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BTC Relay The First Ethereum and Bitcoin Sidechain


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On May 2nd, the Brooklyn-based ConsenSys team announced the live release of BTC Relay the first production sidechain conjoining Ethereum together with Bitcoin. The sidechain uses Ethereum-based contracts to securely verify Bitcoin transaction enabling users to pay with BTC to use the ETH platform. The project is open source and is the first program to interoperate both cryptocurrencies together with decentralized smart contracts.

The BTC Relay Sidechain Conjoins The Best of Both Worlds

With the program, BTC Relay developers can now install a “Pay with Bitcoin” button to their constructed applications. The platform is fully decentralized and does not rely on a central authority or use any intermediaries. Additionally, BTC Relay has been added to the decentralized exchange EtherEx, and either coin can be swapped without the risk of a central point of failure. Furthermore, Relay could be used to distribute an “Ethereum-based ‘BTC’ token (ETHBTC) based on locking actual BTC tokens in a multisig on the Bitcoin protocol.” Joseph Chow, developer of BTC Relay stated in the announcement:

“BTC Relay is a building block, and I look forward to the infrastructure, applications, and innovations that BTC Relay helps enable on and off the Ethereum platform. The possibilities are exciting,”

BTC Relay implements what’s called SPV (simplified payment verification) to authenticate confirmed Bitcoin transactions. Relayers act like nodes and provide the service with a new Bitcoin block header generated by the network’s miners. The developers of the project say anyone can become a relayer and doing so doesn’t require extensive hardware or energy consumption. The platform was initially funded and designed by the Ethereum Foundation before Joseph Chow, and ConsenSys took the project over. BTC Relay was also funded and supported by a grant from Wanxiang Blockchain Labs. The inventor and co-founder of Ethereum is pleased with the launch of this latest sidechain and stated:

“I am excited to see BTC Relay provide the first-ever production release of cross-blockchain communication of this kind, and hope that it will set an example for interoperating cross-blockchain applications, whether Bitcoin and Ethereum, other blockchains and Ethereum and public and private or consortium chains, for many years to come.”

The launch of this platform is essential to the development of a broad range of DApps the team says, and they especially want to highlight the efforts put into the ongoing security audits. Joseph Lubin, founder and CEO of ConsenSys said the platform is a “powerful tool that enables Ethereum smart contracts to serve as SPV wallets for various other Ethereum-based networks or other blockchain-based systems (Bitcoin, Doge, etc.) in private permissioned, or open permissionless implementations.” He’s excited to see the capabilities of the project and how it will glue decentralized services together. The ConsenSys founder explains BTC Relay is a protocol that is very much aligned with the Brooklyn-based company’s vision. Lubin says:

“We envision a world of many purpose-built private enterprise and consortium blockchain systems, in addition to public blockchain networks, and BTC Relay and its extensions can enable them all to easily interoperate.”  

Source: Press Release

Header Image: Pixabay

Jamie Redman
Jamie Redman
Jamie Redman is a financial tech journalist from Florida thats been entrenched in the cryptocurrency community since 2011. He has a passion for Bitcoin, open source code, and decentralized applications. Redman has written hundreds of articles about the disruptive protocols emerging today.


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