Shinobi’s Strawman is a weekly collection the place our Technical Editor Shinobi challenges the Bitcoin neighborhood, aiming to fire up dialog round heated technical debates.
We’re going to strive one thing of an experiment right this moment.
Drivechains are being proclaimed by some because the savior of Bitcoin, the reply to all of its issues. It solves the long run safety price range, permits full freedom to include new options into Bitcoin, and presents no downsides for current Bitcoin customers.
Sounds too good to be true? It’s:
1) Drivechains Change Miner Incentives
Drivechains introduce a hodgepodge of recent variables into miners’ incentives, and after introducing that instability advocates push for customers merely adopting a degraded safety mannequin for all new use circumstances and performance through the use of a sidechain in lieu of fixing the bottom layer. How is that this any totally different than an outright assault on Bitcoin self custody?
2) Current Sidechains Have No Adoption
There have been many various design proposals for sidechains over time, however the one at the moment deployed ones are run by federations (Liquid and RSK), each of which have failed to realize any significant degree of adoption since they had been deployed. Does this imply sidechains will not be value continued growth effort? Or are they value it, and the failure of federated chains to be adopted is just the results of shortcomings in that particular sidechain design?
3) Drivechains Exacerbate The Dangers Of MEV
MEV is one thing that’s doable on Bitcoin already, as techniques like Stacks are demonstrating, however at the moment the types of MEV doable on Bitcoin are both generated by completely impartial altcoins like Stacks (which traditionally have trended to an insignificant proportion of miners’ revenue, like Namecoin), or very low within the degree of complexity (like frontrunning Inscriptions). Drivechains open the door to arbitrarily complicated types of MEV on sidechains, whereas additionally guaranteeing that the token producing that MEV is pegged to the value of Bitcoin. I.e. it can not merely fade away to an irrelevant fraction of miner revenue as individuals cease shopping for an altcoin. This drastically worsens the dangers and potential injury of MEV on Bitcoin.
4) No, Swap Markets Aren’t An Reply
Paul Sztorc replied to a few of these issues on Twitter, however these responses do not likely tackle the basis points. Swap markets would possibly sound like a solution, however the actuality is that these simply shove the liquidity necessities onto one more social gathering, assuming they are going to present large quantities of liquidity for nearly nothing in return. That may work for small scale utility customers, or having liquidity out there to arbitrage uncertainty across the peg, I don’t suppose it is a foregone conclusion that sufficient liquidity to cowl the “answer to the safety price range downside” with out slippage is a given, to say nothing of all the opposite customers who would wish to swap out and in. He then goes on to disregard the distinction between a mainchain reorg, which requires redoing work and vitality expenditure, versus a sidechain reorg which doesn’t. Lastly, he equates a random individual for no logical or revenue pushed purpose giving cash away with somebody producing a revenue with an exercise they’re the only real gatekeepers of.
Look, finally, I’m a Bitcoin maximalist. I need what’s finest for Bitcoin.
I feel drivechains are silly, harmful and a waste of time, however I wish to hear your ideas on the topic. Am I unsuitable in regards to the factors above? Is there one more reason that I ought to be in opposition to drivechains that I’ve neglected?
Please don’t write to me with some random hopium. I’m open to novel opinions. I need the dialog to progress. Above is my finest summation – we merely aren’t anyplace near a significant consensus on drivechains.
My DMs are open. Opinion@bitcoinmagazine.com. Let’s hash it out.