Thread
Drivechain aim to minimize the need for trust by relying on Bitcoin miners to validate and merge mined sidechain blocks. This way, they leverage the immense hashpower of the main Bitcoin network. The idea is to "drive" the sidechain security through Bitcoin's PoW consensus.
And sidechain can leverage smart contract technology to achieve two-way pegging, enabling high throughput while ensuring user asset control.
So it’s time for 'Plasma' & 'NOCUST'…
Replies (7)
Wouldn’t it be up to sidechains to choose what type of nodes they use? What if most profitable chain decides to use very expensive nodes? For Bitcoin miners it would mean they need to buy those nodes to stay competitive with other miners. That would change the economic incentives and add another centralizing threat to Bitcoin mining, right?
Hmmmm! Perhaps, choice of nodes & economic incentives mixed with different sidechain implementations (SIP) can indeed have ripple effects on the entire network including the mainchain (Bitcoin).
Hypothesis: Gini Coefficient & Mining Centralization.
The Gini coefficient is a mathematical measure of inequality in a distribution. In the context of mining, we can use it to quantify the distribution of mining power among participants. A Gini coefficient of 0 represents perfect equality (everyone has the same amount of mining power), while a Gini coefficient of 1 represents maximum inequality (one participant has all the mining power).
Now, let's consider a scenario where a #sidechain introduces a highly profitable mining method that requires expensive hardware, creating an economic incentive for miners to switch. This can indeed lead to centralization if only a few entities can afford the expensive nodes, resulting in an increase in the Gini coefficient for mining power distribution.
But, mathematically I don’t think this would happen early on the process if sidechain developers & researchers aim to strike a balance between innovation & preserving the fundamental principles of decentralization that underpin Bitcoin's security & robustness (Decentralized sidechain governance, different PoW algorithms for different sidechains, dynamic rewards & incentives for mainchain miners). But the idea of PoS should be avoid..
Thanks! So following your logic that could happen eventually. By implementing #drivechains to Bitcoin, we could introduce a ticking bomb and would “disarming” be even possible then?
If this can potentially lead to unforeseen consequences, the likelihood of possible centralization should be eradicated. The entire scalability of the Blockchain is a crucial phenomenon that requires internal & external meticulousness…
Agreed
You're describing merged mining here, not drivechains.
Drivechains increase the need for trust by giving custody of sidechain funds to miners no strings attached
Thanks for enlightening me more on that! However, I thought this could be an effective component to drivechains. There’s really a difficulty in untangling & articulating two types of scalable representations, some merged, others attached to the custody of the funds of sidechain, in particular complementary & based on a soft guarantee.
