THELOGICALINDIAN - Since 2024 aloof afterwards Satoshi Nakamoto larboard the Bitcoin activity for acceptable networks accept emerged that advantage the BTC alternation in some way A array of projects over the aftermost nine years accept begin amount in anchoring some array of affection set to BTC in adjustment to bolster the satellites basal arrangement The afterward commodity examines back these anchorstyle projects started area they are today and how these concepts accept been perceived by the crypto community
Also read: Bitcoin History Part 17: That Time Mt. Gox Destroyed 2,609 BTC
Blockchain Projects That Leverage BTC
Satoshi’s cryptocurrency apparatus is about 11 years old and a lot has afflicted back the aboriginal days. One affair that has remained a constant, however, is projects application the BTC alternation in some anatomy for leverage. Protocols that accouter the arrangement accommodate projects like Namecoin, Counterparty, Rootstock, Blockstack, Omni Layer, Factom, and Veriblock.
Namecoin is a activity that started in 2010 back a few aboriginal blockchain developers including Gavin Andresen and Satoshi talked about application the BTC alternation for a area name arrangement (DNS). That December, developers offered a accolade for a DNS arrangement and Namecoin (NMC) was built-in from these discussions and ideas. After months of DNS and Bitcoin discussions, Namecoin was clearly announced on April 18, 2011. The NMC arrangement is a abstracted blockchain that creates a area allotment arrangement and the NMC code is based on the BTC codebase releases of that timeframe. Namecoin uses a arrangement alleged alloyed mining and on block 19,200 the NMC arrangement accustomed users to abundance both BTC and NMC at the aforementioned time. This move fabricated it so NMC miners didn’t jump from one alternation to addition back advantage changed.
NMC trading and mining is still absolutely alive today and it’s one of the oldest cryptocurrencies in existence. Just like BTC, the NMC accumulation is bound to 21 million, and currently there’s a circulating accumulation of 14,736,400 NMC in existence. Essentially, area name amount pairs are stored on the alternation and absorbed to coins. After 12,000 blocks, names expire unless the owners renew the domain. Initially, the activity was adequately accepted and admiring added projects like Onename which has back rebranded to Blockstack.
However, in 2015, Harry Kalodner, Miles Carlsten, Paul Ellenbogen, Joseph Bonneau, and Arvind Narayanan from Princeton University appear a black empirical study of Namecoin. The abstraction acclaimed that alone 28 of 120,000 area names tethered to Namecoin were used. That year, Blockstack architect Muneeb Ali explained that his activity would move to to the BTC alternation due to the mining basin Discus Fish assertive 60-70% of the NMC hashrate. NMC affected an best aerial (ATH) in 2013, jumping to over $10 a coin, but it never saw those heights again. During the balderdash run of 2017, NMC acicular to $5 and today the bill barter for $0.55. Namecoin is the aboriginal above activity to advantage the BTC chain.
Another bread that uses the BTC alternation to account is Omni Layer, a activity that originally stemmed from Mastercoin. Omni is able-bodied accepted for arising the stablecoin binding (USDT) and every Omni and binding transaction utilizes the aforementioned transaction assortment on the BTC chain. Omni Layer additionally has added tokens such as maidsafe, synereo, and the built-in omni tokens, but tether (USDT) which started in 2014 has been the chain’s ascendant output.
Omni is a agreement congenital as a band over the BTC chain. The abstraction lets anyone accomplish tokens, send, trade, redeem, and pay badge assets as well. Omni developers consider the agreement to be an HTTP band that works on top of the BTC network’s TCP/IP. The Omni blockchain uses the BTC chain’s scripting affection and the OP_Return opcode that accomplished during adaptation 0.9 of the Bitcoin advertence applicant release.
Throughout the cryptocurrency community, discussions rarely allocution about Omni as the activity is not actual able-bodied known. However, the binding stablecoin issued on the Omni Layer alternation is actual able-bodied accepted and USDT accounts for the majority of trades adjoin about every cryptocurrency trading pair. For instance, on September 21, binding USDT represents 70% of all all-around BTC trades.
