Bitcoin Tech #4 - Wrapped Bitcoin & Sidechains with Shinobi & Nadav Kohen
Your browser doesn't support HTML5 audio
Bitcoin Tech #4 - Wrapped Bitcoin & Sidechains with Shinobi & Nadav Kohen - WBD342
Download Episode MP3 File
The file will open in a new window. Click down arrow to download the file.
Location: Remotely
Date: Tuesday 27th April
Company: Block Digest, Suredbits
Role: Host, Software Engineer
Since Bitcoin’s inception, scaling has been a divisive topic. The very first reply to Satoshi Nakamoto’s email introducing the bitcoin whitepaper stated that “We very, very much need such a system, but the way I understand your proposal, it does not seem to scale to the required size.”
The scaling debate came to a head in the block size wars. Part of the community wanted to scale bitcoin by increasing the block size. However, a larger section believed that scaling was better handled on other layers, culminating in 2017 with the BCash fork.
Four years on and the market has decided that layered scaling is the preferred solution. Today, there are several approaches to off-chain settlement, and by experimenting with these on higher layers separate from the protocol, the security of Bitcoin can remain robust.
These different second layers offer additional functionality and programmability not found on the Bitcoin base chain, but they do come with tradeoffs. Users should consider who or what they are trusting, be it a peg, a federation, a protocol, or a combination.
In this interview, I talk to Shinobi, the host of Block Digest and Suredbits software engineer Nadav Kohen. We discuss Bitcoin scaling, the Lightning Network, wrapped Bitcoin and Liquid.
00:05:23: Introductions
00:09:35: Layer 2 explained in detail
00:13:41: Super hard money defined
00:15:12: Bitcoin vs Ethereum
00:16:50: The history of scaling
00:22:18: Sidechains and how they work
00:25:05: Liquid Bitcoin
00:27:58: Liquid's Federation
00:31:42: Liquid's use case
00:35:46: Is Liquid a risk to the basechain?
00:38:53: Explaining a peg
00:39:48: Burning Bitcoin through an OP Return
00:42:59: Using miners in a multisig to two-way peg
00:48:54: Wrapped Bitcoin
00:55:15: Ethereum's risks outlined
01:01:13: ETH vs Bitcoin
01:06:25: Investment vs trade
01:09:18: The Lightning Network
01:11:31: Lightning Network payment channels
01:21:17: Transacting on the Lightning Network in simple terms
01:26:57: Channel fees
01:29:42: Different ways to close out a channel
01:33:59: Security of Lightning transactions
01:46:22: Lightning Network custodial services
01:53:11: Selection of preferred wallets
01:54:31: Final comments
SUPPORT THE SHOW
If you enjoy The What Bitcoin Did Podcast you can help support the show by doing the following:
Become a Patron and get access to shows early or help contribute
Make a tip:
Subscribe on iTunes | Spotify | Stitcher | SoundCloud | YouTube | TuneIn | RSS Feed
Leave a review on iTunes
Share the show and episodes with your friends and family
Subscribe to the newsletter on my website
Follow me on Twitter Personal | Twitter Podcast | Instagram | Medium | YouTube
If you are interested in sponsoring the show, you can read more about that here or please feel free to drop me an email to discuss options.
SPONSORS
Connect with Shinobi:
Connect with Nadav:
On Twitter
Mentioned in the interview:
Other relevant WBD podcasts: