Bitcoin is one of the widely used blockchain platforms today. Maybe, the bitcoin network alone experiences a number of transactions than any other blockchain network. But the bitcoin network is widely applied in monetary and financial transactions only, i.e. for transferring bitcoin. Another Blockchain network Ethereum, which can perform more functionalities like smart contract implementation and digital asset management is not well utilized at the same time. RSK is an attempt to bring the capabilities of Ethereum to bitcoin blockchain. Thus enhance the capabilities of the mostly used blockchain network.
RSK is an open source smart contract platform which allows development and implementation of smart contracts over bitcoin blockchain. It exists as a side chain of the blockchain. A sidechain is a separate blockchain exist along with the main blockchain with a back and forth transaction compatibility. There are miners to validate the transactions in RSK but the network doesn’t have its own currency. The miners are rewarded with bitcoin via merge-mining. The 2-way peg between RSK and Bitcoin ensures a constant connection between RSK and Blockchain.
EVM and RSK
RSK provides a Turing complete virtual machine which is backward compatible with EVM. This virtual machine imparts the features like smart contract development and digital asset management to Bitcoin blockchain. In fact, with EVM (Ethereum Virtual Machine) based RSK side chain, the bitcoin blockchain will get the advantages of an Ethereum network.
As mentioned earlier, the 2-way peg between RSK and Bitcoin facilitate the currency transaction between RSK and the Bitcoin network. When a user tries to convert Bitcoin to Side chain bitcoin, the amount will be blocked in bitcoin blockchain and the same amount is released in the side chain. The reverse process is carried out when a user tries to transact Side chain BTC to main BTC.
Currency transfer between RSK and Bitcoin
Since bitcoin blockchain does not know about the transaction on sidechain, transferring from BTC to RSK and backward is a bit complex. To reduce the complexity and secure the transactions, RSK seeks the help of Federation of leading bitcoin companies. In order to release the fund in a network, a federation member need to sign the transaction. RSK protocol accepts these federated checkpoints (the signed transaction) and validates a transaction. The federation members are rewarded for authenticating the transactions.
The normal transaction rate in RSK is 100 transaction/second. It is scalable up to 2000 on-chain transaction/second with open source RSK testnet and 20,000 off-chain transaction/second through Lumino transaction compression protocol
“An off-chain transaction is a transaction which involves the movement of an asset to outside of the blockchain. The off-chain transaction does not require the network confirmation, thus they are quicker”
Merge mining is a process in which miners can mine two or more blockchains at the same time with the same algorithm and earn reward from both networks. Here the bitcoin miners can mine both bitcoin and RSK simultaneously with the SHA256 algorithm.
Ginger is RSK’s open source testnet network. This network gives more functionalities such as smart contract, new revenue stream and greater scalability to the bitcoin network.
The RSK is a promising technology from a bitcoin point of view, which indeed strengthens the capabilities of a powerful blockchain network. But there are some security challenges it facing in 2 way pegging and merge mining. However, the technology has the potential to drive the bitcoin network to more wide application areas.