In the years that followed the launch of Bitcoin, there were several projects that aimed to do a little better than it. Or at least, these projects saw the potential of Distributed Ledger Technologies (DLTs) and decided to one up it with extra features and more versatility.
Ethereum was the one that really took this idea and ran with it. It wanted a blockchain network to be more versatile. This came at the cost of security and it is frequently alluded by the developers themselves that this was an unavoidable tradeoff. That did not seem to impact the growth of Ethereum very much, though it has had a few bumps along the way.
But other projects have sought to bring smart contracts directly to the Bitcoin network and there are more than a few that are doing this. The idea is to marry Bitcoin’s security with the possibility of using smart contracts. In other words, these projects want to bring Turning-completeness to the Bitcoin network.
One of the most notable projects working on this problem is Rootstock (RSK), which states that it is the first active sidechain on the Bitcoin network that provides Turing-complete smart contracts.
Here, I’ll talk about Rootstock, the associated RIF token, the history of the project, its purpose, design, use cases, as well as partnerships and competing projects.
The History of Rootstock (RSK) and the RIF Token
Roostock (RSK) was launched in 2015 by Sergio Demian Lerner, Diego Gutierrez Zaldivar, Ruben Altman, Adrian Eidelman and Gabriel Kurman. As stated in the whitepaper, the Rootstock project is an evolution of a token called QixCoin, a Turing-complete cryptocurrency that was launched in 2013 by the same development team. According to the team, this token saw transaction performance of nearly 300 transactions per second, but with the same level of security that Bitcoin (BTC) offered.
However, the team wished to do more with the network, spurred by the motivation to make Bitcoin the de facto cryptocurrency by adding smart contract features. The purpose is described as follows,
We believe that new use cases are necessary in order for Bitcoin to become the leading global cryptocurrency, and that adding smart-contract capabilities is key to secure that future. With that in mind we created RSK, a smart-contract platform that incorporates a Turing Complete Virtual Machine to Bitcoin. It also provides other enhancement to the network such as faster transactions and better scalability, features that we also believe will enable new usage scenarios.
RSK itself states that it is an evolution of both QixCoin and Ethereum (ETH), borrowing aspects of account formats, VMs and web3 interfaces from the latter.
RSK spent the years between its launch and now to develop solutions and form use cases, and there are many for both, which I describe below.
The RIF token relates to the Rootstock Infrastructure Framework. This largely has to do with decentralized applications (DApps). Accompanying this is the Root Infrastructure Framework Open Standard (RIFOS). Together, they have been described as aiming to “bridge the gap that exists today between Blockchain technologies and its mass-market adoption.”
The RIF token itself was only launched in January 2019, spending the early months at around $0.20, and now sitting at $0.08. The company raised about $150 million from selling these tokens.
RSK has spent the first half of 2019 working the “Wasabi 1.0” release, which brought such features and improvements as transaction tracing, meta transactions, and storage and federation security improvements. The RSK roadmap provides more details on development.
It’s clear that RSK is working on a lot to bring a solid and reliable smart contract sidechain to the Bitcoin network. But how do they plan to materialize this into use case? And is attempting to do more?
It turns out that they do. They are working on some interesting storage solutions and interoperability, a marketplace, DApps and several technical developments, which I describe below.
The Purpose of RSK and RIF
Yes, RSK is primarily understood to be an open source smart contract platform, a Bitcoin sidechain that that offers smart contract functionality. It incentivizes Bitcoin miners to work with its network via merged mining. This gives the miners extra rewards for the same amount of work. Additionally, Ethereum smart contracts will also be made compatible with the RSK blockchain, meaning that the former’s smart contracts will be able to be launched on the latter’s blockchain.
There are actually two tokens involved in the RSK ecosystem: RBTC and RIF. RBTC is called a “Smart Bitcoin” and is used to pay for the execution of transactions on the network. There are a few ways to obtain RBTC. First, by sending Bitcoin through the network’s 2 way peg, or by using the Testnet faucet. A 2 way peg simply means that BTC and RBTC tokens can be transferred to each other’s blockchains.
The RIF token is perhaps more important in the context of everyday use. The RSK Infrastructure Framework Open Standard (RIF OS), which I mentioned earlier, is like an Operating System upon which software can run. The RIF OS is a set of protocols that “enable faster, easier and scalable development of distributed applications (dApps) within a unified environment.’ In other words, this will be the home of DApps. The OS will also allow for interoperability with different crypto economies.
The RIF token will be used to access and pay for services on the RIF OS, and this will be directed towards the developers who are building the actual products and services. Eventually, this will grow to include DApps, storage and communication services and third party developed infrastructure services.
The current focus of RSK development is to build on the network’s services layer, to the end of attracting developers and creating high quality applications. The team states that the technology stack is particularly suitable for the development of finance related DApps because of the network’s ability to handle resource intensive computation and provide high transaction throughput.
Use cases that have already been established include financial, insurance, gaming and legal applications, as mentioned in a HedgeWeek interview with Chief Executive Officer (CEO) Diego Gutierrez. Specific applications that have been built or are currently being built are InsurTech, Money On Chain, Crypto SpaceShift and Signatura.
Other highlighted use cases are BitGive, Circle of Angels, SeSocio, 88i, dexFreight and many others. The industries these use cases span include charity, finance, legal, supply chain and logistics, gaming, governance, digital identity management and many more. It is worth taking a look at the use cases and applications mentioned on the website.
While the team has already achieved many milestones in their many years of development, the upcoming years, in which the RIF OS is fully released and an ecosystem is fully formed, will be the most interesting ones for the project yet.
Partnerships and Efforts
RSK does not have many partnerships per se, but it is quite focused on expanding its ecosystem, including attracting developers and encouraging the building of DApps.
For example, RSK’s Ecosystem Fund is an incubator that sees the investment in startups with viable models or marketplaces, and is described as “a thesis driven fund that sees the potential to build entirely new classes of services on top of the secured Bitcoin network.”
Here the team funds startups that can add value to the RSK network and infrastructure and/or offer services and products to the RIF marketplace. The fund is primarily for seed stage startups, and funding be in the range of $50,000 to $250,000.
Similarly, the RSK Innovation Studio is a joint venture by Monday Capital and RSK. The goal of the Innovation Studio is to create development tools with “great UX’ to make it easier for “for developers to explore and start building their ideas.” Ideas currently under development include banking solutions, customer payment products, virtual reality games, marketplaces, and digital identity management related solutions.
RSK has also formed a federation of over 30 service providers that will support the network’s transactional activity.
Conclusion
What the RSK team is doing is quite interesting and there is no doubt that there is a need for it. There are some other projects working on bringing smart contracts to to Bitcoin, but none of these are really “competing” as they all favour interoperability and are simply trying to enhance the existing Bitcoin network.
On the other hand, there is the fact that the RIF token which the team has released, and the protocols upon which DApps will be built, and the marketplace in which services will be offered, are all similar to what many other projects are doing. But there is no point in speculating on how it will fare with these goals. In the short and medium term, what matters is what RSK is most distinctly known for - in terms of mass adoption and general usage, how far will its smart contract features on the Bitcoin network go?
Time will tell, but certainly RSK and its ecosystem is well worth keeping an eye on, as the team has some solid experience and milestone achievements behind it.
