RSK (Rootstock) Review – Smart Contracts on Bitcoin
Table of Contents
Bitcoin remains the gold standard for cryptocurrencies, but it has been left behind by other blockchains that provide better functionality and more friendly ecosystems for dApp development. RSK provides a way around this conundrum with its platform, which provides open source smart contracts and innovative mining algorithms that incentivize growth, as well as a Turing complete development ecosystem. Thanks to strong recognition and an innovative design, RSK is gearing up to optimize bitcoin.
The Idea Behind RSK
Even though newer blockchains provide significant improvements to bitcoin’s original model, namely in smart contracts, the original cryptocurrency remains the most popular coin. Nevertheless, it still lacks much of the functionality other cryptos like Ethereum have implemented which allow for dApp development and easier transacting. RSK (formerly known as RootStock) looks to improve the Bitcoin ecosystem by providing a platform for smart contracts directly on the bitcoin blockchain.
Instead of requiring a hard fork, however, the company has found a workaround by creating their platform as a sidechain and building an inventive system to handle smart contract execution with bitcoin instead of requiring conversions to other cryptocurrencies. RSK’s goal of improving transaction speeds, providing new functionality, and expanding the usability of the bitcoin blockchain is a vital component in the sector’s growth.
The RSK Team
RSK was founded by a group of Argentinian innovators based in Buenos Aires, and the company has been growing since inception. RSK has 5 founders, all of whom had previous experience in the startup world, as well as the Latin American blockchain and VC communities. The team includes expertise in web development, security, business development, and other tech-related fields.
Due to RSK’s wide-reaching scope and the nature of its technology, partnerships have been a crucial component in the platform’s evolution and growth. The company has been aggressive in seeking out both individual partnerships and new members for its RSK Federation, which fulfills a vital role in ensuring transactions and operations go off without a hitch on the RSK chain.
In November 2016, RSK Labs announced that it would partner with blockchain-based company WINGS to enable the creation of bitcoin-powered decentralized autonomous organizations (DAO). The partnership offered WINGS access to RSK’s 25-member federation.
In 2017, RSK announced partnerships with Coinfirm and Etherparty. The former was an agreement that provides RSK the AML and KYC tools to provide better compliance and regulation to the crypto marketplace while the latter was meant to help Etherparty provide better services and access to bitcoin-based smart contract functionality.
In 2018, RSK announced several partnerships, starting with Exchange Union in April. This collaboration is meant to help RSK further develop payment channel and atomic swap functionality in order to facilitate the integration of SBTC into the Exchange Union network. In May, RSK announced a collaboration with iExec aimed at providing off-chain computation to bitcoin applications. That same month, The company also announced an agreement with EVShare to assist them in the creation of an autonomous ridesharing application. In June, RSK announced an agreement with Verge to provide the company smart contract functionality for its services.
These partnerships are in addition to the formation of the RSK Federation in 2016, which acts as a trusted third party for holding coins in escrow, verifying cross-chain transactions, and performing the role of oracles on the chain. The Federation includes names like Bitfinex, BitGo, BitPay, Bitstamp, OKCoin, Blockchain Institute of Technology, BTC.com, AntPool, Xapo, wallet provider Jaxx, and BTCC.
Unlike many other projects in the blockchain sphere, RSK’s lack of a token and its merge-mining model necessitate a different form of governance mechanism. Instead of opting for a fully democratized and decentralized governance model, RSK opted to create a governance board with a defined number of seats and votes to resolve any issues arising within the chain. The board’s makeup is intended to give the community a proportional voice and represent all stakeholders equally. There are currently five seats, which break down as follows:
- One seat for miners who can use their hashing power to vote
- One seat for bitcoin and RSK which is voted for with Proof of Stake
- One seat for exchanges and wallets which is voted for through the RSK Federation
- One seat for RSK and Bitcoin Core developers who vote wit a special threshold system
- One seat reserved for a non-profit bitcoin institution such as the Bitcoin Foundation
RSK is built as a side-chain to the main bitcoin blockchain, but it offers several innovations that make it a unique platform with intriguing functionality. The most important of these is the ability to create Turing-complete smart contracts that can be executed directly through bitcoin. This requires several key technical components.
Two-Way Pegging – Because bitcoin doesn’t have smart contract functionality built into its roots, it is difficult to transact and execute smart contracts directly with blockchain. RSK works around this by using a two-way peg of bitcoin, which means that instead of transferring bitcoins with contracts, they are being executed in SBTC, which mirrors BTC prices.
When a smart contract is built, the amount of BTC required is not transferred, but instead put into a locked account, and the exact amount of SBTC is liberated to fulfill the contract’s terms. The funds are held by an account with a secure protocol that ensures the same BTC cannot be unlocked on both the bitcoin and RSK chains simultaneously. RSK achieves this through the use of multisig wallets whose funds are secured by the RSK federation. Coins have the same public keys as their SBTC counterpart so that users who control a BTC’s private key will also hold the same SBTC.
Merge-Mining – The other unique aspect of RSK is that instead of opting for a completely new method of mining and consensus, it uses a Proof-of-Work model that allows miners to work on both the bitcoin and RSK chains simultaneously. Through RSK’s merge-mining model, miners can use the same hardware and the same resources to mine both blockchains simultaneously. RSK’s chain uses the same SHA 256 cryptographic hashing function, though it uses single SHA256 as opposed to bitcoin’s double SHA256.
DECOR+ Protocol – To avoid the problem of conflicts when deciding between two blocks to attach as the consensus tip, RSK also developed a protocol that resolves any issue between miners completing a hash simultaneously. More importantly, it reduces the need for competition and ensures there is less chance of having to reverse blocks. This, in turn, reduces the block interval from bitcoin’s standard to an average of 10 seconds, faster than even Ethereum’s 16-second intervals.
RSK Transaction Speeds and Execution
One of the biggest problems most businesses have with the bitcoin blockchain is the time it takes for transactions to be verified and payments to clear. Reducing this speed is one of RSK’s primary goals, and the project’s architecture has shown promise thanks to several key factors. The first is the way in which blocks are processed with DECOR+, which reduces the need for competition in block selection, as well as a more centralized model through its RSK Federation which reduces the friction many transactions face when being processed. Currently, RSK’s 10 second transaction average is well ahead of bitcoin’s 10 minute times thanks to its use of DECOR+ and GHOST.
Roadmap and Future Plans
The company mined its genesis block in January after 3 years of work and planning, and it has stated repeatedly through official channels that it will be launching its mainnet efforts in phases to avoid security vulnerabilities and possible problems. The mainnet—codenamed Bamboo—has been active since, and the company is working on a new layer of business services infrastructure much like Amazon Web Services. Additionally, RSK is still working on its Orchid network upgrade, which is set to continue through the end of 2018.