Smart contracts are crucial components in the blockchain industry. They unlock many opportunities regarding financial services. The functionality of smart contracts makes them great options for those looking for a decentralized financial sector.
Ethereum was the first blockchain to leverage smart contracts. Bitcoin, on the other hand, didn’t have the required elements to support this functionality. But developers have tried hard to create products that bring smart contracts to the Bitcoin blockchain. RSK is one of those solutions. It aims to grow a DeFi ecosystem around Bitcoin.
What is RSK (Rootstock)?
RSK is the first platform with a focus on bringing smart contracts to the Bitcoin blockchain. It uses a Turing complete virtual machine to bring the functionality. The fundamentals are somehow like the Ethereum smart contracts but with the protection of Bitcoin security layers.
The goal of RSK is not limited to smart contracts. It tries to increase the use-cases of Bitcoin blockchain by improving some of the current services. Faster transactions and more effortless scalability are some of the focus areas of the RSK team.
RSK is developed by a team that introduced QixCoin in 2013. The new product relies on a Turing complete virtual machine like QixCoin to complete the transactions. As a result, it offers swift transactions with the security layers of the Bitcoin blockchain.
Sidechains are standard solutions in the blockchain world. They add some functionalities to the primary network by adding some layers. RSK is somehow a sidechain to Bitcoin blockchain.
Technology
Providing smart contract functionalities to the Bitcoin blockchain needs some technological advances. Many components work together in this sidechain to make it possible to develop smart contracts. Below you can see some of them.
Smart Contracts
Smart contracts are the innovative kinds of contracts that leverage cryptography to secure the terms. They trigger automatically using computer codes. Financial services are the most common use-cases for smart contracts.
RSK claims to have the most secure smart contracts in the blockchain world. The IOVLabs tries to expand its current offering and scale the smart contracts functionality in RSK. They have multiple layer 1 proposals for improving the scalability and strength of their Bitcoin-based solutions.
RSK Name Service
RSK Name Services (RNS) are solutions from the RSK team focusing on making the product more user-friendly.
It offers the chance to create a blockchain address with human-readable names. These addresses are great for use in payments. You can send money to your friend with an address like email or domain name.
Federation
Many blockchain projects are supported by multiple groups are companies. RSK is one of them. PowPeg Federation is a group of blockchain companies with high-security standards that launched the RSK blockchain.
There are multiple security, regulation, and technology requirements for companies that want to become federation members. The essential role of the Federation in RSK is to secure the two-way-peg in the blockchain.
Merged Mining
RSK blockchain relies on mining like the primary Bitcoin blockchain. Merged mining is the functionality that makes it possible for RSK to be mined simultaneously with Bitcoin.
Both Bitcoin and RSK blockchains rely on the Proof-of-Work mechanism. It’s the reason that both blockchains can be mined simultaneously.
Use Cases
As mentioned before, smart contracts bring many opportunities to a blockchain. With the combination of smart contract functionalities and Bitcoin security, many use-cases become possible in RSK. some of the most important ones are:
- Charity
- Investment
- Insurance
- Logistics
- Entertainment
- Government
- Supply Chain
How Does RSK Work?
RSK should be somehow connected to the Bitcoin blockchain to provide a smart contract functionality. It uses a solution called a 2-way peg.
Sidechains like RSK need unique tokens to be able to connect to the main blockchain. RSK uses a version of Bitcoin called Smart Bitcoin or RBTC.
The blockchain uses this token for internal activities. Smart contracts and dApps in RSK use RBTC for payments and other use-cases.
RSK receives BTC from users and applications and turns them equally to RBTC to be used in dApps.
Another vital component in RSK is its virtual machine that manages the smart contracts. Rootstock virtual machine or RVM is very similar to the virtual machine in the Ethereum blockchain (EVM). But RVM uses RBTC, not gas, for fueling the smart contracts.
RVM is also compatible with EVM. As a result, Ethereum contracts can run on RSK, too.
RSK Features
RSK plans to bring Bitcoin to the DeFi world by providing the smart contract functionalities for the blockchain. It focuses on multiple features to show the bright future. Some of them are:
Security
Merge-mining is the fundamental component for securing the smart contracts on RSK. But the blockchain has some other security layers, too. Merge-mining brings the mining power of the Bitcoin blockchain to the RSK sidechain.
The two-way peg that makes it possible to have one equal RBTC for each BTC is another security layer in RSK. Besides, RSK works with PoW algorithms like Bitcoin. The cryptography algorithm SHA256D like Bitcoin, too.
Scalability
RSK plans to scale the Bitcoin blockchain next to smart contract functionalities. The sidechain can execute 11 transactions per second, but the development team plans to increase it to 20,000 tx/seg using Lumino technology.
The compatibility of RSK to Ethereum brings another chance for this blockchain to scale faster.
Privacy
As mentioned before, RSK has many similarities to Bitcoin and Ethereum. So, it leverages the privacy features from both of them. Cryptography, censorship-resistance, and other similar features are available in RSK, too.
SmartBitcoins (RBTC)
RBTC is the primary token for the RSK blockchain. It’s a 1:1 pegged token to BTC. The total supply for this token is exactly like BTC, which is 21,000,000. Many wallets like MyCrypto, Beexo, Ledger, Metamask, and Defiant support RBTC. Some exchanges like Huobi, Bithumb, and Bitfinex support it, too.
Ethereum – Smart Contracts Vs. Bitcoin – Smart Contracts
Ethereum brought smart contracts to reality first. Many of the dApps you see today run on Ethereum. The DeFi boom is a result of adequate support for smart contracts in Ethereum. The blockchain has a virtual machine to manage the smart contracts.
There are many similarities between RSK or Bitcoin smart contracts and Ethereum smart contracts. They both have virtual machines. But they have many different components.
RSK is compatible with the Ethereum network. The blockchain is significantly smaller than Ethereum because of less activity. Ethereum is working on improvements to become a Proof-of-Stake blockchain. So, when Ethereum 2.0 lanches, RSK and the new version will have many differences.
Conclusion
RSK plans to bring the smart contract functionality to the Bitcoin blockchain. With enough adoption and user-base, it can remove the difference that has been present for some years between Bitcoin and Ethereum. Maybe solutions like RSK can solve the scalability and speed challenges of the Bitcoin blockchain, too.
Links to the project
- Web: https://www.rsk.co/
- Whitepaper: https://www.rsk.co/Whitepapers/RSK-White-Paper-Updated.pdf
- Twitter: https://twitter.com/rsksmart
- Telegram: https://t.me/rskofficialcommunity
- Youtube: https://www.youtube.com/rsksmart
