First Bitcoin Smart Contracts Sidechain Now Secured By 1 in 10 Miners

The first bitcoin smart contracts sidechain just reached an early milestone.

To be revealed Monday at CoinDesk's Consensus 2018 conference, RSK, the startup that built the long-anticipated technology, touted as a way to bring ethereum-style smart contracts to the world's largest cryptocurrency, is issuing new details on the number of bitcoin users dedicating computing power to backing the experimental idea.

First launched this past January, the sidechain pegged to bitcoin was admittedly limited in that it's not pegged to bitcoin in a "Trustless" way advocates have promised for so long.

Rather, anyone who wants to move their bitcoin to the sidechain needs the approval of a 'federation' group of third parties.

"It's a major announcement for bitcoin as a whole. This 10 percent is coming from 80 percent of the total mining pool power."

It makes sense, after all, because the sidechain is designed to be "Merged-mined" - a process which allows miners to get transaction fees by contributing their hash power to the sidechain, all while using the same equipment, electricity and power they're already using to mine bitcoin.

The RSK sidechain uses what the company calls "Smart bitcoins," a separate version of bitcoin with the smart contract capability, and that allows for improved scalability.

"On RSK you can process smart bitcoins at 100 transactions per second," Kurman said, pointing to the "Compression" technology RSK pioneered that decreases the total amount of data that must be stored on the blockchain.

Taking inspiration from developers working on both bitcoin and ethereum, who have been developing technologies called the lightning network and Raiden network, respectively, RSK has been building a similar technology.

The second company building on top of RSK is the BitGive Foundation, a long-standing bitcoin-focused charity organization that's been used to funnel bitcoin donations to Nepalese citizens affected by a devastating earthquake in 2015, among other initiatives.