Blockstream Sidechain-Issued Assets Could Make Altcoins Obsolete
Blockstream has revealed details of an asset trading upgrade to its Liquid sidechain, which could effectively provide an alternative to many altcoins.
Tokenize Anything With Sidechains
In an explainer July 2, Blockstream explained how its Issued Assets (IA) feature will allow users to create their own token asset on Liquid.
A sidechain for Bitcoin, Liquid already facilitates near-instant transfers, funds pegged to the Bitcoin blockchain.
With IA, those transactions can now be for practically anything.
“…Assets can represent existing financial instruments like tokenized fiat, crypto assets, attested assets (e.g. gold coins), or completely new assets,” Blockstream confirms.
IA saw its initial unveiling during May’s Consensus 2018 conference, during which paper wallets containing physical assets were distributed to attendees.
Once the physical asset – in this case Blockstream merchandise – was claimed, the associated digital asset was destroyed.
Next For Atomic Swaps
In real-world use, anonymous transactions and two-minute settlements on a Bitcoin-backed sidechain could provide genuine competition for altcoins seeking to offer such features as an ‘improvement’ over Bitcoin.
“These features allow for use cases like the creation of digitizable collectables, reward points, token sales, and fiat, all of which can be issued on Liquid,” Blockstream continues.
Mirroring progress currently underway on Bitcoin’s Lightning Network implementation, IA also provides Atomic Swap functionality, allowing trading of two different assets without the need for an intermediary:
Since Issued Assets and bitcoin can each be inputs and outputs of a Liquid transaction, a bitcoin/asset swap can be completed in a single transaction. Likewise, with Issued Assets that represent alternative cryptocurrencies on the network, you can create a single transaction in Liquid that contains different assets.
On social media, commentators likened the project to Factom, which creates a layer on top of the Bitcoin blockchain for secure data-recording.
A production version of IA will see a release in the coming weeks, with further updates promised thereafter.
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