Coins: A trustless sidechain protocol (Reddit Bitcoin)
I’ve been working on a sidechain protocol with no trusted third party. You can find the whitepaper here.
Abstract. Coins is a Bitcoin extension designed for payments at scale. We propose an efficient solution to the double-spending problem using a bitcoin-backed proof-of-stake. Validators vote on sidechain blocks with one-time signatures, forming a record that cannot be changed without destroying their collateral. Every user can become a validator by locking bitcoins. One-time signatures guarantee that validators loose their stake for publishing conflicting histories. Checkpoints can be additionally secured with a bitcoin-backed proof-of-burn. Assuming a rational majority of validators, the sidechain provides safety and liveness. The sidechain’s footprint within bitcoin’s blockchain is minimal. Spawning multiple, independent instances scales horizontally.
Feedback is highly appreciated!