Rootstock launches test network Bitcoin welcomes smart contracts

Recently, the Rootstock Bitcoin private test network based on smart contracts has started running. With this milestone step forward, RSK Labs co-founder Sergio Demian Lerner suddenly appeared at the Bushwick office of ConsenSys, so we took the opportunity to ask him a few questions about the amazing technology he and his team have developed.
What is Rootstock’s worldview regarding finance and the internet?
We believe that smart contract platforms based on public blockchains will play an important role in the next wave of disruptive innovation.
Technologies such as Bitcoin or Rootstock will accelerate the development of the Internet and democratize financial services and distributed services.
Today, the fastest-growing 50% of the population does not have a bank account or savings in the traditional financial system, which is one of the most important reasons for uneven income growth around the world.
With the development of smart contracts on permissionless blockchains, we believe that in the future the use of smartphones and the Internet will continue to increase in the poorest parts of the planet, which will help establish a more democratic way to access financial services around the world and enable the global economy to develop rapidly.
What kind of market timing does Rootstock provide?

Rootstock has been looking to stimulate key stakeholders in the cryptocurrency ecosystem.
Rootstock offers Bitcoin miners (the world’s most important, proven, globally secure mining network) the opportunity to participate in the smart contract revolution, providing them with a new source of income beyond their current hardware and electricity consumption.
Rootstock uses Bitcoin as a fuel to run Rootstock smart contracts, benefiting the Bitcoin ecosystem.
Ultimately, Rootstock provides Ethereum projects and developers with another fully compatible way to run their solutions and benefit from the security of Bitcoin’s secure web.
Regarding Rootstock’s real-world use cases and services, some of our current partners are serving our test network, which includes micro-loan solutions, asset tokenization, decentralized voting, and some other financial applications. The test network provides new innovative solutions for different markets around the world.

Can you explain exactly what Rootstock is?
Rootstock is an open source smart contract platform that is compatible with the Ethereum Dapp interface and uses Bitcoin as its native cryptocurrency. Rootstock smart contracts can run countless applications such as micropayment channels, escrow services, crowdfunding, asset encryption creation, decentralized remittances, IP protection, asset registries, voting systems, micro-loans, supply chain tracking, online reputation management, digital identity, game currency, market predictions, and fair competition.
To create a smart contract platform, Rootstock uses a Turing complete deterministic replicating virtual machine and is compatible with the EVM. Rootstock also provides an improved payment experience with near-instant confirmations, currently capable of 300 tps and ensuring that most payments are completed within 20 seconds. Bitcoin miners use merged mining to provide security for Rootstock. To interact with Bitcoin, Rootstock uses a Bitcoin two-way peg, which transfers Bitcoins to and from Rootstock at a fixed conversion rate. The Rootstock two-way peg is a hybrid drivechain and sidechain technology. All SPV nodes running smart contracts make the sidechain function. Rootstock is also backwards compatible with Ethereum, so DApps released on Ethereum can easily be used on Rootstock, achieving Bitcoin-level security, faster execution and stronger interaction with Bitcoin. Founded in 2015 and funded by major shareholders in the Bitcoin ecosystem and FInTech industry, RSK Labs Ltd. is developing the Rootsock platform and will launch it in Q3 2016.

What are the components of the Rootstoc platform?
The main components of the Rootstock platform are the Core (full node), the two-way peg subsystem, the FedNode, and the merged mining subsystem. Similar to Ethereum, the Core provides connectivity to the network, blockchain consensus, and virtual machine execution. The two-way peg subsystem includes the Bridge smart contract, which provides Bitcoin blockchain services to the Rootstock contract and manages the two-way peg. The FedNode is a second full node that connects to the Bitcoin blockchain and the Rootstock blockchain, pushing transactions and block information back and forth, communicating with the Bridge contract to arrange the signature of Bitcoin transactions and release Bitcoin when sending information back to the Bitcoin blockchain. Finally, the merged mining subsystem consists of: Proof of Work mining based on SHA256, and some plugins for different mining pool management applications.

How does Rootstock compare to Ethereum?
Rootstock shares the account/contract core design with Ethereum. This measure is inevitable due to our compatibility requirements. Rootstock's full node is based on the Ethereum codebase, the Bitcoin codebase, and our personal code. Once Ethereum applications are ported to Rootstock, it is difficult for Ethereum developers to find any abnormalities in these programs. However, in fact, the progress we have made in the fields of technology and science has made the programs more scalable, stronger, less latency, higher security, and more flexible. The first version release aims to achieve 100% compatibility with Ethereum. Future releases will focus on strengthening privacy, enhancing scalability, and reducing resource consumption on nodes.

How are Rootstock and Ethereum similar? How are they different?
Our technology has evolved independently over time in Ethereum, so we have been able to make some progress in some areas. For scalability, we have implemented a more direct approach for the first time, replacing Ethereum's long-term partitioning plan. Instead of forcing users to move their contracts to a specific isolated data partition, the Rootstock platform enables smart contracts to dynamically update specific addresses exclusively. So full nodes can parallelize transaction verification by splitting up the transaction set. This is a way to improve CPU resource consumption and make scalability easier with many data processing cores per Rootstock node. Regarding latency, Rootstock uses the DECOR+GHOST protocol to reduce the block interval to an average of 10 seconds, which is lower than the current average block interval of 16 seconds in Ethereum. DECOR+ increases the security of the blockchain compared to the famous uncle mining or single-person mining strategy that Ethereum/Babbitt prevents. Finally, the low-level network protocol is somewhat optimistic in minimizing latency and generating outdated blocks.
Rootstock’s plans include greater security: In terms of cryptography, users will be able to customize their own signature schemes. This not only increases algorithmic flexibility, but also makes it easier for the Rootstock platform to be decoupled from signature schemes that may not be secure enough in their implementation. In terms of operational consistency, we leverage Bitcoin miners to provide security for the blockchain using merged mining and proof of work, and we believe that once implemented, there will be more miners. Interestingly, Ethereum is interested in proof of stake, but the security of Casplatin has not yet been proven in theory and practice.
For flexibility, we are using a new toolchain that uses mainstream programming languages ​​to write smart contracts using existing and well-tested development environments. A new VM program associated with this retargets EVM opcodes to become a new native Rootstock virtual machine based on more convenient and faster bytecode.
For performance, our updated VM will support JIT writing. So the running cost of smart contracts will be cheaper than Ethereum.
Again, there are some differences in the protocol governance and crowdfunding model, we are not creating a new form of speculation, and we use Bitcoin, so Rootstock's revenue model is simply payment per use, rather than an icon asset file.

Why are these models different? How do they identify market timing from your perspective?
Rootstock seeks to combine a public blockchain (which offers censorship resistance, openness, zero-bloat guarantees) with another blockchain that meets the needs of institutional use cases (banking regulation, clearer settlement finality, scalability, and privacy). For example, a multi-signature consortium provides checkpoints, and nodes are configured by default to temporarily suspend operations in the event of disagreement.

We believe that Bitcoin has a stronger network effect and that a strong Bitcoin network is best for the entire ecosystem, including other openly competing cryptocurrencies, which gives rise to multiple options such as two-way pegs and merged mining.

What is the route this year?
Full nodes, merged mining and two-way pegs are already running, and we are currently working on improving the core. If you want to test your applications before the platform is released, there is an invitation-only test network. At this stage, enterprises can apply to participate. The first public test network will be released in September, and at that time, the source code will be open source. The platform is scheduled to be released in December.