ChainX will Accomplish the Commercialization of BTC Payment
After nearly a decade, a consensus has temporarily been reached in terms of the usage of Bitcoin — — it’s qualified as an asset.
Regarding it as an asset hardly incurs any opposition nowadays given to the atitudes held towards BTC by state agencies, financial institutions and players both inside and outside the BTC community. Being an asset entitles certain characteristics. The most obvious one is the potential of appreciation through investment and storage. However, according to the Bitcoin’s white paper, BTC is for peer-to-peer payment system. So why Bitcoin, which was created to facilitate payment, is yet widely applied to payment?
Before answering this question, let’s look at gold first.
Bitcoin is called digital gold. Gold is a value asset suitable for investment and storage, but not for circulation due to its property of bulkiness and heaviness. In the past, people used early bank notes instead of gold, similar to the bank cards that we use today to replace cash, which equalizes the extension of gold circulation. When it comes to Bitcoin, people have also made many attempts to expand the application, like Layer-1 expansion, status channels, and off-chain expansion, trying to solve the problem of high fees and congestion. Representative projects include BCH, Lightning Network, and RSK which are trying to solve these through different perspectives. But ChainX is better in terms of its implementation and actual performance.
First, let’s look at the on-chain expansion
Take representative project BCH for example. This is done by expanding block capacity, but a lot of pressure will be put on the storage and traffic. We can compare BTC to a bank where due to lack of staff only a few transactions can be processed in one second with thousands of transactions waiting to be processed every day. All transactions need to be processed on the counter, with many people trading, so they have to wait in queues. On-chain expansion is like increasing the number of staff and counters. However, due to limited space of the bank, increasing counters will inevitably cause space congestion which is also the foreseeable limitation that is going to be faced by on-chain expansion.
Second, let’s talk about the off-chain expansion
Which means the process of some transactions is not recorded onto the chain and only the results are recorded. Let’s continue using the bank example: ATMs are introduced to deal with retail banking businesses, and the workload of counters is reduced, so the efficiency is improved.
Lightning Network uses an approach called status channel that moves the peer-to-peer transaction process offline. Its technical model could be illustrated by money transfers among different people. Let’s assume A and B are husband and wife. They withdraw some BTCs from the BTC Bank and put them on their checking accounts(money pool) with which they pay for food, milk powder and other things, meanwhile their wages, bonuses, and rewards are also put into this account. Transactions are not considered valid until both parties sign it. This is the concept of multi-signing when more people get involved. When they are married to each other, everything goes as usual. But if one day they decide to divorce, they have to settle the account in the bank with both parties validating the process by signing.
A and B have this 1-to-1 status channel. What if there is another person A, B and C? Then the status channel will be peer-to-peer. Creating a new channel for every new transaction is too time-consuming, so the channel should be shared. If A wants to transfer money to C, but there is no direct channel. However, A and B, B and C have direct channels. Then A can transfer the money to B first, then B transfers it to C. When the number of people involved increases, let’s assume A initiates a transaction to E, F, G, etc., channels intermediating the process can charge a fee. The off-chain expansion of the Lightning Network via status channels improves the trading speed of the BTC to 10 seconds. In fact, ChainX can be faster.
RSK has not yet implemented, so we have to wait before analyzing it.
So how does ChainX achieve that?
ChainX is based on Layer-2 BTC network. BTC can be mapped onto the ChainX public chain as X-BTC by the light node technology. X-BTC can be transferred freely in ChainX system and it uses its own consensus mechanism to keep records. Let us take banks as example. Assume people go to banks for cash-related services. But ChainX is the first bank that issues the UnionPay card, and the cash is transformed as numbers in the card, which allows money to be transferred among different banks. This has changed the payment methods and improved the efficiency for shopping malls, governments and citizens. Now it has penetrated into every aspect of life.
ChainX is like an issuer of UnionPay cards for the digital currency. ChainX aspires to realize the “inter-bank transfer” of BTC which will lay a solid foundation for future commercialization.
How fast is ChainX now? BTC’s transfer speed is improved to 2S, and the service fee is lowered to a few cents. Commercialization is just around the corner.
Independent and neutral currencies are always urgently needed. That’s why Bitcoin’s surge is unstoppable. Unlike other digital currencies, Bitcoin corresponds to gold, while other digital currencies silver and copper. Gold and other metals are essentially different. Commercialization of BTC is the common aim of every believer. ChainX strives to turn this into reality and improves BTC’s application in payment.
With further expansion of the consensus, the demand for BTC commercialization will be sweeping. ChainX is ready.
About Chain X
- Official website: https://chainx.org
- Wiki: https://github.com/chainx-org/ChainX/wiki
- Twitter: https://twitter.com/chainx_org
- Medium: https://medium.com
- Telegram: https://t.me/chainx_org
- White paper: https://chainx-static.oss-cn-hangzhou.aliyuncs.com/chainx_en.pdf
- Desktop wallet: https://github.com/chainx-org/chainx-wallet/releases/tag/v1.0.3
- Official Wechat: interchain