Crypto Garage, a Japanese blockchain development company, has announced it will begin trials of its settlement system using Blockstream’s Liquid Sidechain. Cointelegraph reports the firm received regulatory permission to go ahead with the trial, but the big question is if this is a good thing for cryptocurrency.
Settlenet, which is the name of the new product from Crypto Garage, reportedly allows “exchanges to issue yen-pegged stablecoins and trade against Liquid Bitcoin (L-BTC), Blockstream’s sidechain.”
The trial will run for one year with some cryptocurrency exchanges joining Crypto Garage in the pilot. The development company claims to be the first blockchain finance project to receive approval under Japan’s regulatory sandbox scheme.
In a press release, Crypto Garage declared “This will enable rapid, secure and confidential transfer of the crypto assets while eradicating counterparty risk.”
Ultimately though, is this a good thing for users and miners?
As the trades are now made on a side-chain, the fees for the transaction are no longer on the Bitcoin Core (BTC) chain. As a result, miners who focus on BTC, and not L-BTC, will no longer receive fees for their work. As miners are incentivized to follow the fees, they may move over to L-BTC; however, that will open up BTC to attacks on its blockchain, putting the entire cryptocurrency at risk.
This is why Bitcoin SV (BSV), the only cryptocurrency to follow Satoshi’s whitepaper, is a much better proposition. It does not need to consider adding a sidechain to accommodate transactions because it is the only digital currency built to scale massively. That attribute allows it to take on all transactions, and also let miners focus their work on one blockchain.
BTC developers have gotten themselves tripped up with convoluted solutions to a problem that never existed. Satoshi’s whitepaper set out what Bitcoin was meant to be, and BSV has followed that vision. The ability to massively scale and meet the needs of business and adoption will save the mining industry by letting them bet on the stability of BSV.
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