Diego Zaldivar’s AMA Session
On this post, we get the answers from Diego Zaldivar’s AMA.
How exactly does the 2-way peg work for RBTC? Is it a Smart Contract? Do exchanges deal with this in real time? Can end-users also interact with this smart-contract directly, without having to go through an exchange? If so: how? If not: why not?
I will answer this on a high level but for those willing to get into the guts of the beast our legendary Chief Scientist, Sergio Lerner put together this thorough article on Sidechains in general and RSK 2 way peg in particular:https://blog.rsk.co/noticia/sidechains-drivechains-and-rsk-2-way-peg-design/.
RSK native currency, smartBitcoin (RBTC), is tethered to bitcoin 1 to 1 so the only way to create RBTC is by sending BTC to a multisig address in the Bitcoin blockchain that is controlled by the RSK Federation (I’ll expand on this later). The bitcoins that arrive to that address get locked, and a proof of that transfer (SPV proof) is fed to a special smart contract on the RSK blockchain called the Bridge contract. Currently, the RSK Federation is doing this process of communicating new transfers to the Bridge contract but this process is fully decentralized and anyone can feed this information to the contract. Once the bridge contract gets this proof it sends the equivalent amount of RBTC to what was received in BTC to an RSK address that corresponds to the BTC address that started the process on the Bitcoin blockchain. With that, the crossing from Bitcoin to RSK is finished in a fully decentralized / trust minimized way.
Lets see what happens when we want to go back to Bitcoin. To redeem RBTC for BTC first you have to send the RBTC to a special address of the Bridge on the RSK Blockchain but since Bitcoin cannot verify transactions on a secondary blockchain because its scripting capabilities are limited on purpose to reduce its surface of attack, we need the RSK Federation to assist in the signing of the release transaction on the Bitcoin side. So as the RSK Federation nodes acknowledge and validate that a new BTC release transaction was created, they sign it. The interesting thing is that RSK Federation nodes run using an HSM (Hardware Security Module) developed by our security team so RSK Federation members don’t have access to the private keys and therefore cannot runaway with the funds. The worst they can do is to unplug the HSM and stall the peg. When the release transactions are fed to the HSM, it validates the validity and then signs them. When enough signatures are collected (remember that the BTC address is a multisig address so it needs M of N signatures to release the funds) then the BTCs are sent to the sibling BTC address of the RSK address that initiated the exchange.
Although the damage that the RSK Federation can do on the peg is mostly stalling it, our Research team has been working on an extension of the Bitcoin protocol called Drivechain that would enable the release of funds using the Bitcoin mining network. If that proposal goes through into the Bitcoin code, that would create a fully trust minimized 2way peg.
The whole process of exchanging BTCs for RBTC take around 15 hours (100 Bitcoin blocks) to avoid losing funds due to a reorganization of either blockchain. Anybody can use the peg although until later this year (2019) in order to exchange BTC for RBTC you need to be whitelisted (the other way from RBTC to BTC has no restrictions).
Due to technical nature of using the peg, the friction created by the waiting period and the white listing process, many exchanges offer RBTC so developers and users can easily access it. Atomic swap systems between BTC and RBTC using dual Lightning and RIF Lumino nodes are in the works so soon users will be able to exchange their BTC for RBTC without intermediaries.
Hopefully, I gave some clarity on the topic but if you think something is missing or unclear please let me know and I’ll improve the answer.
What exactly is the value proposition of RIF? Is it a matter of utility, and if so, what exactly is that utility? If token was useful for selling coins that couldn’t be sold with RBTC alone.
This question has two sides as RIF is both a set of protocol standards and a token. RIF OS (Rootstock Infrastructure Framework Open Standard) is a suite of open decentralized infrastructure protocols that relay on blockchain based smart contracts to enable faster, easier and scalable development of distributed applications (dApps).
