish to the mainchain. The security of Bitcoin is guaranteed.

Maintain Bitcoin's decentralization

Collusion costs - assuming that miners are ordinary salesmen, they just want to do their own work and get paid, but stealing requires cooperation with other miners. It's easy to break up.

Can miners steal?

Can. If a group of miners conspire to control the majority of computing power and maintain it for 6 months, they can issue a WT^ to take all the money on the sidechain and transfer it to their own account.

Do miners steal?

No, because it's not worth it.

While it may appear at first glance that a miner can make a ton of money stealing for free, there are many costs involved:

Stopping the revenue loss from blind merge-mining — the theft would destroy the sidechain, so all the transaction fees miners were expected to earn for years to come are gone.
The cost of being an enemy of community justice — Once involved in stealing, miners will be strongly resisted by the community, which cannot be ignored. If the malicious miners are publicly identified entities, they may be subject to personal injury, death threats, or sanctions from the national judicial system.
Collusion costs - assuming that miners are ordinary salesmen, they just want to do their own work and get paid, but stealing requires cooperation with other miners. It's easy to break up.
Another effect of being an enemy of community justice is that if miners try to steal for their own self-interest, even if they fail in the end, it will deepen the community’s concerns about the miners’ excessive power in the Bitcoin ecosystem, which may eventually lead to the community agreeing to pass Hard forks to change the mining algorithm, or introduce more entities into the mining process (e.g., develop new ASIC miners), which have the potential to reduce profits for current miners.
The cost of falling bitcoin prices - Once the theft is successful, it means that Drivechain is unsafe, the usability of bitcoin will decrease, and the reputation of miners will also be damaged, which may lead to a decline in bitcoin prices, affecting the business and operation of miners income.
Another effect of being an enemy of community justice is that if miners try to steal for their own self-interest, even if they fail in the end, it will deepen the community’s concerns about the miners’ excessive power in the Bitcoin ecosystem, which may eventually lead to the community agreeing to pass Hard forks to change the mining algorithm, or introduce more entities into the mining process (e.g., develop new ASIC miners), which have the potential to reduce profits for current miners.

What should we do if miners steal?

The above considerations only make sense if miners steal good sidechains. If a sidechain is inherently problematic, such as deceiving users, not being used, or full of loopholes, miners can destroy it, and people will only applaud.

What should we do if miners steal?

Because such a thing does not exist.

This suggestion makes people mistakenly think that Drivechain, a side chain solution, relies on users to activate soft forks to ensure security, but this is not the case. While soft forks are possible, Drivechain absolutely cannot and will not rely on soft forks because the coordination costs are too high and no one would want them to happen.

If miners ignore these counter-incentives (mentioned above) and insist on stealing from a good sidechain. This shows that the Drivechain experiment has failed, and it probably means that the Bitcoin experiment has also failed, because it proves that miners can ignore economic and social pressure for a long time to do evil together, and it is very likely that they are targeting Bitcoin. State or other power support. Therefore, Bitcoin transactions on the main chain are no longer safe.

Why choose Drivechain over other mature trustless sidechain technologies?

Because such a thing does not exist.

This is impossible unless Bitcoin verifies all transactions on the sidechain, which is tantamount to greatly increasing the block size limit and extending Bitcoin's rules, which is really not a good idea.

No, I mean a trustless two-way peg, where the Bitcoin protocol verifies that withdrawals are correct!

What if I still don't like Drivechain after reading this article?

Yes, this is also a way. Conceptually, Drivechain computing power hosting is not only simpler, but also more incentivized, less garbage on the chain, and more secure.

Isn’t computing power escrow a kind of complicated soft fork?

Yes, but it's much easier than SegWit. Unlike SegWit, Drivechain hashrate escrow doesn't force users to accept anything, i.e. it doesn't enforce a block size cap increase.

Why do we expect miners to actively participate in the voting mechanism?

Because it is in the interests of the miners themselves, and the cost is very low. Today, more than half of the miners are mining RSK. Unlike blind merge mining, this is a very complex process that requires miners to run RSK full nodes. For a Drivechain sidechain, an SPV node is enough, or getting data directly from the block explorer API is much simpler.