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In this episode of “The Van Wirdum Sjorsnado” hosts Aaron van Wirdum and Sjors Provoost will be joined again by Ruben Somsen. The trio discussed Drivechain, a sidechain project led by Paul Sztorc.
Sidechains are alternative blockchains on which coins are linked to bitcoin. This should make the sidechain coins interchangeable with bitcoin and thus have an equal value. In a sense, sidechains let users “move” bitcoin across blockchains, where they are subject to different protocol rules, allowing for greater transaction capacity, more privacy, and other benefits.
Van Wirdum, Provoost and Somsen explained that Drivechain consists of two main innovations. The first is blind-merged mining, which allows bitcoin miners to secure Drivechain using their existing hash power, but without necessarily having to validate everything that happens on the sidechain. The second is hash rate escrows, which allow miners to ‘move’ coins from the Bitcoin blockchain to the sidechain and back again.
The hosts also discussed some of the benefits and complications with Drivechain, especially the security implications of letting miners control the pegging-out process. They pondered the arguments for why this process is incentive compatible (in other words, safe) – or why it might not be.