The initial protocols include RIF Directory (a naming service protocol), RIF Payments (an offchain payment protocol), RIF Data (a data storage and streaming protocol), RIF Communications (a secure routing, session and encrypted communications protocol) and RIF Gateways (an interoperability protocol that includes cross chain transfers and oracling services). The standards also define interfaces that can be implemented as APIs and libraries that abstract and simplify the use of decentralized infrastructure (both blockchain and P2P) for any developer even if they don’t know inner workings or low level functioning of decentralized protocols.
This suite of protocols aim to solve the major problems that stop decentralized blockchain networks (ie: Bitcoin, RSK, Ethereum, etc.) from reaching mass adoption. From our point of view, the two main impediments are sustainable scaling (onchain scaling is possible but leads to higher maintenance cost for validation nodes and therefore to centralization) and developer usability (it can take several months for developers to learn how to use the technology and even mastering the tech, it’s very inefficient to build decentralized apps for the lack of a higher level protocol and reusable components).
Following the guidelines of RIF OS, a series of blockchain based P2P platforms are being built being RNS, an implementation of RIF Directory on RSK, the first to be launched. RIF Lumino, the first implementation of RIF Payments, is soon to be launched as well and during 2019, the first version of full stack will be available.
Now let’s talk about the utility of the RIF token within the RIF OS ecosystem.
The first and obvious use is to access all the services provided in the RIF OS ecosystem. To comply with the RIF OS protocol standard service, providers have to at least accept RIF tokens in exchange for their services. On top of that, certain protocols use RIF token as the collateral that all service providers need to stake in order to offer services on the RIF Marketplace. This is key given the decentralized nature of these platforms, without an embed insurance mechanism would be impossible to ensure quality of service to the end users. Additionally, on some protocols the ratio between the collateral and the amount of contracts a service provider has will be used to dynamically distribute new service contracts among registered providers.
We also envision that in the not so distant future, other uses of the RIF token will arise surrounding the RIF marketplace. Two of the most relevant ones are the use of RIF token as collateral for the issuance of counterparty risk-free stable assets (ie: $RIFUSD, $RIFARS, etc) which can be used to denominate service prices in stable assets and the use of RIF token to settle transactions between RIF Payment Hubs without assets in common or sufficient liquidity.
We envision RIF OS in the long term, as a unified Marketplace for off-chain infrastructure services that can be consumed by every major Smart Contract enabled crypto-economy so although the RIF Token was initially created on the RSK Network, in the future it will be portable to other platforms like Ethereum or EOS. This will create economies of scale and strengthen the antifragility of the Decentralized Ecosystem as a whole, bringing our vision of the Internet of Value one step closer to realization.
How the Austrian School of Economics has influenced you on your career?
When I first got in touch with Bitcoin in 2011 I had very limited knowledge about macroeconomics aside from the personal experiences my family and myself had as the consequence of living most of our lives in Argentina. This experiences include hyperinflation, bail-ins, asset confiscation and capital controls among the most relevant ones. The curious thing is that even passing through those harshful situations I never took the time to reflect on how the national and world financial system worked. That changed in 2012 when a close friend of mine sent me a substantial amount of bitcoins from Silicon Valley to Buenos Aires bypassing the capital controls of our country. After that I spent two weeks almost not sleeping reading about Bitcoin and mostly about macroeconomics and the austrian school of economics. Since then my view of the world completely changed and I realized that returning the sovereignty of money to the individuals was key to create a world of equal opportunities.
What is RSK/RIF doing help solve the Megalodon RIF Scam?
Let me be very clear: RIF Labs was not involved in any scam. Any issue involving Contributors and third parties (if any) should be resolved between such Contributors and those third parties. Please note that almost 95% of all Contributors have successfully redeemed their tokens and this figure keeps growing. We cannot comment on particular cases due to confidentiality and data protection issues.
