What is Drivechain? Why is It Essential for Developers?

What is Drivechain? Why is It Essential for Developers?

Technologies are expansive, they evolve and bring forth new solutions. The world has seen a number of decentralized programs since the advent of Bitcoin. Blockchain has now expanded itself in so many forms. Every new solution addresses a certain issue. Thus, we get solutions like Drivechains that come with several benefits. 

Drivechain in A Nutshell

Bitcoin was a single-layered technology that didn’t come with high scalability. It didn’t allow developers to do more than just mining. So, developers started working on a Bitcoin layer-2 technology to enhance its blockchain’s capacity. The outcome was Drivechain! It allowed altcoins to co-exist with Bitcoin. 

Drivechain offered a permissionless environment, improved scalability, and new features. However, they cannot be implemented without a soft fork. It leveraged two different mechanisms, which are Blind Merge Mining and Hashrate Escrow. The founder and CEO of LayerTwo Labs, Paul Sztorc introduced it in 2015. 

He presented it as the means to prevent the fragmentation of Bitcoin. This happened because of forks arising out of consensus disagreements. It also facilitated altcoin experimentation in Bitcoin and terminated intertoken competition. Sztorc envisioned a new ecosystem with Drivechain that would store Bitcoin and altcoins in a single chain.

Significance of Drivechain for Crypto Space

Drivechain allows Bitcoin users to store Bitcoins and create new tokens using its protocol. The new assets will even have the merits of BTC. In essence, Drivechains function as independent blockchains. They will also be merged into the mining process by Bitcoin miners. In addition to that, they provide additional fees and enhanced hashrate. 

This mechanism has witnessed extensive adoption by facilitating fragmentation. Due to this, Furthermore, it eases the experimentation while keeping the base layer intact. Once that happens, Bitcoin passes on its features to other assets. All that happens without any modification in the BTC code. Developers will not require the Bitcoin blockchain to launch altcoins because they will be able to do it on Drivechain.

Understand the Workings of Drivechain

Drivechain deploys Simplified Payment Verification (SPV) to execute the transactions. Using a 2-way peg, it lets users send Bitcoin from one sidechain to another. Post this process, Bitcoin is locked in a special address on-chain. It stores the coins while acting as an on-chain vault. 

The sidechain analyzes the locking transactions and creates tokens. As a result of the process, the altcoins comply with the on-chain consensus rules. Some protocols have adopted this ecosystem in the past few years. zSide sidechain is one such example. It uses zero-knowledge proofs to keep transactions private and confidential. 

Use Cases of Drivechain 

  • Decentralized Finance– They empower DeFi programs to be expandable.
  • Non-Fungible Tokens– They bring more scalability into the working of NFTs.
  • Stablecoins– Stablecoins are safer and more reliable for its users.
  • Security Tokens– Security tokens get the much-needed tech upgrade with them. 

Drivechain has paved the way for so many possibilities. They expand Bitcoin and enable it to do much more. And thus, developers are already exploring it. Soon, they can become a prominent solution for many decentralized applications.


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