For the last couple of years major part of my time is spend on cross chain projects. The first project where we tried to have version 0.19.2 of Steem talk to Bitcoin had to be dropped due to the crypto winter. Thats when the opportunity to work on the Peerplays (PBSA) cross chain project presented as an interesting opportunity.
Side Chains
The term sidechains are often used to denote a DLT implementation running in a private or public mode that feeds data to another chain. Examples can be even a database driven approach used by popular apps like https://splinterlands.com/. The sidechains may or may not have a consensus mechanism built in but will be linked with a "parent" chain for consensus and immutability.
Personally I am not a fan of private blockchains due to the complexity involved in setting up and maintaining them. A better approach will be to create a sidechain that communicates with a public blockchain. There are numerous cost effective ways to achieve this rather than setting up closed, private chains.
Sidechains can also denote two public chains where one chain is taking data from another public chain for specific purposes. For example there are Etherium based solutions which reads from Bitcoin.
Why do we need cross chain communication ?
(source : https://unsplash.com/photos/bj8U389A9N8 )
The Distributed Technology has given rise to numerous use cases and numerous implementations are focusing on particular scenarios. This has given rise to a situation where certain implementations have strong utilities wrt given problems. Examples are Bitcoin acts like a store of value, Etherium provides a robust distributed and decentralized computing environment making use of a Virtual Machine approach. Rather than re-inventing the wheel for different use cases its better to re-use the best tools and the same analogy can be applied to blockchains as well.
This where the idea of sidechains and cross chain aka inter-chain communication originates. Without the need for implementing core features to a private or public chain that a given dApp is using, integrating with existing chains for various functionalities like smart contracts provides us the results. A given dApp may be using a Graphene chain like Peerplays for video-game related dApp and the value transfer can be dealt with Bitcoin.
Whats the big deal about cross chain ?
Its fairly straight forward to have cross chain communication established and can be done with some scripts. Many tools exist which can do the same in a centralized manner. Such centralized systems depend on the mercy of the operator and I myself was at the mercy of one such operators when I was tricked to using a so called "decentralized exchange".
Having a cross chain communication mechanism which works in a decentralized, trustless and autonomous manner is quite challenging. The cross chain communication mechanism itself will need to have a consensus mechanism so that each of the given nodes can agree on the truth of the data. Only once we have such a voting mechanism implemented in an autonomous manner we can have a working inter ledger communication mechanism.
Extending the interledger communication system
The crux of the side chain communication system is a decentralized and trust-less communication mechanism that works in auto-pilot mode. Once we have such a system in place, this can be used for various use cases.
Blockchain Oracles aka means of sending discrete external data to the chain for various purposes is one complicated scenario still explored by many projects. The interledger communication system with aforementioned features can be used to send information to a given blockchain system. The data will have to be normalized and converted into a well formed format and presented to the chain. Cleaning up and acquiring the data in the first place is something that we must handle outside of the blockchain or distributed ledger realm.
Sidechain Operating Nodes - Peerplays (Graphene) : Bitcoin Crosschain Docker
Peerplays blockchain has implemented a robust mechanism to interact with Bitcoin. The project Sidechain Operating Nodes aka SON considers Bitcoin chain as a sidechain. The trustless and decentralized nodes listens for transactions on the Bitcoin network and interesting information is processed subject to a governance mechanism.
In addition to using the Peerplays blockchain for reaching consensus a gamified incentive mechanism also is implemented and facilitated by Peerplays. If interested, there are Docker images ready and you can find them here https://www.peerplays.tech/technology/sidechain-operator-nodes-sons/running-son-with-docker
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