Bitcoin could soon have Ethereum-like smart contracts
A blockchain startup has released a beta update for bitcoin that would add smart contract features
Argentinian blockchain startup RSK today released its first beta for a bitcoin smart contracts platform.
Bitcoin has been facing somewhat of a drop in the last month, falling more than 25% in the past few weeks from its high of US$20,000. Part of this is due to casual buyers selling out before Christmas, but it has also coincided with the rise of altcoins.
These altcoins offer more behind the technology than just acting as essentially a digital version of gold.
One of the biggest features that the likes of Ethereum possess is smart contracts. Smart contracts are essentially automated contracts that act as a computer-based middleman to store and enforce contracts. These contracts could be anything from selling a house to paying money you owe a friend.
Smart contracts are one of the biggest features of blockchain-based technologies that backers of the technology are excited about.
What does this mean for bitcoin?
Introducing a smart contract platform to bitcoin will help the world's most valuable cryptocurrency fight against the rising altcoins.
The function will allow more complex self-executing code to be run alongside bitcoin's blockchain.
RSK's smart contract feature can't be added directly onto bitcoin's blockchain, but will be added to a sidechain. This will move tokens from the main bitcoin blockchain to the smart contract network. On this sidechain, blocks will be issued roughly every 10 seconds – much faster than the 10 minutes it normally takes on bitcoin.
The beta opens up the ability for developers to move bitcoin onto the sidechain and test its features. Currently, as the sidechain isn't public yet, the testnet relies on a group of companies known as a "federation" to control the transfer of money. When it goes live properly, this will be controlled in a decentralised way similar to bitcoin.
If this implementation of smart contracts is successful, it could shake up the cryptocurrency world. A success would likely mean that several altcoins that are basically bitcoin clones with smart contract features would become redundant, while potentially pushing bitcoin's price right up again.