Ive been involved with Avalanche a bit, so i vaguely understand designs that have validators who dont do mining. But how exactly is smartbch architected? Does it have a set number of validators, or is it flexible? Is Nakamoto style consensus used at all, or just classical? Is it reasonably decentralized? How cheap will the fees be compared to BCH mainnet? And can / should a person build on it as opposed to bch directly itself?
And maybe as like a part 2 to this question, would Avalanche consensus on a sidechain like this be theoretically beneficial to its design or to a similar design from your vantage point?
The whitepaper can be found here.
I was mainly interested in how BCH will be transferred over. This is the transfer part:
BCH can be transferred bidirectionally between Bitcoin Cash’s mainnet and Smart Bitcoin Cash, which means we can lock certain coins on the mainnet, and unlock the same amount of coins on Smart Bitcoin Cash, and vice versa. To bootstrap Smart Bitcoin Cash, we are inviting the major players in Bitcoin Cash’s ecosystem to run a federated two-way pegged gateway, which bridges the mainnet and Smart Bitcoin Cash to transfer BCH bidirectionally, just like how RSK and Liquid work. These players are not necessarily validators.
Nowadays the cryptocurrency communities have adapted to the “Same Symbol on Different Chains” scheme. For example, when mentioning USDT, it can refer a token on Bitcoin’s Omni, Bitcoin Cash’s SLP, Ethereum, Tron, etc. So we do not use another symbol to refer the BCH on Smart Bitcoin Cash, to avoid misunderstanding.
We are aware that Bitcoin Cash’s scripting language is capable of implementing a non-custodial trustless gateway by using a lock script to trace the voting process carried out inside coinbase transactions. However, this scheme has not been field-proven. We will write up dedicated proposals to describe this scheme and it will be implemented in CashScript upon passing. Afterwards, Smart Bitcoin Cash will switch to this new scheme in a hard fork.
Thanks for the answer. This is massively helpful. I hope to see the nonfederated version.
And what about transaction fees?
It’s under the same section: token & gas. TL;DR: gas is paid in BCH, of which half will be burned and half will go to validators. The consensus algo is tendermint, currently used on Cosmos blockchain.
Smart Bitcoin Cash will not introduce new tokens. Its native token is BCH, and its gas fees are paid in BCH.
At the end of a quorum‘s tenure, half of the collected gas fees will be rewarded to the validators and the other half will be burned. In this sense, BCH will become a deflationary currency. A validator must pledge enough collateral to get its gas fee reward, and the reward must undergo a lock period before it can be spent.
The buyback-and-burn mechanism is very common for exchange tokens (BNB, HT, FTT, OKB, etc) and DeFi governance tokens. And Filecoin has a similar mechanism to burn part of the gas fees, which will be followed by Ethereum in EIP-1559. This mechanism has proven effective, so we decided to use it.