That being said, without naming any particular entity or individual, we are aware that one Contributor was not able to redeem their tokens due to an issue on their side. We are working actively with such Contributor to solve the problem. Further, we are sensitive to third parties allegedly involved in the situation and are confident that in the coming weeks we might be able to solve the alleged problem by presenting a solution that should address the concerns of all involved. I cannot comment any further at this stage, but rest assured that I will do so as soon as I can.
Lightning Network is now being used more and more. How does RSK compete with it?
First, Lightning would be more comparable to RIF Lumino Payments on top of RSK than to RSK itself. Having clarified that, we don’t see Lightning as a competitor but as a complement. With dual Lightning / Lumino nodes, people will be able to do atomic swaps of bitcoins for smartBitcoins greatly simplifying the use of the RSK Network. On the other hand, Lightning is bitcoin only at the moment while RIF Lumino Payments will enable offchain payments for any token living on the RSK Network. Imagine the potential of having instant payments of stable assets tethered to fiat currency fully integrated with Bitcoin and costing a fraction of a cent. That can create the perfect playground for FinTechs all over the world and will enable competition on the financial system in a whole new level.
What are the advantages of RIF? Why do people use RIF? Are there real use cases?
RIF’s value proposition is a suite of open and decentralized infrastructure protocols that enable faster, easier and scalable development of distributed applications (dApps) within a unified environment.
RIF OS is an all in one, easy to use, blockchain infrastructure service framework. It provides developers and organizations with access to a variety of services across multiple crypto-economies. From payments to storage, multiple services, one token.
RIF OS protocols enable broad interoperability and faster time-to-deployment, and aims to bridge the gap between blockchain technologies and their mass-market adoption. RIF OS Protocols complete the RSK Smart Contract Network vision of bringing the Internet of Value to life. Today, there are blockchain services solutions for specific needs (like storage) but there is not one platform that provides and end to end solution to blockchain infrastructure services. RIF OS goal is to solve that problem and become one platform that provides all the services needed to develop blockhain apps. RIF OS was launched on November 18th 2018, so there are no use cases yet although there are many in the works.
What measures is RIF taking to ensure that other projects are willing to adopt?
We recently underwent a reorganization and we now have an Adoption group that is the one setting up the go-to-market strategy on how to best accomplish it in the different audiences, developers, integrators, end users whether organizations, corporations, governments etc. We also opened a regional team in Asia that as part of its objectives will have adoption and are looking at opening hubs in other parts of the world to ensure we execute the go to market strategy that the Adoption team is working on.
Any progress with Drivechain proposal(s)?
The first drivechain proposal was created by us in 2016 and presented to the Bitcoin mailing list for evaluation (see https://github.com/rsksmart/bips/blob/master/BIP-R10.md). Those were turbulent times for the Bitcoin community, as the different subgroups were fighting either to increase the block size or to adding SegWit. In that context, it was very difficult to achieve consensus about sidechain integration. Later in 2018, we renewed our efforts with an improved proposal (see https://github.com/rsksmart/bips/blob/master/BIP-R11.md) presented at Building on Bitcoin 2018 (https://www.youtube.com/watch?time_continue=10289&v=Cpid31c6HZc). We think that the ecosystem has to mature for trust-minimized Bitcoin sidechains to flourish. While we wait until the right moment comes, we keep working at full speed to increase the security and openness of our federated peg.
Is it realistic to hope that RSK will move away from federation mode in mid-term future?
The RSK platform has been launched with a Federation of well-known and respected community members (blockchain companies with high security standards). Each member is identified by a public key. The conditions to become a Federation member have been established, including security policies, backup procedures and legal requirements.
Currently the Federation only role is to secure the two-way-peg. In the future, they may provide additional services to the network. Some of the services that have shown to be valuable to the community are:
- Two-way peg with Bitcoin
- Two-way pegs with other cryptocurrencies
- Oracling services
- Checkpointing services
Bitcoin does not support smart contracts nor native opcodes to validate external SPV proofs. Part of the 2-Way Peg system in RSK requires trust on a set of notaries. In RSK, the notaries that protect the locked funds are the members of the Federation. The Federation members are respected community actors, such as important blockchain companies, and they also have the technical ability to maintain a secure network node. A requirement for being part of the Federation, is the ability to audit the proper behaviour of the software that powers the node, specially regarding the correctness of the component that decides on releasing BTC funds. For all of these reasons, we are not planning to move away from the Federation.
