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In this episode of “The Van Werdenum Sjorsnado”, presenters Aaron van Werdenum and Sjors Provoost are again accompanied by Ruben Somsen. The trio discussed Drivechain, a sidechain project led by Paul Sztorc.
Sidechains are alternative blockchains that have coins tied to Bitcoin. This should make the sidechain coins interchangeable with Bitcoin and therefore have the same value. In a way, with sidechains, users can “move” Bitcoin over blockchains, where they are subject to different protocol rules, allowing for greater transaction capacity, more privacy, and other benefits.
Van Werdenum, Provoost and Somsen stated that Drivechain consists of two main innovations. The first is blind-merged mining, which allows Bitcoin miners to secure Drivechain with their existing hash power, but without necessarily having to validate everything that happens on the sidechain. The second is the Hash Rate Escrows, which miners can use to “move” coins from the Bitcoin blockchain to the sidechain and back.
The hosts also discussed some of the benefits as well as the complications with Drivechain, particularly the safety implications with miners in control of the pegging-out process. They looked at the arguments why this process is incentive-compatible (in other words, safe) – or why it might not be.