RSK Labs is building Rootstock, a Bitcoin sidechain designed to support smart contracts. The platform runs contracts the way Ethereum does, but with a critical difference: it settles and moves value i
RSK Labs is building Rootstock, a Bitcoin sidechain designed to support smart contracts. The platform runs contracts the way Ethereum does, but with a critical difference: it settles and moves value in bitcoin itself.
The sidechain concept didn't originate at RSK Labs. Blockstream rolled out the initial ideas back in April 2014 when Adam Back and Austin Hill published their research. Rootstock takes that foundation and adds its own approach to a fundamental challenge: moving bitcoins between two separate blockchains.
Sergio Lerner, chief scientist at RSK Labs, laid out the different technical paths in a recent conversation with Epicenter Bitcoin. He mapped three core strategies.
"There are several ways to implement a two-way peg," Lerner said. "One is the sidechain concept that was developed by Blockstream, and the other is the drivechain concept that was developed by [Bloq Economist] Paul Sztorc. The third one is basically have a set of notaries that have custody of the funds that are transferred to the Rootstock platform."
Rootstock engineered a hybrid that pulls from all three approaches instead of selecting a single path. "On the Rootstock side, we have a sidechain; on the Bitcoin side, we have a mixture of federation and a drivechain, which allows miners and a set of renowned parties to have custody of the bitcoins that are transferred to the Rootstock platform," Lerner explained.
Control of the two-way peg will shift from a federation of high-profile Bitcoin companies to Bitcoin miners, who will merge-mine Rootstock, over time. The federation holds initial control. Lerner is also authoring a Bitcoin improvement proposal to add an opcode that enables drivechain functionality.
The architecture reflects what Lerner calls progressive decentralization. "No consensus system or blockchain can go from completely centralized control to fully decentralized control," Lerner explained. "There should be intermediate steps to go from one point to the other to get assurance that the network is performing as desired."
The federation will hold bitcoins sent to Rootstock through a multisignature address on the Bitcoin blockchain. They confirm activity on the Rootstock side via SPV proofs. This structure mirrors voting pools from the Open Transactions system. But Lerner stresses the project must move past the federation model to let miners take over the two-way peg.
Building trust in the early federation matters for security. Rootstock is recruiting the most prominent companies across the Bitcoin ecosystem to serve as notaries. These firms already manage exchanges and wallets, and they've built sophisticated security procedures for their own operations.
"We are choosing the [notaries] to be the most important companies in the Bitcoin ecosystem," Lerner stated.
The federation could still coordinate to steal the bitcoins on the Bitcoin side, but Lerner discounts this risk. "The federation have a reputation they protect; they are part of the Bitcoin industry," he argued. RSK Labs is working with some of the largest and most well-respected wallets and exchanges from each continent. These members already deployed advanced security standards and practices within their own businesses.
How does the federation prevent itself from stealing? A smart contract called the bridgemaster handles the details. "This federation has no authority or a way to make unauthorized use of the bitcoins that are transferred to the RSK platform," Lerner said. "In the RSK platform, there is a smart contract, which we call the bridgemaster, that orchestrates the creation of Bitcoin transactions, and the federation only has to take these transactions, sign them, and put them in the Bitcoin network. So they have no authority to create their own transactions [on the Rootstock blockchain]."
Rootstock runs on a private testnet today. RSK Labs plans to open that testnet to the public within a few months. The team published a technical paper going into depth on their two-way peg design.
