Allbit opened BTC market for the first time in the decentralized exchange
Bitcoin and Etherium are the ancestors of the blockchain, but these coins cannot handle all transactions based on the blockchain. The reasons for this are slow transaction and lack of scalability. Decentralized exchanges (DEXs) that record all transaction data on blockchain must find a proper blockchain to cover their trading volume.
The solution proposed by Allbit was a proprietary sidechain linked to Ethereum. This was the ineluctable consequence because most of the decentralized exchanges are based on the Ethereum platform. However, there was a limit to being accustomed to the public as much as central exchanges. Most centralized exchanges are BTC market-oriented, so they are distinguished from decentralized exchanges where the ETH market is based. Allbit continuously tried to add the BTC, which boasts an absolute transaction volume and the key currency of the crypto world.
Thus, Allbit decided to build the Bitcoin sidechain as they introduce ASC (Allbit Sidechain) on the Allbit platform from January 15, which is now being serviced without errors. Alvin Lee said “The beginning of the Allbit exchange was based on the Ethereum sidechain, but we have been working the pegging technology for the Bitcoin mainnet. Finally, we succeeded in the Bitcoin pegging in six months, and we provide its service.”
He also emphasized that Allbit is the first exchange in the world to commercialize a Bitcoin sidechain. This is because BTC transactions are already on the sidechain of the Allbit platform. Alvin Lee referred “The ASC is a concept that BTC transaction faster than before. And we have created a stable service for fast trading using a Bitcoin blockchain.”
The sidechains of Allbit are different from other Bitcoin sidechains, such as RSK (RootStock). RSK is a sidechain project that platformed Bitcoin like Ethereum without a function as a blockchain platform. Alvin Lee said “Our BTC sidechain is similar to RSK in that we have built a sidechain by pegging Bitcoin, but RSK wants to do it as a platform service. The platform must become commercially available as attracting lots of DApp.” On the other hand, ASC is not the platform project, it is more convenient commercialization of existing Bitcoin networks. At last, the sidechain supports recording secure transactions between BTC and other cryptocurrencies.
In the case of RSK, it issues the RBTC in 1 : 1 ratio with BTC, but ASC does not have its own cryptocurrency. Alvin Lee affirmed “The ASC directly uses the BTC on the sidechain and which can be withdrawn as BTC. Furthermore, if they create a 1:1 interlocking currency like RBTC, they must prove that the issuing team holds BTC as much as the total issue amount of RBTC.”
It is also different from Liquid, another Bitcoin sidechain project. Liquid is a form of ‘federated sidechain’ that can only be accessed through an affiliate network. Alvin said, “it is hard to call it a formal sidechain because it does not have any communication with the Bitcoin mainnet.”
The ultimate goal of Allbit for this ASC release is an extension of Bitcoin usage. BTC can also be used as a future payment tool as it has overcome the technical disadvantages through a sidechain. Alvin said, “It is more efficient to increase the availability of BTC than to generate a new cryptocurrency similar to BTC. We are confident that BTC will contribute to the formation of an active asset market.”