Rust Bitcoin Sidechain⚡

This project implements a Bitcoin-anchored sidechain written in Rust, leveraging Bitcoin's Proof-of-Work (PoW) consensus mechanism through merge mining. The sidechain is fully anchored to Bitcoin Core, but without a two-way peg for asset transfer. Instead, it inherits the security of Bitcoin through periodic anchoring and merge mining.

Idea inspired by RSK and redesing by Rsync

Developed by 22388o

Overview

This sidechain is designed to:

• Use Bitcoin's PoW consensus: No separate consensus mechanism is implemented. The sidechain inherits Bitcoin's consensus via merge mining.
• Be anchored to Bitcoin: Sidechain blocks are periodically anchored in Bitcoin by including sidechain block headers in Bitcoin transactions.
• Merge-mining compatibility: Bitcoin miners can mine blocks on both Bitcoin and the sidechain simultaneously without needing to allocate additional resources.

Features

• Merge Mining (Auxiliary Proof-of-Work): The sidechain allows miners to mine Bitcoin and the sidechain simultaneously by reusing Bitcoin's PoW.
• Bitcoin-anchored security: Sidechain blocks are periodically anchored in Bitcoin blocks for additional security and tamper-proofing.
• Rust implementation: The sidechain is built using Rust, leveraging the rust-bitcoin crate for interaction with the Bitcoin protocol.
• No asset peg: The sidechain is non-peg, meaning there is no two-way transfer of assets between Bitcoin and the sidechain.
• No soft fork: The sidechain works without need soft forks and is compatible with them when happen some soft fork in the future

Components

1. Sidechain Block Structure: The sidechain block is similar to a Bitcoin block but contains a reference to a Bitcoin block hash via the merge mining (AuxPoW) mechanism.
2. AuxPoW (Auxiliary Proof-of-Work): This mechanism allows the sidechain to share Bitcoin's PoW. Miners submit a valid Bitcoin block and a sidechain block together.
3. Anchoring Mechanism: Periodically, sidechain block headers are committed to the Bitcoin blockchain using an OP_RETURN transaction, which acts as a checkpoint.

Architecture

• Bitcoin Core Integration: The sidechain communicates with Bitcoin Core via the JSON-RPC API to retrieve Bitcoin block headers and submit anchor transactions.
• Merge Mining: Miners mine both Bitcoin and sidechain blocks using a single PoW computation.
• Validation: Sidechain nodes validate blocks based on Bitcoin’s PoW and ensure that the sidechain block is correctly linked to a valid Bitcoin block.

How It Works

1. Mining: Bitcoin miners participate in mining both Bitcoin and sidechain blocks. The sidechain block contains the hash of a Bitcoin block, and the same PoW solution is used for both.
2. Anchoring: Periodically, the sidechain state is anchored in Bitcoin by committing block headers using an OP_RETURN transaction.
3. Consensus: The sidechain leverages Bitcoin’s consensus by reusing Bitcoin’s PoW via the AuxPoW mechanism. No new consensus mechanism is required.

Setup and Installation

Prerequisites

• Rust: Ensure Rust is installed on your machine. You can install Rust here.
• Bitcoin Core: Install and run Bitcoin Core (preferably in regtest mode for development).

Steps to Run the Sidechain

1. Clone the repository:

   git clone https://github.com/AreaLayer/demo-sidechain.git
   cd sidechain

2. Install dependencies: The project uses the rust-bitcoin crate. Ensure you have the necessary Rust dependencies installed:

   cargo build

3. Run Bitcoin Core in Regtest mode:

   bitcoind -regtest -daemon

4. Start the sidechain: Run the sidechain node:

   cargo run --release

5. Start merge-mining: Set up your miner to perform merge mining on both Bitcoin and the sidechain.

Interacting with the Sidechain

• Check sidechain blocks: The sidechain node validates new blocks mined via merge mining.
• Submit anchors: Anchor sidechain blocks periodically in Bitcoin using the OP_RETURN mechanism.

Development

Modifying the Code

• The sidechain block structure and the AuxPoW (merge mining) mechanism are located in the src/block.rs and src/main.rs files, respectively.
• The anchoring mechanism is implemented in src/main.rs, which includes the logic for committing sidechain headers to Bitcoin.

Testing

To test the sidechain in regtest mode:

• Use Bitcoin Core in regtest mode for quick block generation.
• Simulate mining on both the Bitcoin main chain and the sidechain.
• Verify that the sidechain blocks are anchored correctly in Bitcoin blocks.

Contributing

Contributions are welcome! Please feel free to submit a pull request or open an issue for any bugs or feature requests.

License

This project is licensed under the MIT License - see the LICENSE file for details.

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Acknowledgments

• Bitcoin Core: This project heavily relies on Bitcoin Core for anchoring and security.
• rust-bitcoin: The Rust library for Bitcoin protocol support.

Futures development

• Compatible with BitVM
• Others Opcodes (OP_CHECKSIG, OP_CLTV , OP_CSV, OP_IF / OP_ELSE, OP_CHECKTEMPLATEVERIFY)
• Timelock with Lightning Network
• Scriptless
• Taproot