Vitalik Buterin, a 16-year-old Canadian with a passion for writing code, was excited about bitcoin after he read the white paper in late 2013. He thought the Blockchain, the technology underlying it, however, could do more than just move money from point A to point B.
According to Buterin, the challenge was that Satoshi Nakamoto had designed the bitcoin Blockchain in a way that it could only support currency applications. He believed this couldn’t be changed, even with extensive tweaking.
“Bitcoin was designed to be a [Simple Mail Transfer Protocol] SMTP. It’s a protocol that is very good at one particular task. It is good for transferring money, but it was not designed as a foundational layer for any kind of protocols to be built on top.”
Consequently, Buterin set out to create a different Blockchain, one that could support a limitless number of applications, and Ethereum was born. Years later, the platform has become a force to be reckoned with. Startups in droves are building smart solutions on top of it, ranging from door locks, to self-driving cars, to virtual decentralized anonymous organizations (DAO).
Bitcoin enthusiasts are increasingly pushing back. Those who think the bitcoin Blockchain is flexible enough to support innovation beyond currency are a fast-growing group. Most importantly, developers are busy working to challenge Ethereum’s monopoly on supporting decentralized applications (DAPPs).
The RSK Federation, a consortium of over 25 major companies operating in the bitcoin space, leads the onslaught. Names on the list include the likes of Xapo, BitPay, Bitstamp, and Bitfinex. In a blog post, the RSK team explains that everyone is welcome to be part of the open-source project. They write:
“RSK is an open source project and as such, the participation and engagement of the whole community is extremely important.”
RSK Federation officially launched in August. Its primary goal is to leverage the smart-contract solution that Rootstock, a Buenos Aires-based startup, developed. The consortium will build a Turing-complete, smart-contract layer on top of bitcoin to support a broad range of applications. Wences Casares, CEO Xapo, had this to say:
“We are very excited about what RSK is doing by bringing Ethereum-like capabilities to the Bitcoin network.”
To use the platform for any purpose, an entity will need to spend smart bitcoin fuel, a kind of colored coin. You can acquire them by sending bitcoins to a special address on the RSK platform. According to the blog post, a portion of the fuel goes to bitcoin miners and the rest goes to support the project. The RSK team writes:
“Every time a person or a corporation runs a smart contract on RSK, 80% of the fuel paid goes to the miners and the remaining 20% to RSK Labs, so we can continue the development of the open source platform.”
RSK isn’t a competitor to Ethereum, according to the designers of the platform. They say they intend it to be compatible with applications already running on Ethereum. The end game is to allow cross-chain communication between the two.
This will come thanks to a 2-way peg (2WP) feature built into the RSK platform. The feature allows the transfer of bitcoins to a secondary Blockchain, such as Ethereum, and back.
Bitcoin’s bright future
In March 2016, the RSK project announced that it had raised $1 million from various investors. One was Bitmain Technology, a bitcoin mining hardware manufacturer that could bring value expertise to the building of the platform. Other investors include Coinsilium and Digital Currency Group (DCG), investment firms with substantial interests in Blockchain startups.
Barry Silbert, the CEO of DCG, expressed optimism that Blockchains with smart-contract capabilities, including bitcoin, will drive global financial and political inclusion, as well as advancement of the Internet of Things (IoT).
“Our team at DCG feels that Rootstock developing is important for both the technical and business communities building on Blockchain technology today, and will enable many new use cases that have not been possible to date”.
Diego Gutiérrez Zaldívar, the founder and CEO of Rootstock, the company powering the project, thinks smart contracts on top of bitcoin will make the cryptocurrency even more powerful. He said:
“The whole extension of bitcoin, and solving some of its biggest challenges with richer scripting, will solve a lot of [its] shortcomings … in the coming years while protecting [its] intrinsic value.”
If the RSK Federation succeeds, it could change the course of bitcoin. It could also safeguard bitcoin’s relevance in a future full of cryptocurrencies fighting to win the market.
On November 5, the team behind the project announced the release of Turmeric, its tesnet network.
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- RSK: Making the Bitcoin Blockchain More Like Ethereum 2.0 - December 7, 2016
- Rupert Hackett: Self-driving Cars Might Fail without the Blockchain - October 19, 2016
- The Ethereum Blockchain is Helping Create the Next Generation of Tokens - October 10, 2016