Peercoin Foundation is on the Verge of Cracking Off-Chain Smart Contracts
San Francisco, CA, United States, April 2nd, 2024, Chainwire
Ever since the popularization of smart contracts, the industry standard is for contracts to be hosted and executed by the blockchain itself. However, the Peercoin Foundation announced in a recent blog article that it has been experimenting with a secure and decentralized way of moving the execution of smart contracts off the blockchain. Doing this would provide massive benefits like increased privacy, lower fees and improved scalability.
With this new off-chain technology, the Peercoin Flutter app will be able to handle various decentralized applications, including prediction markets, financial contracts like binary options, futures, as well as any other type of contract where the outcome can be determined based on data provided by an oracle, such as sports betting, election results, and more.
Peercoin’s second layer is imagined as a collection of independent dApps with the app logic being executed off-chain. Final balances are then settled on Peercoin’s mainnet. To summarize, by moving the execution of smart contracts off-chain, the following favorable traits are achieved:
- Increased Privacy; to the outside world, the entire contract seems like a regular transaction with no identifying information.
- Lower Fees; due to drastically reduced size and cheap signature validation.
- Improved Scalability; as most computationally intensive work is done off the chain and only settled on the main chain.
The ability to operate financial contracts with a minimal on-chain footprint while also ensuring contract integrity and confidentiality is a pivotal development in the quest for a more accessible and efficient blockchain ecosystem.
The blog article suggests that this project has been ongoing for over a year now, and this week marks the first successful test of threshold signature support on Peercoin’s testnet, one of the technologies necessary to make the system work.
How Does it Work?
The plan is to use the following combination of technologies:
- Threshold Signatures; are an economically viable method of reaching consensus within groups, of potentially hundreds of participants, while being fully off-chain, completely private and infinitely scalable.
- Discreet Log Contracts (DLCs); are a novel idea on how to do contracts without relying on scripting or virtual machines. All the important details of the contract and its execution are kept secret from everyone except the parties involved, and the blockchain is not used for anything other than starting and finishing the contract.
- Oracles; process real-world external events and deliver information about them in a way that can be used by DLCs. External events can be anything from a football game’s results to the value of a stock, so that data can be fed into a contract.
Distributed Oracles (Oracle Swarms)
Traditionally, the main issue with DLCs has been reliance on centralized oracles, which increases the risks and decreases the trust in such systems. However, by combining the above technologies, the problem is solved by introducing the concept of distributed oracles (also called an oracle swarm).
A swarm tackles the problem, as the oracle is no longer a single party that must be trusted, but an entire network of potentially hundreds of participants with internal consensus and governance. If enough participants of the swarm agree on the outcome of an event, they can construct and publish the information that proves they, as a collective, agree on that outcome. This is peer to peer consensus in its true sense.
Ease of Use with Mobile Integration
Technologies like threshold signatures, distributed oracles and off-chain contracts won’t really become meaningful unless they’re easy for everyone to use on the go in their daily lives. This means hiding all the complicated tech stuff under the hood and presenting it in a simple and clear interface to users.
Knowing this, the plan is to integrate all these technologies into the Peercoin Flutter Mobile Wallet. The mobile wallet is being developed to allow its users the ability to create and interact with discreet log contracts (DLCs) and form oracle swarms.
About Peercoin Foundation
The Peercoin Foundation is a non-profit organization established in 2018 with the simple mission of promoting and supporting the continued education, development, and overall progression of the Peercoin project. The Foundation seeks to empower the Peercoin community by providing the tools necessary to perpetuate Peercoin’s long-standing reputation. The Peercoin blockchain network and the Peercoin project in general is an open-source decentralized ledger, with no governing body. The Peercoin Foundation makes no claims over intellectual property related to the Peercoin project, unless explicitly stated otherwise.
The Foundation is funded solely by community donations.
Official Links:
Website – https://www.peercoin.net/
Foundation – https://www.peercoin.net/foundation
Twitter – https://twitter.com/PeercoinPPC
Blog – https://www.peercoin.net/blog/
Forum – https://talk.peercoin.net/
Telegram – https://telegram.me/peercoin
Discord – https://discord.gg/m294ReV
Contact Information:
Email: foundation@peercoin.net
Disclaimer: The information contained in this press release is for information purposes only and does not constitute investment advice or a solicitation to purchase or invest. The price of Peercoin can be extremely volatile and can fluctuate rapidly in response to market conditions. Before making any investment decisions, you should carefully consider your investment objectives, level of experience, and tolerance for risk.
