Blockstream has been working on projects to extend Bitcoin for quite some time.
It is one of a few such companies that believe that the block chain, and Bitcoin more generally, can be extended beyond its current abilities, and that experiments can take place which later on could benefit Bitcoin itself. One of its long-awaited projects has now been released to the community, Sidechain Elements. This project essentially serves as a codebase for sidechain developers to build sidechains. The burning question is: what is a sidechain?
A sidechain is pretty much an alt coin without the alt, an alt coin that builds on top of the Bitcoin block chain directly. This is something like Counterparty, and somewhat like Ethereum. From the sidechains white paper [PDF]:
We propose a new technology, pegged sidechains, which enables bitcoins and other ledger assets to be transferred between multiple blockchains. This gives users access to new and innovative cryptocurrency systems using the assets they already own. By reusing Bitcoin’s currency, these systems can more easily interoperate with each other and with Bitcoin, avoiding the liquidity shortages and market fluctuations associated with new currencies.
Think Factom, But For Anyone
It’s all quite theoretical until it’s not. Now the code is in the wild; we will start seeing developments come out of it, presumably. What is to come, no one can predict accurately from here. What we do know is there is working code, such as this little gem, “Basic Asset Issuance,” which is still in the early development phases:
Users can issue their own assets which represent fungible ownership of the underlying asset type representing by the newly created units, which could theoretically represent any asset including vouchers, coupons, currencies, deposits, bonds, shares, etc (subject to the respective jurisdiction’s regulatory requirements.
Sounds a lot like the kind of work Factom is doing, you might think, and that’s probably because it is a lot like that. The overall purpose of the Elements project is, as stated on their actual Github page “to bring more technical innovation to Bitcoin.” It is a testnet for broader purposes, basically, a way for the bleeding edge to get out ahead of the community and potentially pave the way for future, major developments.
The thing about open source software is that when something picks up momentum, it can move from flash to bang a lot faster than with small, dedicated teams. Often enough, more than one company is willing to dedicate resources to this or that purpose. We can only hope that companies with specific applications will get behind this and other current open source projects to push them forward, with both resources and man hours.
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