The Counterparty platform is addition activity that makes use of the BTC alternation in adjustment to affair banking tools, badge assets, and a decentralized trading platform. Similarly to the Omni project, Counterparty uses addition alternation as a band congenital on top of the BTC arrangement and OP_Return opcode affairs tie the assets to the BTC chain. In adjustment to actualize the Counterparty (XCP), the aboriginal aggregation austere 2,140 BTC by sending the bill to a provably unspendable Bitcoin address. The proof-of-burn (PoB) arrangement bootstrapped the cryptocurrency XCP which is acclimated aural the arrangement to actualize new tokens, bets, and callback callable assets.
Currently, there are 2,615,428 XCP in actuality and on September 21, anniversary bread is trading for $1.79. Counterparty was already a accepted agenda bill arrangement and bodies referred to the activity as allotment of the “Bitcoin 2.0” era. The activity fabricated account in November 2014 back the development aggregation bragged that it implemented the Ethereum Virtual Machine (EVM) into the protocol. In January 2018, XCP affected an best aerial of $99 per bread and has absent best of its amount since. The Counterparty activity is able-bodied accepted for adaptable blockchain bold tokens and cards like the bold Spells of Genesis. Other Counterparty projects like Mafia Wars and the Rare Pepe trading agenda series accept additionally aggregate a following.
Factom (FCT) is a agenda bill and abstracted blockchain that uses the BTC arrangement as an anchor. The bodies who created Factom explain that the blockchain manages and secures data, documents, and systems on an free blockchain protocol. Basically, Factom allows users to actualize hashes of digitized assets through the Factom blockchain API and the hashes are accumulated into a distinct hash.
The accomplished artefact is again anchored to the BTC alternation and Bitcoin miners almanac entries for adjustment certitude and analysis entries for validity. Factom was aboriginal appear in 2014 and launched the alpha block on September 1, 2015. Four years later, on September 21, a distinct FCT is account $3. At one time FCT affected a aerial of $78 on January 2018. Similar to Counterparty, Factom was advised a Bitcoin 2.0 project, but is far beneath accepted today as it was in its heyday. Factom has managed to almanac abstracts for the Bill and Melinda Gates Foundation as able-bodied as the U.S. Department of Homeland Security.
The blockchain-based area name account (DNS), app ecosystem, and decentralized accretion arrangement Blockstack, formally accepted as Onename, additionally has affairs to use the BTC alternation in the Stacks network. In January 2019, Stacks advance developer Jude Nelson declared how the agreement leverages the assortment ability from the BTC network. Essentially Stacks is anchored by 90 exahash of broadcast hashrate in its antecedent stages and it aims to accouter this aegis to bootstrap the arrangement and eventually alteration abroad from BTC.
Stacks additionally uses proof-of-burn by acceptance participants to provably abort or bake bitcoins. “Every actor aggressive for the befalling to address the abutting block charge bake a assertive bulk of proof-of-work badge (bitcoin) to access the competition,” Nelson capacity in a video demonstration of the Stacks protocol. Since Onename rebranded to Blockstack and transitioned to application the BTC alternation in 2015, the agreement has been a accepted activity amidst bitcoiners. In July 2019, the cofounder of Blockstack, Muneeb Ali, told the accessible that the firm’s badge auction was “qualified by the SEC beneath Regulation A .”
The Rootstock (RSK) activity is an accessible antecedent Turing-complete acute arrangement sidechain that uses the BTC alternation via merge-mining. The alternation adds multi-chain interoperability through the two-way peg to BTC and allows for acute affairs congenital on top of the network. The activity had been in the works for three years afore it mined the RSK alpha block on January 4, 2018. Developers of RSK accede it to be “the aboriginal accessible antecedent acute arrangement belvedere anchored by the Bitcoin network.” In May of 2018, RSK creators appear that the system’s acute affairs were anchored by 10% of the BTC hashrate.
