Bitcoin Drivechain has been officially released as of 24 September 2018, after about three years of being developed. Drivechain enables Bitcoin sidechains, which can be useful for building decentralized applications (Dapps) and exploring new Bitcoin technology. They also act as a scalability solution for Bitcoin.
The primary purpose of the Bitcoin Drivechain is to provide the framework to build Bitcoin sidechains. The sidechains will be intimately linked with the main Bitcoin blockchain, and users will be able to exchange Bitcoin for the sidechain versions of Bitcoin via a two-way peg. A user will lock up normal Bitcoins with a smart contract, and then receive the sidechain version of Bitcoin that they choose. They can convert this sidechain back to regular Bitcoin at a later time, or use atomic swaps to trade sidechain Bitcoin for regular Bitcoins at different exchange rates.
Developers will be able to use Drivechain to launch modified versions of Bitcoin. This circumvents the often arduous and controversial process associated with modifying Bitcoin’s code. If a developer wants to change an aspect of Bitcoin they can simply launch a sidechain. This is expected to accelerate the advancement of Bitcoin technology. Additionally, since Bitcoin will be intimately linked to the sidechains, Bitcoin’s price could go up on increased utility.
Some ideas proposed for Drivechain sidechains are databases, financial marketplaces, coin mixing, casinos, a Bitcoin Domain Name Server (DNS) system, integration with traditional banking systems like SWIFT, and a proof of stake (PoS) version of Bitcoin. Perhaps the most interesting use of sidechains is the development of outside-the-box new technology that can make Bitcoin more efficient, more secure, and generally higher tech.
Clearly, Drivechain will allow Dapps to be built on top of Bitcoin, in the same way Dapps are built on Ethereum. It might be more desirable for these to be built with a platform directly linked to Bitcoin’s blockchain, and this could be a serious competitor for Ethereum.
That being said, sidechains built with Drivechain have their own blockchains, and their blockchains are secured with proof of work (PoW). Bitcoin’s mining hash rate will not go towards securing the sidechains, and transactions will not take up space in Bitcoin blocks. Further, the presence of multiple sidechains that can be used to transact money will likely divert transaction volume away from the Bitcoin main chain, increasing the space available in Bitcoin blocks.
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