An application still under development would allow the exchange of property rights over a quantity of bitcoins (BTC) almost instantaneously.
The concept suggests that BTC can change owners without having to send them in a transaction on the main Bitcoin chain ( mainnet , on-chain ).
The exchange ( swap ) would occur on a network side ( sidechain ) created for this specific purpose. This would allow two users to transfer control over the coins they own without leaving a record of this in the Bitcoin network , being a solution that also benefits privacy and discretion. of the participants.
The company Commerceblock is developing an application called Mercury Wallet, which works for this purpose on the statechains (state chains), a technology created by the developer Ruben Somsen in 2019 and which is integrated into the Lightning Network.
The statechains use the statecoins . Beyond being a term similar to “cryptocurrency” in the strict sense of the word, “ statecoin ” refers to the unit of account of transaction outputs. ( User Transaction Output , UTXO) that you want to manage on the network.
On the Mercury Wallet website we find a precise explanation of the statecoins :
A statecoin is a specific amount of BTC deposited at an address where your private key is divided between the depositor and the Mercury server. The depositor has a time-locked backup transaction ( time-locked ) that allows him to claim control over the coin after a specified time. The private key of the statecoin is not known by any of the participants, and both the owner and the entity of the statechain (Mercury), must cooperate to sign transactions.
To link exchanges of statecoins , Mercury would use a “Conductor”, technical term to refer to a command that conducts exchanges according to their compatibility in a group of several statecoins .
A Commerceblock blog post explains the concept of what Mercury could facilitate in the near future.
The driver has several exchange groups (swap pools) of different sizes and different denominations, to which users can join directly from the interface of the purse (wallet). Users can choose any of their statecoins and add them to any of the pools by simply indicating it in the graphical interface, and as soon as there is a number of statecoins that are equivalent to others in another group, the exchange will automatically run anonymously.
Because it is a public and open project, Mercury has its code in the GitHub repository. In this website you can read the definition about it.
Mercury is a client-server for statechains modified to be compatible with current Bitcoin network technology.
Ownership of Bitcoin UTXOs can be transferred between parties without transactions on the main chain ( on-chain ). This allows you to execute instant payments, increase privacy and innovation of the Lightning and DLC channels
Exchanges ( swaps ) They are a method to perform transfers off-chain (off-chain) in an atomic way. The number of participants in a swap is unlimited. If a number (n) of users participate in a swap , each one with its own UTXO, each one of them will receive back the right of ownership over any of UTXO that have the same value as the one they already have.
Statechains for Bitcoin privacy and scalability
As we reported in CriptoNoticias, the use of statechains has several benefits, such as privacy, efficiency, almost zero cost in commissions, as well as avoiding the use of the main network and therefore its congestion.
The solution also allows the scalability of the Lightning network, since the property rights over the channels created in this second layer of Bitcoin.
Regarding Considering the risks of using this type of exchange, developer Ruben Somsen explained in August last year that there are three risk factors, mainly in the statechains .
Somsen ensures that a server or client of statechain (such as Mercury), could disappear, be attacked or be actively malicious . Therefore, a possible solution could be to create a ‘federation’, where the server keys are controlled by several entities in a multi-signature scheme, so that there are guarantees in the trust model to carry out transactions with this federation.
However, despite being able to reinforce these three areas, Somsen ensures that the statechains are more secure than sidechains, due to how the user can get their coins back if the time lock contract ( timelock ) expires after a Federation downtime.
The possibilities of the statechains are quite wide, at least theoretically. Mercury is the client that seems to position itself publicly and commercially at the moment, and with the launch of their portfolio they hope that more users will use it and participate in the discussion to continue improving this technology.