The Bitcoin network’s proof-of-work consensus mechanism could become a useful means of securing a variety of proof-of-stake (PoS) smart contract blockchain protocols, thanks to efforts from a Stanford University professor.
David Tse and his research team are driving the use of the preeminent cryptocurrency to provide added security to PoS networks. Babylon blockchain, which Tse co-founded, aims to use Bitcoin (BTC) to bolster network security and incentivize BTC holders to participate in what is ostensibly a new approach allowing the staking of Bitcoin on proof-of-stake chains.
In an interview with Cointelegraph, Tse outlined how Babylon uses the Bitcoin scripting language to connect a PoS-based slashing mechanism to the Bitcoin network. This allows for the creation of smart contracts that can set specific spending conditions:
“Although the Bitcoin scripting language is limited in its ability to express complex spending conditions, we have used advanced cryptography to translate the slashing conditions of a PoS chain into a spendable transaction on the Bitcoin blockchain.”
Tse said that Babylon’s BTC staking protocol enables BTC to secure PoS chains without altering or forking the Bitcoin blockchain. This also allows BTC holders to earn rewards for contributing to the security of PoS networks by staking their BTC.
“Our method essentially transforms the slashing condition of a proof-of-stake chain into a spendable Bitcoin transaction. This way, the staked BTC does not need to be bridged to the PoS chain at all.”
The Stanford professor added that the simplicity of the approach also maximizes the security of blockchains by avoiding potential vulnerabilities associated with cross-chain bridges. As Cointelegraph extensively reported, cross-chain hacks and exploits have been rife, leading to over $2 billion in crypto being stolen in the past year.
Bitcoin remains unrivaled as the largest cryptocurrency by market capitalization and continues to operate on the original specifications set out by its pseudonymous creator Satoshi Nakamoto.
Nevertheless, the ecosystem has seen renewed interest and growth with the inception of Bitcoin Ordinals, which allow users to inscribe nonfungible tokens onto individual satoshis, the smallest denomination of a unit of BTC.
Similarly, Tse believes that protocols like Babylon expand the utility of Bitcoin beyond being a simple store of value or medium of exchange by sharing Bitcoin’s robust security with other chains and applications:
“We aim to scale Bitcoin’s security in a way similar to Ethereum’s scaling efforts, effectively sharing Bitcoin’s robust security with the rest of the decentralized world.”
The broader cryptocurrency ecosystem continues to develop novel approaches to blockchain consensus. Proof-of-stake chains have benefitted and are quickly adopting new approaches like zero-knowledge proofs (ZK-proofs). StarkWare co-founder Eli Ben-Sasson, who pioneered the technology, also believes that ZK-proofs could greatly benefit the proof-of-work-based Bitcoin blockchain.