The Bitcoin ecosystem has been flourishing, with the development of sidechains becoming a key focus. Bitcoin, which has been around for 14 years, holds an unshakable position in the cryptocurrency and blockchain space.
Earlier this year (2023), a developer kicked off the era of “minting NFTs” on the Bitcoin blockchain through the Ordinals protocol. This was followed by the creation of the “BRC-20” standard, which allows the issuance of tokens on the Bitcoin network. These innovations have brought forth new possibilities and applications to the previously simple Bitcoin network.
However, Bitcoin and Ethereum differ in their initial designs, and “scalability” is a bigger issue on the Bitcoin network. As a result, many developers have recently proposed different solutions to enhance Bitcoin’s functionality, with the creation of sidechains being one of the most discussed approaches in the community.
“Porting” the Ethereum Virtual Machine: What is Spiderchain?
Botanix Labs has recently introduced a new sidechain design called “Spiderchain,” aiming to “port” the Ethereum Virtual Machine and its operational model onto the Bitcoin network.
Jameson Lopp, the co-founder and CTO of Bitcoin self-custody company Casa, has also written an article about Spiderchain.
A sidechain is an independent blockchain that is somehow connected to the main network. Usually, both the main network and the sidechain use the same cryptocurrency (in this case, Bitcoin) and can leverage the security guarantees of the Bitcoin network. Sidechains also enable Bitcoin users to enjoy benefits that the Bitcoin main network cannot provide, such as scalability, programmability, and privacy.
However, most sidechains face the challenge of establishing a “two-way peg” that allows Bitcoin to securely move to the sidechain and back without the need for a centralized intermediary. This is where Spiderchain, developed by Botanix Labs, comes into play.
How is Spiderchain different from other sidechains?
Spiderchain is a Bitcoin Layer 2 Proof of Stake sidechain that employs a decentralized multi-signature entity called the “Orchestrator.” The Orchestrators run both Bitcoin nodes and Spiderchain nodes.
Users simply need to deposit Bitcoin into a multi-signature wallet to participate. The Orchestrators control the incoming and outgoing requests by managing the multi-signature wallet, ensuring the absence of malicious actors and maintaining activity.
Spiderchain operates in many ways similar to Ethereum, including compatibility with the Ethereum Virtual Machine, 12-second block times, and the use of Proof of Stake consensus mechanism for network security. The compatibility with the Ethereum Virtual Machine is a significant feature, as developers can easily migrate existing Ethereum DApps to Spiderchain.
The underlying architecture of Spiderchain differs significantly from most previous design solutions. Spiderchain does not directly rely on miners for consensus or employ any form of merged mining. It establishes a Layer 2 Proof of Stake system on Bitcoin using multi-signature and collateral bonds. Importantly, Spiderchain can operate without any changes to Bitcoin, meaning no soft forks or upgrades are required.
However, Lopp’s blog post also highlights potential technical vulnerabilities of Spiderchain. One risk is that if the Bitcoin blockchain experiences more than five block reorganizations, the peg between Spiderchain and Bitcoin could be compromised. Additionally, he notes that the cost of launching a sidechain is high, making it challenging to realize this vision before addressing these issues. Despite the slow progress of Bitcoin sidechains after years of research and discussion, Lopp believes that Spiderchain is meaningful and eagerly anticipates its future development.
Willem Schroé, the founder of Botanix Labs, acknowledges that Spiderchain will initially operate in a centralized manner during the early stages of network development, until more users are willing to participate and collateralize Bitcoin.
References:
– Jameson Lopp
– Decrypt
– bitcoinmagazine
Proofread by Gao Jingyuan.
