Drivechains could unleash major new applications on Bitcoin, but may also include vulnerabilities and added complexity.
the technicals of the peg-out mechanism are “controversial” and contain “many significant weaknesses.”Specifically, the proposal puts miners in charge of responsibly redeeming users’ peg-outs every three months. This gives miners the power to steal user funds if over 50% of the network’s hash rate conspires to do so, while also being very slow for users.
“In a way, Paul’s proposal embraces the reality that under any known peg-out system… Bitcoin miners could either censor data, fake data or cooperate with the administrator and steal the sidechain Bitcoin,” BitMEX wrote.Meanwhile, BIP301 would unlock “blind merged mining” for sidechains. Regular merged mining is when a minerfor two or more blockchains at the same time, leveraging the same hashing algorithm to score fees on both chains.
While most miners run some form of merged mining today, they must explicitly choose to run the sidechain’s software. Blind merged mining dispenses with this need by letting a third party run the sidechain, receive its fees, and later pass on those funds to miners as BTC transaction fees. While BitMEX said this proposal may introduce complexity to Bitcoin, the benefits it provides could outweigh that complexity.
“Increased usage of sidechains could potentially be positive for Bitcoin’s utility, and blind merged mining may be an improvement over regular merged mining,” analysts wrote.
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