Blockstream Launches Liquid NetworkTop 10 Binary

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Blockstream Launches Liquid Network

Blockstream recently announced that is expanding into new territories with the launch of the Liquid Network. This is a bitcoin sidechain that is intended to add additional functionality and make it possible for transactions to be done faster. It would also help with increased security and tokenization of various assets.

Sidechains work by creating a second data layer for the Bitcoin blockchain. It copies the latest version of the ledger and keeps it on a separate network. The transactions that happen on the sidechain do not need to be included in the main blockchain. The result is that there are no transactions fees and the blockchain is not filled up with the records.

One great feature that the Liquid Network has is that it has a two-way peg. This means that data can be transferred between two networks seamlessly. This allows for easy resolutions of various transactions.

Blockstream

This is all because Liquid uses a native asset called Liquid Bitcoin. This is what allows for seamless data transfer between the sidechain and the main blockchain. Plus, it can be redeemed at any time on the network.

In a statement, Blockstream said

The participating exchanges and Bitcoin businesses deploy the software and hardware that make up the Liquid network so that they can peg in and out of the Bitcoin blockchain and offer Liquid’s features to their traders. Liquid provides a more secure and efficient system for exchange-side bitcoin to move across the network

Exchanges would be the main beneficiaries of the new easy transfers. Mining groups are left out, but they would still be able to benefit if Liquid Bitcoin is traded in for actual bitcoin. The main drawback is that the sidechain is not as decentralized as the main blockchain network. To function as it does, it requires a network of trusted functionaries. However, Blockstream assures users though that no single entity would be able to control the entire network.

Lightning Versus Liquid

Though the Liquid Network is in some ways similar to the proposed Lightning Network, the Liquid Network has some key differences. The main one is that Lightning is meant for microtransactions. Small payments done on Lightning would be free of charge and have minimal risks.

Whereas the Liquid network is intended for larger institutions and exchanges. It would allow for large transactions to be cleared faster and not incur massive fees. All of these transactions would need to be done using Liquid Bitcoin though.

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The launch of Liquid has been a long time coming. It was first announced in 2020 and received $55 million funding in 2020. The release of the network was originally projected for the first quarter of 2020.

Blockstream Launches Liquid NetworkTop 10 Binary

We are excited to announce that the Liquid Network is now live. As the world’s first production Bitcoin sidechain, the Liquid Network provides fast, secure, and confidential transactions to address the needs of exchanges, brokers, market makers, and financial institutions around the world.

The Liquid blockchain went live with the first block generated on September 27, 2020 at 1:29 UTC. 23 of the cryptocurrency industry’s biggest players participated in the launch as Liquid members, including Altonomy, Atlantic Financial, Bitbank, Bitfinex, Bitmax, BitMEX, Bitso, BTCBOX, BTSE, Buull Exchange, DGroup, Coinone, Crypto Garage, GOPAX (operated by Streami), Korbit, L2B Global, OKCoin, The Rock Trading, SIX Digital Exchange, Unocoin, Xapo, XBTO, and Zaif. Together, these members comprise the Liquid Network, ensuring users’ assets are protected through a geographically diverse network with no single point of failure.

Liquid is an innovative sidechain built on the Bitcoin network, facilitating faster bitcoin transactions between businesses and individuals, while enabling extended functionality. Some of the features of Liquid include:

  • Liquid’s native Liquid Bitcoin (L-BTC) asset is backed by a two-way peg to Bitcoin (BTC) and can be redeemed at any time, providing institutions and end users with a secure and rapid way to transfer bitcoin between members with full settlement in two minutes.
  • Liquid’s Issued Assets brings bitcoin-like features to traditional assets, such as tokenized fiat, digital reward points, and attested assets (e.g. gold coins), removing the need for dedicated blockchains or wallet software.
  • Blockstream’s Confidential Transaction technology ensures that the amount and asset type transferred are known only to the transacting parties, enhancing the privacy of both L-BTC and Issued Asset transactions.

Users will connect to the Liquid Network through GreenAddress and an upcoming Liquid Wallet.

The success of the launch is the result of coordinated efforts of the Liquid Network’s members and represents just the beginning, with numerous features and applications in the works to expand participation. These features include GreenAddress wallet integration, an all-new open-source Liquid Wallet client, and plans for third-party hardware wallet support from Ledger and Trezor.

In addition to the enhancements to Bitcoin’s functionality, the launch of the Liquid Network marks the beginning of a new era of digital asset issuance and transacting by enabling the tokenization of fiat, gold, securities, and even other new crypto assets – all with Bitcoin at the center.

If you would like to learn more about the Liquid Network and how it works, please visit here or read the FAQ page.

Blockstream Launches Atomic Swaps on Liquid Bitcoin Sidechain

Alyssa Hertig

Blockstream Launches Atomic Swaps on Liquid Bitcoin Sidechain

Blockstream has created an “experimental” tool that makes it easier for users to trade “trustlessly” between tokens launched on its Liquid sidechain.

Dubbed Liquid Swap Tool, the platform uses “atomic swaps,” a cryptographic technology that already serves as backbone for newer decentralized exchanges currently in development.

The motivation for these types of transactions is that today most exchanges are middlemen trusted by users to exchange cryptocurrency on their behalf. Many have lost funds or suffered hacks over the years, leading technologists to argue they really can’t be trusted with this money. Atomic swaps offer an alternative.

As mentioned above, this atomic swap tool is specifically geared for tokens launched on Liquid, a sidechain that’s pegged to bitcoin. To use it, users must send their tokens to the sidechain, effectively trading their bitcoin for “L-BTC.” It’s kind of like alchemy: morphing bitcoin into an altered type of bitcoin, which is faster and has more privacy features, but requires more trust in the intermediaries that run the sidechain.

Recently, Blockstream launched a tool for launching security tokens on top of the so-called “sidechain,” which is pegged to the bitcoin network.

With the new Liquid Swap Tool, users will be able to trade one of these tokens for another without requiring an intermediary to do the exchange.

Though, it’s worth noting the instructions for the tool are pretty technical for now. Users need to download Liquid, fiddle with a configuration file, download the separate swapping tool and perform the instructions in the code repository to get it going.

Not to mention, the repository describes the tool as “early days,” arguing it “should be considered experimental,” going on to outline a way to make such a trade more private.

“It is recommended to use the tool with someone that you can trust to keep such data private. Users are also encouraged to encrypt/sign messages sent with their trading partners in order to mitigate against man-in-the-middle attacks,” the description continues.

Buttons image via Shutterstock

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