How does RSK/RIF recruiting process work?
We post our open positions right now at rifos.org website and also on LinkedIn. We review the candidates that apply, we make a selection of the ones that have a background aligned with the position, and we contact them to set up one or more interviews.
Do you plan to run an incubator/accelerator? If so, what is the investment thesis and roadmap?
Yes. Actually, this is one of the initiatives we are working on and will be announced when everything is set in place.
Can I register a domain in RNS and then sell it in a secondary market ?
Anyone that registers a domain in RNS can sell the domain directly or using a third party secondary market. IOVLabs is not currently involved in the development of such market but it may be a good idea for developers around the globe to come up with a decentralized and easy to use market for RNS domains.
When can we expect Integration with LTC ?
We created the RSK-LTC working group, with members of the RSK and Litecoin community, to evaluate the possibility of proposing a bridge between the two platforms. However, there is no finalized community proposal or reference code for integrating a Litecoin bridge in RSK at this moment.
What’s RSK objective in this world?
Bitcoin started a revolution that set the foundation of a new Internet for the transfer of value.
RSK built upon Bitcoin capabilities, enabling smart contract execution. And RIF OS takes the vision even further by making decentralized technologies accessible to traditional developers, organizations and innovators in order for them to create the applications needed for a prosperous and inclusive society.
Financial inclusion is something that touches our hearts deeply and motivates us every day, in part because all of us come from corners of the world where we have experienced first-hand the challenges that successive economic crises and inefficient and incompetent governments present to the less-favoured. This picture is shared across most emerging economies around the world, where only a small fraction of the population has access to proper financial services, and consequently, the opportunity for improvement is massive and global.
RIF Labs operates as a purpose driven organization focused on promoting and developing the next generation of open blockchain-based infrastructures that will enable worldwide financial inclusion and bridge the gap between this nascent technology and mass adoption. We believe that Bitcoin and its distributed Blockchain technology have the potential to be the foundation of a new decentralized and programmable network of networks for the store and transfer of value. An Internet of Value that could possibly change the lives of a billion people over the next decade.
Can you talk about how RSK is approaching node diversity? How many nodes does a healthy protocol need?
The question has never been about the number of nodes but more about the origin of those nodes. A few hundred RSK nodes is enough to serve a global cryptocurrency network at this stage, but we must not feel confident by that metric. Our objective is that full nodes are run by a diverse set of individuals, organizations and companies. That is the true meaning of decentralization: don’t trust, verify yourself. To make progress in that direction, we’ve developed the first proof of replication scheme for rewarding full nodes right from a smart contract (see Sergio Lerner’s Devcon 2017 3 presentation here: https://www.youtube.com/watch?v=pioxtzPxQMg), which will soon be integrated to the reference implementation. Also, we’ve put great effort to reduce the resource consumption of full nodes, such as the Unitrie proposal (see https://blog.rsk.co/noticia/towards-higher-onchain-scalability-with-the-unitrie/) so that individuals can run nodes in standard laptops. Finally, we proposed a new technique for light clients (see https://github.com/rsksmart/RSKIPs/blob/master/IPs/RSKIP45.md), to onboard those users running nodes in mobile phones. Summarizing, we’re making sure that the network remains healthy and decentralized in the future, both in node quantity and quality.
When does the team or the federation decided to issue more BTC?
The Federation has no means of “issuing more BTC”. Transferring BTC to the RSK platform is an open process. In the beginning of RSK, we set some limits on the number of Bitcoins that can be transferred to RSK until the network leaved the Beta Stage and almost all restrictions will be lifted as soon as we reach about 51% of Bitcoin hashrate on merge-mining.
