The "Sidechain Vision" for Bitcoin

What should Bitcoin be like, in the future?

These six ideas comprise (what I call) the “sidechain vision”.

Few will resist any single idea, in isolation. But rarely will someone endorse all six simultaneously…

…at least, so far!

Here they are:

Bitcoin must ossify.

• Every change is an attack vector.^{1 2 3 4 5}
• Previous changes have introduced harmful/controversial elements, even via soft fork:
  • The 4 MB blocksize increase⁶ in 2017.
  • The SegWit-input perverse incentive⁷ (also 2017).
• If the protocol is frozen, then users can learn Bitcoin, via firsthand experience. They do not need to be coders (just as we use electricity without being electricians).

2. The blocksize must shrink.

• See Luke Dashjr’s argument⁸ for shrinking the blocksize.
• If users transact on Layer2s, then 0.2 MB blocks [ie, 36,000 txn/day] for layer1 is already overkill.^{9 10 11}

3. Fee Revenues must rise.

• Fees are stubbornly low.^{12 13}
• As the subsidy wanes, total security budget will leave the network vulnerable to attack.^{12 13 14}
• Merged Mining is both necessary¹² and sufficient¹⁵ for effective Fee Revenues.

4. Bitcoin must become interoperable (ie, "MultiChain").

• Today, in any protocol dispute, one group must leave disappointed. (Ie, blocks cannot be both large and small.) But: an idea can still be good, even if it is inferior. (Ie, coach class seats can still be profitable, even if the airline relies primarily on First Class.¹⁶)
• A protocol with willing miners, devs, and users, will exist. If not as a BTC-sidechain, then it will exist as an Altcoin. These Alts “sneak”¹⁷ around the 21M coin limit, and threaten the network effects¹⁸ that BTC needs to survive. But with sidechains, the Altcoin-justification argument is reversed: there is no story an Altcoiner could tell, that an investor would accept.
• The “MultiChain Bitcoin” idea is very old^{19 20}, and technical opposition to present-day sidechain-tech is unfounded²¹.
• On Ethereum alone, there is already over 275,000 “wrapped BTC”. Bitcoin will become multichain, on Altcoins if not on Bitcoin.
• Choice isn’t just efficient - choice is a moral issue.^{22 23}

5. Lightning isn't enough.

• It would take over 120 years to onboard 8 billion people to the LN.²⁴ LN cannot be the only scaling solution. Some senior LN Developers argue this in public.²⁵
• The onboarding problem has two solutions –CTV and channel factories– but each is unreliable. Each can be DoS attacked, for free, thus consuming many more bytes (hence reducing the onboarding rate further, not increasing it).²⁴
• LN is inappropriate for many use-cases.^{16 26} Other Layer2s are needed, sidechains in particular.

6. Bitcoin Development needs Competition.

• The Bitcoin Core Development process utilizes deliberation. But deliberation is inferior to competition. Especially in fields where so much is happening. Review cannot keep up; it is too much for any individual or group to manage, USSR-style. We need institutionalized opposition.²⁷
• By design, Core will reject good-but-controversial ideas.²⁸ Thus, today’s protocol is sub-optimal.
• Most new ideas do not engage with Core, they instead launch as Altcoins.²⁹
• Core helps devs enhance their careers/reputation; but the end user is neglected.³⁰ This is immoral.
• Soft forks now take years.³¹ (Meanwhile, the damage done by the overlarge Blocksize is already being done⁸, each day.)
• The “activation” process is based on informed consent, which doesn’t exist.³² Most SegWit supporters did not understand SegWit; and most Drivechain supporters do not understand DC. This is normal and healthy.³³

Well, what do you think of this Vision?

If you hate it, you should publish your own! After all, you can’t beat something with nothing.

If you liked it, join our Bip300 sidechain Telegram!

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Footnotes

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