In August, a core developer rewrote the proposal’s code and requested its addition to Bitcoin’s codebase, reigniting the debate over the merits of the change
The Bitcoin community is engaged in a debate over the addition of sidechains—secondary blockchains built on top of the Bitcoin network—proposed in a BIP six years ago.
Some believe that adding sidechains would bring new users and use cases to the Bitcoin network, while opponents warn that it could expose the network to new scams and vulnerabilities.
Meanwhile, one developer claims to have found a way to achieve the same goal without needing a soft fork of the Bitcoin blockchain.
The creator of BIP-300 and the founder of LayerTwo Labs, Paul Sztorc, who raised $3 million in December, has explained that the sidechains proposed in BIP-300 would allow Bitcoin to move onto these sidechains and be used to create new altcoins.
On August 22, Luke Dashjr, a Bitcoin core developer, announced that he had rewritten the proposal’s code and requested its addition to the Bitcoin codebase, reigniting the debate over BIP-300.
The BIP-300 proposal would also require a soft fork of the Bitcoin network. The Taproot soft fork is a successful example of this process and led to the launch of Ordinals and BRC-20 tokens.
In a September 10 post on X, Maxim Orlovsky, the CEO of Pandora, announced that he had been able to create a two-way peg on the Bitcoin network without the need for a soft fork.
According to Orlovsky, a previous project proposal could be an alternative to BIP-300. The proposal would use Oracle, a third-party service that provides data to the blockchain, to validate the sidechains. The oracle would report the state of the sidechain to the Bitcoin network, and the protocol would then reach a consensus on whether the form is accurate.
While Orlovsky’s proposal could offer an alternative to BIP-300, he is yet to provide much detail about how it would work. In his X post, he said that he would write a paper that explains the setup in a more detailed and accessible way.
Those who support BIP-300, including Sztorc, argue that Drivechains allows users to choose the level of security and consensus rules they prefer for their Bitcoin, giving them more freedom and control over their digital assets. Sztorc has also argued that there is no downside to the BIP-300 proposal, as it will allow for increased innovation.
Cory Klippsten, CEO of Swan Bitcoin, has argued that Drivechains will only increase the number of scams, potentially leading to more regulatory scrutiny and stricter regulations. Klippsten believes that this risk outweighs any potential benefits that BIP-300 might offer and that it could ultimately harm the reputation and value of Bitcoin.
Pierre Rochard, VP of research at Bitcoin mining company Riot Platforms, has criticized the BIP-300 proposal, arguing that its economic arguments rely on speculation rather than concrete engineering plans. He claims the proposal relies on wishful thinking rather than technical details and lacks a clear implementation plan.
On the other hand, supporters of BIP-300, like Dan Held, an educator in the Bitcoin space, claim that these new users and assets will be exposed to Bitcoin and its benefits, potentially leading to greater adoption and growth in the long term.
Jameson Lopp, co-founder of Bitcoin wallet provider Casa, asserts his view that sidechains do not threaten the main Bitcoin blockchain. He believes that if a sidechain demonstrates success and value, it may suggest integrating the features of the sidechain into the main Bitcoin blockchain.