By February 2019 RSK was anchored by added than 45% of the BTC hashrate and at the time advancing RSK affairs would accept amount about $112,000 per hour. Rootstock is a able-bodied accepted activity and has absorbed believers in acute affairs for years now, although some bodies booty affair with absorb mining techniques and accept the adjustment could be insecure. However, RSK added its aegis in an advancement and developers claim: “RSK merge-mining aegis could ability a akin of aegis commensurable to Bitcoin mining, for users that delay for at atomic a hundred block confirmations.”
The aftermost activity on the list, Veriblock, has been a hot affair of conversation over the aftermost year for application a cogent allocation of BTC transactions. Veriblock is a blockchain that uses a accord arrangement alleged proof-of-proof (PoP) and the ‘proof’ is angry to the BTC alternation via OP_ Return affairs and added methods of interoperability. These ‘SP blockchain transactions’ about abundance an another blockchain’s accompaniment abstracts in adjustment to account from the ballast of BTC’s security. Veriblock fabricated account aftermost February back the alternation was arresting about 30% of BTC’s circadian transactions.
Nowadays, Veriblock captures amid 15-20% and bitcoiners accept noticed the activity is now application Segregated Witness (Segwit) transactions. With a ample cardinal of affairs in February through March and the contempo use of Segwit transactions, Veriblock’s operations accept acquired some Bitcoin proponents to accuse about the project. After award out that Veriblock was application a abundant allocation of all Segwit transactions, BTC developer Luke Jr begged the association to abate the block admeasurement to lower than the accepted 1MB limit. Veriblock (VBK) additionally has its own built-in bill alleged VBK and anniversary bread is worth $0.01 on September 21.
Networks That Use BTC for Leverage Have Always Been Controversial
So far, all of these projects accept been either accustomed or hated on for the blazon of casework they accommodate and it’s been this way back the beginning. The Namecoin activity was originally activity to be hosted on the BTC alternation and alleged BitDNS, but bitcoiners took affair with that blazon of abstracts actuality hosted on the network. The altercation has been angry to all of these projects in some anatomy or addition as skeptics don’t like approximate abstracts actuality stored onchain and they accept that these practices could advance to college fees, blockchain bloat, and congestion.
A few bodies additionally anticipate that merge-mined chains could be dangerous. Even Satoshi declared that absorb mining parties could be “a crisis to anniversary added if the accessible CPU ability gangs up on one.” The Namecoin blockchain itself has served as a absolute apple agreement for absorb mining examples as able-bodied as added blockchains. Merged mining was aboriginal acclimated on Namecoin but was additionally alien to bill like huntercoin (2024), dogecoin (2024) and myriadcoin (2024). The problems associated with merge-mined bill accommodate accessible impacts on mining ability distribution, mining ability absorption issues, furnishings on proof-of-work (PoW) difficulty, and validation disincentives.
Any activity that decides to advantage the BTC alternation in some anatomy or addition activity advanced will be scrutinized and awful aloof like all these added projects. However, the permissionless attributes of these protocols has accustomed any being or alignment the adeptness to alpha such projects and no one can stop them. As continued as the basal aegis of the BTC hashrate continues to grow, projects like Veriblock will abide no amount what bodies anticipate about them.
Bitcoin’s disability to calibration could accord to these projects abrogation the BTC alternation for article added affordable, however. This can be apparent with the Tether activity and how millions of Omni Layer tethers accept been swapped for ERC20 equivalents. When Tether Bound told the accessible it was accomplishing this, it cited cheaper arrangement fees and faster transactions. All of these projects that advance the BTC alternation appropriate now could acquisition themselves in the aforementioned baiter if BTC ascent charcoal bound to 1MB blocks and Segwit transactions. If bottleneck and aerial fees amount out such projects, it’s acceptable abounding protocols could breeze into blockchains like Ethereum (ETH), and for alike cheaper fees and added block space to Bitcoin Cash.
What do you anticipate about the projects that advantage the BTC chain? Let us apperceive what you anticipate about this accountable in the comments area below.
Image credits: Shutterstock, Veriblock, RSK, Blockstack, Namecoin, Factom, Counterparty, Omni, Rare Pepe Cards, Tari Labs, and Tether Limited.
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