Who is leading the marketing?
Gloria Vailati is our marketing director that joined the company a few months ago. She has over 20 years of experience in marketing in top technology companies such as Apple, Hewlett Packard amongst others. She is building her team, recently hired a Social Media and Content Manager and she is recruiting an Asia Marketing Manager and will incorporate other members as needed to achieve the goals. Marketing is strategic for the company and an area where we need to step up the efforts. We believe Gloria and her team will be able to take RSK and RIF brands to the level where they need to be.
How has the funds been allocated post ICO?
First of all let me clarify that RIF didn´t held and ICO but a Private Token Sale.. We choose to conduct the RIF token sale in a way we felt would minimize distraction, speculation and would also protect the long term sustainability of our organization and therefore of the vision. The funds are used to grow the organization needed in order to deliver our vision. We are currently at 50 employees and expect to double in the next year which includes opening offices in different regions of the world. Also we are and we will be investing money in marketing for brand positioning.
Not a question, but I love that Metronome will be the first cross chain currency ever to be also deployed on RSK
Thanks for your input. We will certainly look into Metronome and reach out to explore joint opportunities.
Is RIF really necessary for the construction of RSK? Despite investing I am now convinced that RIF’s main utility is just a money grab! Forcing RIF as a payment token for services on RSK is overcomplicating when BTC (RBTC) is the native token. The argument that RIF is used to avoid spending BTC is weak, as one of RSK’s strengths is precisely BTC powered-SC. Why issue RIF tokens? Why not use RBTC uniformly?
Root Infrastructure Framework Open Standard (RIF OS) is a suite of open and decentralized infrastructure protocols that enable faster, easier and scalable development of distributed applications (dApps) within a unified environment. RIF OS includes support for decentralized, third-party, off-chain payment networks; a set of APIs for seamless and secure communications between decentralized applications; and easy-to-use interfaces for developers. Access and payment for RIF OS services are based on the RIF Token, which allows developers to access the suite of services built on top of RIF protocols such as Directory, Payments, Data Feeds, Storage and Communications including third party-developed infrastructure services, and any other apps that might be deployed on RIF’s framework that agrees to accept RIF Tokens as a means of accessing / consuming the service or app. RBTC is the native token of the RSK Live Mainnet and is pegged 1:1 to BTC. It’s used as gas to pay for Smart Contract execution in the same way as ETH is used as gas for Ethereum. Technical users can obtain in a decentralized way by converting to and from BTC by using the bridge between the Bitcoin and RSK protocols. Less technical users can obtain RBTC from supporting exchanges like Huobi and Bitfinex among others in order to use the RSK and all of the applications that run on RSK (including RIFOS once it launches).
While the RSK Live Mainnet requires, -and will always do-, Smart Contract execution to be paid in smartBitcoins (RBTC) maintaining full incentive alignment with the Bitcoin Ecosystem, RIF OS Protocols aim to create and off-chain layer of infrastructure that initially is built on top of the RSK Ecosystem but will be integrated in the future with other Smart Contract enabled platforms like Ethereum & EOS. In order to do so, it’s important to have a token that is neutral to any of those networks and for which price is defined in connection with the offer and demand of infrastructure services regardless of the particular price of the native cryptocurrency of the network (RBTC, ETH, EOS, etc). From a user’s perspective, it doesn’t pose any additional friction as we expect that in the near future DEXs (Decentralized Exchanges) will provide instant conversion between the native currencies of the Networks where RIF OS Protocols are integrated and RIF Token. The portability of the RIF Token will create economies of scale and strengthen the antifragility of the Decentralized Ecosystem as a whole bringing the Internet of Value one step closer to realization. The main reason is that we envision RIF OS, in the long term, as a unified Marketplace for off-chain infrastructure services that can be consumed by every Smart Contract enabled crypto-economy (i.e. RSK, Ethereum, EOS). In that context, having a portable / neutral token is a must.