{"id":18892,"date":"2019-12-09T16:41:01","date_gmt":"2019-12-09T16:41:01","guid":{"rendered":"http:\/\/ci027cfe75f0082697"},"modified":"2019-12-09T16:41:01","modified_gmt":"2019-12-09T16:41:01","slug":"echo-launches-bitcoin-sidechain-a-weighted-approach-to-more-functionality","status":"publish","type":"post","link":"https:\/\/bitcoinmagazine.com\/technical\/echo-launches-bitcoin-sidechain-a-weighted-approach-to-more-functionality","title":{"rendered":"Echo Launches Bitcoin Sidechain, a Weighted Approach to More Functionality"},"content":{"rendered":"
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In late November 2019, the Bitcoin-based DApp network Echo announced<\/a> the launch of a Bitcoin sidechain on its blockchain testnet. It framed the release as a critical step in its mission to establish decentralized financial applications that leverage BTC as a native asset for lending, trading and more. <\/p>\n

\u201cThe launch of the Bitcoin sidechain on Echo testnet is the first step towards building the most trust-minimized sidechain for Bitcoin in existence,\u201d Alexei Dulub, founder and CEO of PixelPlex, the blockchain development firm behind Echo, told Bitcoin Magazine<\/em>. \u201cGetting BTC into the network trustlessly is the hardest technical problem to solve to reach that vision, but this first release is a giant step towards reaching that goal.\u201d<\/p>\n

While Dulub describes his team as advocates for Bitcoin Core, Echo sees a need to develop a sidechain that allows users to do more with their BTC.<\/p>\n

\u201cProjects like MakerDAO, Uniswap and Compound allow users to borrow against, trade and lend assets on Ethereum without a central party,\u201d Dulub explained. \u201cWe want to bring similar functionality to the most trusted, secure and liquid cryptocurrency, BTC.\u201d<\/p>\n

PoWR and the Echo Sidechain Difference<\/h2>\n

Of course, there are other sidechain projects that promise to bring more functionality to Bitcoin while leveraging its security and trustlessness \u2014 most notably, Blockstream\u2019s Liquid<\/a> and IOV Labs\u2019 RSK<\/a>. These operate through a \u201cfederated\u201d consensus model in which a small group of nodes serves as signatories for transactions, enabling these sidechains to utilize BTC as an underlying asset without having to achieve the full consensus required on the main blockchain. This means that users must trust this federation to act in good faith, a trade-off that has inspired a different approach from Echo.<\/p>\n

\u201cEcho\u2019s design aims to minimize the trust required in the nodes that operate the connection [between Bitcoin\u2019s main chain and the sidechain] by randomly selecting federation members based off of stake and frequently rotating the members,\u201d said Dulub. \u201cThis greatly reduces this risk of collusion among or coercion of committee members to act maliciously.\u201d<\/p>\n

Echo calls this consensus mechanism \u201cproof of weighted randomness<\/a>\u201d (PoWR).<\/p>\n

\u201cBy randomly selecting validators for each block rather than forcing every node to validate every block, [PoWR] minimizes the resource requirements of running a node without compromising speed or security,\u201d Dulub explained.<\/p>\n

In practice, Echo sidechain users send BTC to a multisig address on the Bitcoin blockchain that is controlled by these randomly selected federation members. Once these members confirm that BTC has been sent to the address, they mint an equivalent amount of \u201ceBTC\u201d on the Echo chain. To convert their eBTC back to bitcoin, they can send it to a \u201cburn address\u201d (an unused, unaccessible address that effectively destroys the eBTC), which will then unlock the BTC back to the user on the main blockchain.<\/p>\n

An Ongoing Challenge for Bitcoin<\/h2>\n

Dulub provided his outlook on the advantages of such a committee-operated sidechain, many of which are shared by other federated sidechains: The inherent centralization should increase the \u201cliveliness\u201d of the system and the sidechain remains safe from mainchain miners who might want to disable it, among others.<\/p>\n

But ultimately, Echo\u2019s sidechain is just the start in what will be an ongoing challenge to add more functionality and flexibility to Bitcoin while maintaining the inherent safety and decentralization of its main blockchain. It\u2019s a challenge that Echo is not alone in undertaking, but one that it may have a truly unique and powerful approach to.<\/p>\n

\u201cOur main goal is to allow Bitcoin users to do more with their BTC, without ever jeopardizing the integrity of the main Bitcoin blockchain,\u201d Dulub concluded. \u201cPerfecting the sidechain will continue to be a work in progress, but we have made great strides and couldn\u2019t be more excited to be pushing the limits of this new technology.\u201d<\/p>\n

Those interested in participating and getting their hands on this technology should visit Echo\u2019s tutorial page<\/a>.<\/p>\n

Disclaimer: The parent company o<\/em>f Bitcoin Magazine, BTC Media, LLC, is an affiliate of Echo.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

The DApp network Echo has launched its Bitcoin sidechain in testnet, which uses a \u201cweighted randomness\u201d consensus mechanism to build new functionality.<\/p>\n","protected":false},"author":2705,"featured_media":18893,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[35],"tags":[2402,151,396],"class_list":{"0":"post-18892","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-technical","8":"tag-dapp","9":"tag-liquid","10":"tag-sidechains"},"author_data":{"id":2705,"name":"Peter Chawaga","nicename":"peter-chawaga","avatar_url":"https:\/\/bitcoinmagazine.com\/wp-content\/uploads\/2024\/12\/peterc-96x96.jpg"},"featured_image_url":"https:\/\/bitcoinmagazine.com\/wp-content\/uploads\/2024\/11\/echo-launches-bitcoin-sidechain.png","_links":{"self":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts\/18892","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/users\/2705"}],"replies":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/comments?post=18892"}],"version-history":[{"count":0,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts\/18892\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/media\/18893"}],"wp:attachment":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/media?parent=18892"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/categories?post=18892"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/tags?post=18892"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}